The gig economy has significantly transformed the nature of work and employment relationships, challenging traditional models and sparking discussions about labor rights and the future of work.

The gig economy refers to a labor market characterised by the prevalence of short-term, flexible jobs, often mediated by digital platforms or technology. Individuals engaged in such job roles are often referred to as "gig workers" or "independent contractors. They take on tasks or projects on a temporary or freelance basis, rather than being traditionally employed in long-term, full-time positions.

According to NITI Aayog data, the number of gig workers is expected to reach 23.5 million by 2029-30 from 7.7 million in 2020. Currently, about 47% of the gig work is employed in medium-skilled jobs, about 22% in high-skilled jobs, and about 31% in low-skilled jobs. But the increase may bring its own problems in terms of the stability and welfare of these workers.

“Industries such as e-commerce, food tech, logistics, and retail are set to increase recruitment of temporary staff, mainly in delivery, logistics, warehousing, sorting, and packing positions. However, gig workers encounter issues such as income instability, unpredictable hours, and the absence of crucial benefits, such as health insurance, retirement plans, and paid leave,” says Anand Ramanathan, Partner and leader Consumer industry, Deloitte.

Anand further highlights that the number of gig workers has seen a continuous increase in metro and tier-1 markets wherever e-commerce and hyper-local deliveries have expanded. “Governments need to make efforts to acknowledge the gig workforce as a formal workforce under labour laws in budget 2024,” says Anand.

Regulatory policy is needed

The gig workforce needs to be regulated in India, as over a million people are expected to join this workforce in the next decade. Last year,the government announced the creation of a national employment policy that will provide social security benefits to gig/blue collar workers. This policy was aimed to help strengthen the financial resilience of gig workers.

“Failure to promptly establish a regulatory framework for gig workers will adversely affect the burgeoning digital economy and its workforce. The government should initiate tripartite consultations to comprehend the intricacies of the gig economy and craft a balanced legal framework that harmonises business growth with the welfare of gig workers,” adds Anand.

Kajal Mallik, co-founder and CBO, PickMyWork, a gig platform that helps digital companies acquire end customers including shops for their products through a Pay-per-task model, is expecting policies that support the gig economy in the interim budget 2024.

“Gig platforms do well when there is financial support available, which is crucial for companies to grow and come up with new ideas. We believe that focusing on improving cash flow for small businesses will make our economy stronger and help platforms like ours succeed. We also think it's important for the government to continue its commitment to digital transformation. We expect them to take steps that make it easier for technology to be integrated seamlessly, which will help our gig workers and digital companies adapt to the changing landscape. Overall, we want policies that encourage economic growth and support the ambitions of our young workforce,” explains Kajal.

The increasing number of gig workers in India calls for a defined regulatory framework around gig employment, says Anshul Khurana, Co-founder of Entitled Solutions.

“Gig employment seems to have significant potential to transform the employment landscape in India. An inclusion of gig employment and clear definition concerning labor laws, and compliance requirements will be huge. Within this framework, an important consideration is needed for issues related to healthcare access for gig workers. The regulation of the gig workforce can pave the way for the next push that it needs to thrive,” says Anshul.

Some key challenges to be addressed

According to Niti Aayog report, people engaged in the gig or platform economy face problems with:

• Access to internet services and digital technology,
• Lack of job security,
• Irregularity of wages, and
• Uncertain employment status

At the very least, regulations should be set in place to enforce decent working conditions and well-being of workers. When gig workers have grievances and complaints against the platform, they need some recourse and a government-supported intermediary may be of help here.

Lack of job security and irregular wages means that gig workers might not have financial stability even after many years of work. NITI Aayog had already recommended catalyse platformisation and accelerated financial inclusion.

The culture of the gig economy has been advantageous to both enterprises and workers. Hence, provision of social security measures similar to what Singapore has started for its gig workforce, low-cost skill development opportunities will prove to be beneficial for India’s gig workforce, which has the potential to contribute an incremental 1.25% (approximately) to India's GDP over the long term.

Realising the significant social protection gaps during the Covid-19 outbreak, G20 in its Leader’s Declaration of November 2020, reiterated the commitment to ensure access to comprehensive, robust, and adaptive social protection for all, including those in the informal economy.