Font size:
Print
Dynamics of the Gig Economy
Context: Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill, 2024 does not adequately address employment relationships in gig work, which is crucial for applying crucial labour protections.
Issues With The Bill:
- The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023, and the Karnataka bill both follow a welfare board model.
- The Welfare Board model provides some social security schemes but does not replace institutional benefits (provident fund/gratuity).
- It uses the term “aggregator” instead of “employer“, skirting the issue of defining employment relations in gig work.
- The bill does not guarantee minimum wages or regulate working hours for gig workers.
- It only requires weekly payments without specifying a minimum amount.
Gig Economy and Workers:
- Gig economy uses digital platforms to connect freelancers with customers for short-term services or asset-sharing, such as ride-hailing, food delivery.
- It involves income-generating activities outside traditional, long-term employer-employee arrangements.
- A Gig Worker is a person who performs short-term jobs, often in the service industry, as an independent contractor or freelancer.
Rise of Gig Work and Associated Issues:
- Gig and platform work has seen significant growth, especially in the app-cab and retail delivery sectors.
- Projections by NITI Aayog indicate the gig workforce will expand to 23.5 million by 2030.
- This means that by 2029-30, gig workers will make up 4.1% of India’s total workforce, compared to 1.5% in the 2021-22 fiscal year.
- Projections suggest the gig economy could contribute 1.25% to India’s GDP and create 90 million non-farm jobs in the long run.
- Gig workers have been protesting over revenue sharing, working hours, and other employment terms.
- Gig economy is largely unregulated, offering workers little job security and few benefits, similar to India’s long standing informal labour sector.
- Formal sector workers are highly skilled as companies invest in their training, while gig workers need to upgrade their skills independently at their own expense.
- There are more potential gig workers than available jobs, leading to a demand-supply mismatch that depresses wages over time.
Way Forward:
- The United Kingdom Supreme Court ruled that Uber is an employer, and the existing labour laws of the UK apply to Uber drivers.
- In India, gig and platform workers are included in the Code on Social Security 2020 as informal self-employed workers.
- However, no mention of such workers has been made in the other three new labour codes, namely:
- Code on Wages, Industrial Relations Code and Occupational Safety, Health and Working Conditions Code
- Provide accident, health and death insurance for gig workers, similar to models in the UK and Indonesia.
- NITI Aayog’s report “India’s Booming Gig and Platform Economy” recommended providing social security measures for gig workers and their families.
