Regulating gig-based work

The Karnataka government’s recent intent to introduce legislation for the welfare of gig workers is a necessary step to overcome the challenges to boost gig-economy in India.

What is Gig Economy?

• As per the World Economic Forum (WEF), gig economy is defined by its focus on workforce participation and income generation via “gigs”, single projects or tasks for which a worker is hired.
• Gig economy includes all platformsthat hire independent workers across sectors like e-commerce, technology, food & beverages, home services among others.
• Gig workers are typically hired by companies on a contractual basisand are not considered employees. They do not receive some of the benefits that on-roll staffs do.
• Classification: Gig workers can be broadly classified into:
• Platform workers: Those whose work is based on online software apps or digital platforms such as food aggregator platforms Zomato, Swiggy, Ola, and others.
• Non-platform-based workers: Casual wage and own-account workers in conventional sectors, engaged part-time or full-time.

Benefits of Gig Economy:

• For Workers: Gig economy can provide more flexibility, autonomy, income opportunities, skill development, and inclusion.
• For Employers: It can enable access to a large and diverse pool of talent, lower fixed costs, higher scalability, and better customer satisfaction.
• For Customers: It can offer more choice, convenience, quality, and affordability.

Current trend in the Indian Economy-

• about 47% of gig work is in medium skilled jobs
• about 22% in high skilled
• about 31% in low skilled jobs

The trend shows the concentration of workers in medium skills is gradually declining and that of the low skilled and high skilled is increasing.

Expected trend:

• While in 2020-21, the gig workforce constituted 2.6% of the non-agricultural workforce or 1.5% of the total workforce in India, by 2029-30, gig workers are expected to form 6.7% of the non-agricultural workforce or 4.1% of the total livelihood workforce in India.

Why there is a need to regulate Gig- Economy?

• Due to non-permanent in nature: These jobs mainly have temporary contracts typically come with less protection, fewer benefits and pecuniary discounts.
• To bring gig-workers under Employment benefits protocol: The workers are mostly left out of the traditional social protection systems such as unemployment benefits, sick pay and pensions.
• Insurance and financial aids: Most transactions on the gig economy are done via the internet and as such they can be tracked. These companies do need to contribute to insurance and other social contributions.
• To reduce inequality of Income: Due to the increasingly complex supply chains and sub-contracting of gig jobs, make it hard to enforce protections. But without doing so we will not be able to combat the increasing levels of inequality.