Will The Life Of A Gig Worker In India Change For The Better?

Reforms such as these are expected to yield good results – increasing labour productivity, creating more jobs, and improving wage rates. However, studies showcased that following most labour law reforms there has been an increase in the number of contractual labourers, a fall in the number of directly employed labourers, and a fall in wage rates. Much in the same way, the RGW may fall short of addressing what it is actually intended for.

Looking through the prism of humane labour practices and labour welfare measures, the excitement around the newly introduced RGW Act is understandable. Since the law is about contract labourers operating in a platform enabled gig economy, it is important to understand their concerns. Taxi drivers, delivery boys, plumbers, electricians, consultants, bloggers, etc., are all part of the gig economy.

However, the life of semi-skilled gig workers like Uber drivers or Zomato delivery boys is much different than that of high-skilled gig workers involved in consulting services such as legal, accounting, economics, and finance. The latter group already has traditional jobs. The gig work for them, in most cases, is just another option, and therefore the bargaining power is greater. Wages are higher and life is good.

The same is true for aggregators/owners of capital lending out their capital assets. For instance, people renting out their bungalows through Airbnb, or renting out their cars through Zoomcar, Enterprise, etc., have seen an increase in returns over time.

However, this is not the case with semi-skilled gig workers, often finding them on the wrong side of the aggregators. With no cap on working hours, downward spiraling minimum wage rates, absence of social security payment, and arbitrary decision to deactivate workers from the platform, life can be worse.

In July 2021, the Indian Federation of App-Based Transport Workers (IFAT) filed a petition before the Supreme Court of India, arguing that aggregators such as Ola, Uber, and Zomato violated Article 14 (Right to Equality), Article 21 (Right to Freedom) and Article 23 (Right against Exploitation) of the Constitution of India, 1950.

To understand the working conditions of Ola and Uber taxi drivers in India, IFAT and the Transport Workers’ Federation (ITF) conducted surveys involving 2,128 respondents across 6 cities in India. This survey found that on average taxi drivers spend between 16 and 20 hours in their cars. Due to long driving hours, 89.8 per cent of the respondents claim they get less than 6 hours of sleep. These taxi drivers suffer from a variety of health issues such as backache, liver disease, constipation, and waist and neck pain. And yet, the aggregators do not pay these drivers health and accidental coverage.

Another related study conducted by Tata Institute of Social Sciences (TISS), Hyderabad, on food app delivery workers such as Uber Eats and Zomato, found that 60 per cent of the respondents work seven days a week, and 47 per cent of the respondents work more than 12 hours a day.

Worse, at times the aggregator reduces the minimum wage rates, and there is no added-on benefit on account of higher fuel prices or even ferrying heavy goods with no upper limit on weights.

India, the most populous country in the world (1.43 billion people), has an excess supply of working-age population with a median age of around 28 years.

Jobs are hard to come by and according to the government’s own Periodic Labour Force Survey (PLFS) for 2021-22, the unemployment level remained stagnant at 8.8 per cent and has not changed much since 2017. This is not surprising as many lack technical education and tertiary level certificates - only 1.3 per cent have technical education and only 0.7 per cent have a graduate certificate in vocational education.

The alternatives are low-paid gig workers, with the number of gig workers estimated at 7.7 million in 2020, further increasing to 23.5 million by 2030. A recent BCG report says the gig economy has the potential to add up to 1.25 per cent to India's GDP, create up to 90 million jobs in the non-farm sectors (around 30 per cent) and transact over $250 billion in volume of work. The majority of these jobs are in the construction, manufacturing, transportation and logistics, and personal services sectors.

This calls for government intervention that will uphold labour rights with humane labour practices. The State of Rajasthan showed the way by enacting the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023. However, the law falls short of expectations on many counts.

The law defined the aggregators as, a “digital intermediary… and includes any entity that coordinates with one or more aggregators”. The definition does not classify the aggregators as employers. Also, the law suggests that identification numbers of the gig workers cannot be dropped impromptu and will stay for perpetuity in the platform. This can be used against the workers.

There is nothing in the law that states, in case the gig worker is registered in more than one platform, how the division of social security payments will be divided among the aggregators. In fact, the social security payments, which are meant for life insurance and accident coverage, are already offered through other Central government schemes. For instance, the Pradhan Mantri Jan Arogya Yojana provides health coverage and Pradhan Mantri Suraksha Bima Yojana covers accidental coverage.

The RGW is also not clear about how the social security payment will be disbursed on a need-based requirement. A software professional driving Uber part-time will have a different need in comparison to a full-time Uber driver. Therefore, these add-ons in social security benefits are not going to make much of a difference. On the contrary, as most of these services are price inelastic, the aggregators are going to pass on this element of welfare tax to the consumers. For example, commuters do not care about higher taxi fares during office hours.

The real difference would have been if the law prohibited the aggregators from tweaking the working hours, minimum wage rates, and working conditions; and classifying the aggregators as employers. This is not the case. Nevertheless, the law is a baby step in the right direction.

(Nilanjan Banik is Professor and Program Director, Economics and Finance, at Mahindra University. Views expressed are personal)