Lack of Regulations & Security Benefits for Gigs: Study

General Studies Paper -3

Context: A study conducted by the People’s Association in Grassroots Action and Movements recently highlighted the plight of more than 10,000 Indian cab drivers, gig and platform workers.

Major Highlights of the Study

• Long working hours:Almost a third of app-based cab drivers work for over 14 hours a day, while more than 83% work more than 10 hours and 60% work over 12 hours.
• Reflects caste equations:It noted that social disparities make the situation worse, with over 60% of the drivers from Scheduled Castes and Tribes working for over 14 hours a day, while only 16% from the unreserved category work such long hours.
• Low pay:The study report says that over 43% of participants in the study earn less than ₹500 a day or ₹15,000 a month, after deducting all their costs.
  • The study found that 34% of app-based delivery persons earn less than ₹10,000 a month, while 78% of them are spending over 10 hours each day at work.
• Demographic trends:Out of 5302 cab drivers and 5028 delivery persons across eight cities participated in a 50-question survey, 78% of the respondents were in the age group of 21 to 40 years.
• Risky business:Due to the demanding work hours, the study found that drivers are physically exhausted, and exposed to an increased risk of road traffic accidents, especially due to the ‘10-minute delivery at the doorstep’ policy of certain e-commerce platforms.
  • The report said that 86% of delivery persons found such policies “completely unacceptable”.The lack of social and job security creates additional stress and leads to potential health issues.
• Expenses exceed earnings:While 72% of the cab drivers said that they face difficulty in managing expenses, 76% of the delivery persons are struggling to make their ends meet.
  • 68% of cab drivers’ responses even show that their overall expenses exceed their earnings, which indicate how a vast number of app-based workers could be in debt-like situations.
• Huge deductions: 35% of the respondents reported the companies are deducting between 31-40% of commission rate per ride, while the officially claimed figure by the companies themselves is 20%.
• Customer misbehavior:Customer behaviour affects a significant majority (72%) of drivers in a negative way, while 68% of delivery persons are reportedly affected by it negatively,” the report said.
• Inability to take leaves:It added that 41% of the drivers said they are unable to take even a single day off in a week; 48% of delivery persons too reported their inability to take a weekly off.
• Issue of ID deactivation:A glaring 83% of the drivers reported that the issue of ID blocking affects them negatively, 47% stated that this issue extremely affects them. In the case of delivery persons, this percentage is even higher at 87%.

Gig Economy

• The gig economy is about individual workers carrying out tasks for clients through the intermediation of a platform attributing those tasks and taking care of the transfer of payment on atask-by-task basis.
• Gig workers: NITI Aayog defines ‘gig workers’ as those engaged in work outside of the traditional employer-employee arrangement.

• • NITI Aayog’s report titled ‘India’s Booming Gig and Platform Economy’ defines a gig worker as 

• “someone who engages in income-earning activities outside of a traditional employer-employee relationship, as well as in the informal sector”.
• Additionally, it defines those working with platforms such as Ola, Uber, Dunzo, Swiggy, Zomato and Urban Company as platform workers.

Significance

• The gig economy is based on temporary, or freelance jobs, often involving connecting with clients or customers through an online platform.
• The gig economy can benefit workers, businesses, and consumers by making work more adaptable to theneeds of the moment and the demand for flexible lifestyles.
• Time flexibility:Workers operating in the gig economy are allowed to work any of the hours they desire.
• Income flexibility:It is an increasingly attractive market due to the sheer flexibility that allows individuals to earn extra income.
• Size of the sector: As per the report, 47 percent of gig work currently is in medium-skilled jobs, 22 percent in high-skilled, and about 31 percent in low-skilled jobs.
  • Drivers and sales persons accounted for more than 52 percent of the gig workers in 2019-20.
  • When workers are classified by industries, the report said that 26.6 lakh gig workers were involved in retail trade and sales in FY20, and about 13 lakh were in the transportation sector.
  • Roughly 6.2 lakh persons were in manufacturing and another 6.3 lakh in the finance and insurance activities.

Suggestions/Recommendations

• Social security measures:Authors of the study recommended stronger social security for app-based workers.
  • Social security measures are required like paid sick leave, health access and insurance, retirement/pension plans and other contingency benefits.
• Oversight mechanism:They called on the government to exercise oversight on the fairness of algorithms and mechanisms used by platforms to monitor such workers.
• Skilling: It is recommended that skill gaps be bridged by carrying out assessments periodically and partnering with platform businesses for onboarding skilled women and persons with disabilities.
  • It is also suggested to make aggregate data public to enable decision-making.
• Women in the gig economy: Companies should carry out gender sensitization and accessibility awareness programmes for workers and their families, particularly to promote the rights of women and persons with disabilities.

Way Ahead

• The gig economy is a growing trend,with many people attracted to the flexibility and freedom it offers. But an adequate regulatory mechanism in place is the need of hour.
• The gig economy is here to stay, and for many, it offers a desirable work style with flexibility and autonomy. But it also comes with challenges like income insecurity and lack of benefits, which needs to be dealt with collectively by the government, private sector and civil society.