Why in the News?

The Fairwork India Ratings 2024 report examines the changing nature of platform work as platforms increasingly take control of when and for how long workers can provide services, or gigs.

The report titled ‘Fairwork India Ratings 2024: Labour Standards in the Platform Economy’ is the sixth consecutive annual study of this nature conducted by the Fairwork India Team.

It is a joint effort by the Centre for IT and Public Policy (CITAPP), International Institute of Information Technology, Bangalore (IIIT-B), in association with Oxford University.

What’s in Today’s Article?

• About Gig Economy (Meaning, Gig Workers, Size of Economy, Average Income, Challenges, etc.)
• News Summary (Key Findings of the Report) 

What is Gig Economy?

• A gig economy is a free market system in which organisations hire or contract workers for a short span of time.
• Simply put, the positions are temporary to meet the company’s requirements by having short-term engagements.
• Startups like Ola, Uber, Zomato, and Swiggy have established themselves as the main source of the gig economy in India.

Who is a Gig Worker?

• According to the Code on Social Security, 2020 (India), “A gig worker is a person who performs work or participates in work arrangements and earns from such activities, outside of the traditional employer-employee relationship.”
• They are independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers.

What is the Size of Gig Economy in India?

• A NITI Aayog study on “India’s Booming Gig and Platform Economy” has estimated that at present, about 47 per cent of the gig work is in medium-skilled jobs, about 22 per cent in high skilled, and about 31 per cent in low-skilled jobs.
• These figures clearly indicate the importance of the gig working community in the Indian economy.
• Ensuring the comfort and security of this community is investing in a more progressive and prosperous future.
• Various studies have indicated that participation in the gig economy is higher in developing countries(5-12 percent) versus developed economies(1-4 percent).
  • Most of these jobs are in lower-income job-types such as deliveries, ridesharing, microtasks, care and wellness.
• These studies further estimate that in 2020-21, 77 lakh workers were engaged in the gig economy. 
• The gig workforce is expected to expand to 2.35 crore workers by 2029-30.

What is the Average Age/Income of Gig Workers in India?

• The median age of Indian gig workers is 27 and their average monthly income is Rs 18,000.
• Of these, about 71 per cent are the sole breadwinners of their families. Additionally, gig workers operate with an average household size of 4.4.

Challenges Faced by Gig Workers:

• While platform companies have created avenues of employment, it has often been marred by low wages, unequal gender participation, and a lack of possibility for upward mobility within an organisation.
• This has triggered protests from workers at companies like Swiggy, Zomato, Ola, Uber, and Urban Company, among others.
• Gig workers are typically hired by companies on a contractual basis and are not considered their employees.
• As a result, they do not receive some of the benefits that an on-roll employee of the company may have.
  • This means they often do not receive benefits like paid sick and casual leaves, travel and housing allowances, and provident fund savings, among other things.

What Needs to be done in Order to Improve the Living Standards of these Gig Workers?

• Fiscal Incentives:
  • NITI Aayog in its report ”India’s Booming Gig and Platform Economy” has said that fiscal incentives such as tax-breaks or startup grants may be provided for businesses that provide livelihood opportunities where women constitute a substantial portion of their workers.
• Retirement Benefits:
  • The report also recommended firms adopt policies that offer old age or retirement plans and benefits, and other insurance cover for contingencies such as the Covid-19 Pandemic.
  • Such plans and policies may be envisaged under the Code on Social Security, 2020.
  • Businesses should consider providing income support to workers as it would be a “critical step in providing assured minimum earnings and social security from income loss in the wake of uncertainty or irregularity in work”.
  • It also suggesting offering paid sick leave to workers apart from insurance cover.
• Case Study: The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023
  • The Rajasthan State Assembly passed the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023.
  • Under the Act, a board will be established to ensure gig workers’ registration and welfare, addressing their vulnerabilities and providing a platform for collective bargaining and negotiations.
  • The board can serve as an independent grievance redress mechanism.
  • The Act also has a provision of establishing a social security fund funded through a fee on every transaction.

Fairwork India Ratings 2024 report:

• The Fairwork India Ratings 2024 report evaluates the working conditions of platform workers across various digital platforms in India.
• It highlights that many platforms do not ensure that their workers earn a local living wage and are generally unwilling to acknowledge the collectivization of workers.
• The report also discusses potential legislative changes for gig workers in states like Karnataka and Jharkhand.
• Key Findings of the Report:
  • Overall Ratings:
    • No platform achieved more than 6 out of 10 points in the assessment.
    • The platforms were evaluated on five key principles: Fair Pay, Fair Conditions, Fair Contracts, Fair Management, and Fair Representation.
  • Assessment of Fair Pay:
    • Only Bigbasket and Urban Company earned the first point under Fair Pay by ensuring a minimum wage that covers at least the local minimum wage after deducting work-related expenses.
    • No platform received the second point, which requires proof that workers earn a local living wage after work-related costs.
  • Evaluation of Fair Conditions:
    • Platforms such as Amazon Flex, BigBasket, BluSmart, Swiggy, Urban Company, Zepto, and Zomato earned points for providing safety equipment and safety training.
    • BigBasket, Swiggy, Urban Company, Zepto, and Zomato were further recognized for offering accident insurance and compensation for income loss due to medical reasons.
  • Fair Contracts:
    • BigBasket, BluSmart, Swiggy, Urban Company, Zepto, and Zomato were awarded points for making contracts accessible and transparent.
    • They also had protocols to protect worker data.
  • Fair Management:
    • Platforms like Amazon Flex, BigBasket, BluSmart, Flipkart, Swiggy, Urban Company, and Zomato provided mechanisms for appeals against disciplinary actions.
    • BluSmart, Swiggy, Urban Company, and Zomato conducted regular external audits to prevent biases in work allocation.
  • Fair Representation:
    • Despite a rise in platform worker collectivization over the last six years, no platform showed evidence of recognizing collective worker bodies or unions.
• Implications & Future Prospects:
  • The Fairwork India Ratings 2024 report underscores the growing attention towards gig worker welfare in political and legislative discussions.
  • However, the report raises concerns about the slow pace of actual implementation.
  • It calls for a balanced approach where platform companies, government bodies, and worker collectives work together to ensure better standards of living and working conditions for gig workers in India.
  • Overall, the report serves as a crucial reminder of the challenges faced by gig workers and the gaps that remain in ensuring fair work conditions across digital labor platforms in India.