A Zomato delivery boy on a motorcycle.
Snapshot
  • While the gig economy is a major employment driver in a modern world, its employees are more vulnerable to insecurity and instability.

    Time is ripe for their inclusion in social security planning.

A ‘gig economy’ is a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

It offers two types of task-based work.

One, ‘crowded work’, such as digital marketing, online tuitions, content writing, translating, graphic designing, software development, accounting, data analytics, legal work, medical transcription, tele-medicine and social work involving freelancers.

In other words, work which can be done from anywhere.

Second, ‘on-demand work’ such as personal transport services offered by Uber and Ola, food delivery services provided by Zomato and Swiggy, and e-commerce services of Amazon and Flipkart.

According to Payoneer’s Global Economy Index, 2019, India is among the top seven destinations for gig economy workers by dollar value.

Gig workers are considered as ‘independent contractors’ or ‘freelance workers’ or ‘partners’ and not ‘employees’.

They do not have regular wages or full-time jobs and generally have low or no social security benefits.

They have little savings or other safety nets to survive. Since the gig workers are not ‘employees’, most of them are caught between choosing to remain at home, self-isolating to avoid potentially passing the virus onto others or remaining in ‘essential’ service work to support themselves and their families.

At the same time, due to lockdowns, demand for some services offered in the gig economy have declined or become impossible to offer due to social distancing rules.

Gig Economy and Covid-19

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Amid Covid-19, the on-demand gig economy workers across the world are operating at the frontline, carrying people around and delivering essential goods at their doors.

For instance, in India, online grocery stores such as Big Basket and Grofers are providing services of delivery of essential items to customers in partnership with Uber.

Some innovative partnerships have developed to continue their work using gig workers such as Uber drivers in Bengaluru working with partnerships among start-ups, traditional businesses and hospitals to deliver essential goods or transporting healthcare workers.

After the end of lockdown 2.0, some e-commerce gig economy works have been resumed in select areas in India in compliance with government regulations, which will provide them some relief.

They are playing an enormous role in restricting the further spread of coronavirus by risking their health and safety like other warriors such as doctors, nurses, police and others.

The challenge now is. . .

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Governments around the world have announced insurance for health service providers and security personnel and hiked their salaries in some places, but gig workers have remained out of any such consideration.

Majority of them do not have access to any employment protection schemes such as health insurance and sick leave, and since they generally work hand-to-mouth, they may not have savings to fall back on.

In India, with the lockdown, millions of migrant workers have moved to their home towns and villages.

Seeing this as a potential threat of losing cheap labour, some relief measures for workers have been announced.

However, those working on on-demand platforms have been excluded.

The government bailout schemes rarely cover them or even when they do, their conditions are too stringent for gig workers to qualify.

Future of Gig Economy

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The gig economy has huge potential to create widespread impact across the economy.

The size of the gig economy is projected to grow by a 17 per cent compound annual growth rate and generate a gross volume of around $455 billion by 2023.

Several estimates show that between 70 million to 1.2 billion people are engaged in gig economy work globally.

Some studies predict that the freelancers could represent 80 per cent of the global workforce by 2030.

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Way Forward

The Great Depression and the Second World War led to widening the health and safety nets of the vulnerable and other workers’ in the US.

A similar response is expected across the globe after the Covid-19 pandemic would be over.

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To ensure that gig workers live a life of dignity, Covid-19 comes as an opportune moment to provide them the social security benefits and include them in the employee category, so they can get the benefits of social security and other government welfare schemes.

India can consider steps similar to California’s AB5 bill that recognizes gig workers as employers eligible for state and employer sponsored benefits such as insurance, overtime pay and leave.

It would set up a fund through corporate social responsibility (CSR) that will provide health insurance, pension and other benefits to gig economy workers.

It is noteworthy that the Indian government has introduced gig economy workers in the draft social security code circulated a few months ago, which includes health benefits and insurance coverage.

Further, companies like Ola Cabs and Zomato have started funds to support their workers, by seeking donations from the public and from management.

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The companies should come up with transparent rules and regulation to encourage public participation in such a fund.

The gig economy is going to be the future of work.

Therefore, there is an urgent need to provide better employment conditions, which will likely push more young job-seekers to participate in it full time, and not merely as a stop-gap solution in the absence of suitable employment.

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In the time of a pandemic like Covid-19, most of the corona warriors such as doctors, security personnel and others have been given hikes in their salaries and been provided huge amounts of life insurance cover in case of death during duty, but the gig economy workforce has remained neglected, even as it is also involved in serving people by risking lives.

Governments should consider their importance in these difficult times and provide them the necessary life insurance cover and benefits similar to other corona warriors. They must also be given free personal protection equipment such as disinfectants, gloves and masks, liquids for daily sanitization of their vehicles and regular medical checkup facilities including that of their families.

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