Gig Economy::A False Freedom
BY KENISHA MARTINS / NOVEMBER 27, 2021
The gig economy is transforming the employment sector and adding 1.25% to India's GDP, but whom does it really benefit?
s people lost their jobs and unemployment rates skyrocketed during the pandemic, we saw a dramatic shift towards a new system of employment, which was facilitated under the gig economy. For many people, this system became the only option to stay employed during the lockdown. In essence, it promises a brighter future with a more convenient way of conducting business than the traditional working model. Before diving deeper into the impact of this type of system, let's take a more extensive look at what exactly is the gig economy.
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The word 'gig' in the term 'gig economy' originated as a reference to the gigs booked by musicians. The jobs associated with a gig are usually thought of as being short, temporary, precarious and unpredictable, and gaining access to more of them depends on a good performance and reputation. Even though the gig economy today has a lot of parallels with this kind of work, it has drastically changed with the entry of online platforms. According to the Department for Business, Energy and Industrial Strategy (BEIS), UK, “The gig economy involves the exchange of labour for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment by task basis.”
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According to a report by the Boston Consulting Group (BCG), the gig economy has the potential to serve up to 90 million jobs (roughly 30% of India's non-farm workforce), add up to 1.25% to India’s GDP and create millions of new jobs across all sectors of India's economy.
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Essentially companies use digital platforms to attract short term labour contracts with their employer that allows them to be a freelancer and have control over their employment. Online platforms that facilitate this exchange of work are built on traditional systems of employment and concepts already existing within the economic ecosystem. As a result of the pandemic, there has been a huge boost in the number of online platforms that are currently providing such services, as they have in essence become the only way one could conduct transactions like booking a cab, ordering food or using any other delivery services during the past two years.
Credits: unknown
Due to the low barrier of entry and high accessibility of these jobs, this sector has increased drastically. According to a report by the Boston Consulting Group (BCG), the gig economy has the potential to serve up to 90 million jobs (roughly 30% of India’s non-farm workforce), add up to 1.25% to India’s GDP and create millions of new jobs across all sectors of India’s economy.
However, it is difficult to have an exact estimate of the number of individuals that are presently employed in the gig economy as there is no standard definition of what must be included in the gig economy. But there is no doubt in saying that the gig economy is growing faster and is reshaping, not only the standard 9 to 5 job but also changing aspects of society more broadly. A study done by Huws et. al. (2006) shows that within the gig economy “work is not only growing fast but spreading into diverse occupational areas”
Despite the enormous growth and the vast sea of opportunities, we see that the reality behind a lot of the work within the gig economy might not always seem like what it does on the surface level. In recent times we have seen more stories come up about the plight of the workers under the gig economy. We've heard a rising number of drivers working for food delivery companies, going on strike for the company's lack of accountability for its workers' safety, along with being severely underpaid and overworked.
A driver who worked with both Swiggy and Zomato commented on the gig system, "The whole system is gamified, so delivery agents are baited at the beginning with lots of orders to get them hooked, then one slowly begins to notice a decline. There are random unexplainable events where your ratings are reduced or fines are imposed and we suspect this is so that delivery agents are never made to feel they are doing too well. It pushes them to perform better, work faster, and longer and always be on their toes. The company finds some way or the other to punish you." This type of work intensification has been seen across the board within the gig economy and connects to broader trends of work intensification that can be seen throughout other sectors of the economy (Graeber, 2018).
Credits: Reuters
The gig economy business model promises freedom with the cost of little to absolutely no social security. Whether it is sickness, retirement or even maternity/paternity leaves all the responsibility is borne by the individual and not the company.
The gig economy business model promises freedom with the cost of little to absolutely no social security. Whether it is sickness, retirement or even maternity/paternity leaves all the responsibility is borne by the individual and not the company.
"[Some] new business models, including those enabled by new technologies, threaten to undermine existing labour market achievements, in areas such as improving employment formality and security, social protection and labour standards," says Deborah Greenfield, deputy director-general for policy at the International Labour Organisation in a press release. These concerns keep growing as the gig economy sector keeps growing. Despite these issues, a lot of workers can't afford to leave this type of work due to the low barrier to entry and the availability of jobs in these sectors that make them the only viable option for a lot of workers, especially those who have migrated for the search of employment. The pandemic has made the entire situation worse as a lot of these workers end up risking their family and their health and safety with practically no social security to fall back on.
There have been changes seen in the law and with the social security code implemented as the Union Ministry of Labour and Employment has accepted the recommendation of the parliamentary standing committee on labour, and proposed setting up a Gig and Platform Workers’ Social Security Fund in the draft Code on Social Security (CoSS), 2020. Though this is a start, the code is nowhere near perfect. The code requires aggregators like ride-sharing services, food and grocery delivery services and e-commerce platforms to contribute 1-2% of their annual turnover towards the social security of their workers.
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Credits: James O'Brien Studio
This could result in a higher cost taken by the aggregators which will eventually be borne by the gig workers. Pravin Agarwala, co-founder of BetterPlace an organization that has worked with Ola, Flipkart, Ecom Express, Swiggy, Zomato and Dunzo, among other organisations adds, that the costs for companies would go up by 10-15% and some of these companies might pass on the cost to employees, while others might consider hiring these workers full-time since they anyway have to shoulder the security benefits. Another huge problem would be the process of identification as the code requires every gig worker to be registered through an Aadhaar card. Research has shown that prior social programmes such as the PDS and the MNREGA were rifled by challenges of identification, with non-existent persons being added to the list of recipients in some cases, and qualified beneficiaries' names being omitted in others.
Despite the problems within the gig economy, it is a crucial part of building the economies of many countries and bringing more as well as better opportunities. With its flexible working hours and low barrier to entry, it continues to be a major contributor to many countries' economies. However, we must look for a more sustainable method for growth, along with the fair treatment of all workers that come under the gig economy. This warrants further research to create a safer work environment for these workers while allowing them to enjoy the benefits that the gig economy has to offer.
Credits: Sr. Garcia via wired.com
Keywords
Gig Economy, unemployment, Freelancers, Online Platforms, short-term labour, delivery services, International Labour Organization, work environment, Swiggy, Zomato, social security
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References
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Woodcock, J. (n.d.). The Impact of the Gig Economy. OpenMind. https://www.bbvaopenmind.com/en/articles/the-impact-of-the-gig-economy/
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Shekhar, D. (15, October 2020). Why the code on Social Security, 2020, misses the real issues gig workers face. Forbes India.
https://www.forbesindia.com/article/take-one-big-story-of-the-day/why-the-code-on-social-security-2020-misses-the-real-issues-gig-workers-face/63457/1.
Rao, S. (2021, January 29). How the Social Security Code 2020 Fails Gig Workers. Spontaneous Order
https://spontaneousorder.in/how-the-social-security-code-2020-fails-gig-workers/
Woodcock, J. & Graham, M. (2020). The Gig Economy: A Critical Introduction. Polity.
Salve, P. (2019, June 07). Overworked and Underpaid, India’s “Gig Workers” are Survivors of a Flawed Economy. Scroll.
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