By Dr. Indranil Bose Associate Dean and Professor School of Management
The term “gig” originated in the music business, where performers would accept occasional paid gigs outside of their regular studio or band. Additionally, there are two categories of gig work: platform jobs, which comprise gig marketplaces like Ola or Up-work that link service suppliers (gig workers) and service recipients., and non-platform jobs (think construction or agricultural workers; these are jobs where an internet website or app plays no part at all!). We’re delving into the gig economy’s implications for India today. One of the biggest populations of gig economy workers worldwide is in India. Estimates range from 8 million to 18 million, although a precise count is impossible to determine. In 2021, around 7.7 million gig laborers were working in India, according to Niti Aayog. By 2030, this figure is projected to increase to 23.5 million, positioning India as the world’s third-largest gig economy. The gig economy gained significant attention as the epidemic struck and millions of people lost their employment. While ride-hailing firms like Uber and Ola suffered, many unemployed workers found salvation on e-commerce and food delivery platforms like Amazon and Zomato. The International Labour Organization (ILO) reports that a third or more of the gig workers they spoke with entered the gig economy after April 2020, primarily due to the low entry barriers and scarce job options. According to a Nasscom analysis, two-thirds of businesses hired gig workers in 2022, up from 57% in 2020. Where are gig workers employed, even if their numbers have increased recently? According to a survey by Niti Aayog, the retail trade industry employs the most percentage of gig workers. Niti Aayog’s report highlights that the retail trade sector employs the highest share of gig workers at 40%, followed by transportation and storage (20%), and manufacturing (10%).
The majority of hiring occurs in the areas of food delivery and online shopping, then home maintenance, repairs, taxi driving, cleaning, and personal care services. Additionally, the survey states that nearly half of these positions call for a medium level of expertise, with low-skilled positions making up 31% and high-skilled positions 22%.
By 2030, the personal services sector—which includes jobs like babysitters and beauticians—is predicted to become a significant employer, followed by the real estate and construction and transportation and logistics industries.
The need for gig workers is still very much in demand. All cities, big and small, have seen an increase in demand over the past year. An additional factor that influences demand is seasonality. In India, the months of September through December are often regarded as the busiest for the consumer sector, and this also happens to be a popular time for internet retailers.
Online retailers observed a spike in sales of a wide range of goods during the previous Diwali. For Amazon, the key categories were luxury beauty items, jewelry, high-end smart watches, skin care, and traditional apparel. Revenues from small and medium-sized businesses increased by 35% on its platform in the past year. Compared to the pre-festive period, transactional vendors on Flipkart had a 2.5-fold increase in business over the seven-day shopping festival. ‘Meesho Mall’, on the other hand, experienced a threefold jump in orders compared to usual days. Similarly, Myntra sold 190 kurtas and kurta sets, 75 pairs of footwear, and 90 pairs of denims every minute during the festive season.
Typically, businesses restock and bring on a few temporary employees. Online markets function similarly. To accommodate the increasing demand, they set up more riders. E-commerce and fast commerce businesses may hire 20% to 40% more people this holiday season than they did last. That translates to an extra 10–12 lakh delivery riders on the road.
Furthermore, Christmas bonuses and extra incentives draw a lot of individuals. According to The Economic Times, over the most recent holiday seasons, delivery executives of rapid commerce platforms reportedly received an additional ₹13–15 per order surge benefit on top of their regular pay per order. But they have to put in more hours at work in order to receive some perks.Riders and delivery executives frequently lament their unreasonable work schedules (which often exceed 10 to 12 hours a day) and inadequate pay. Not only that, but living past retirement age and through layoffs is more difficult in the absence of a social security net. But despite their complaints, the ILO’s research revealed that only few employees said they would like to quit gig labor and look for alternative employment options. Even though many workers were excluded from many government decisions on a macro level, inclusion efforts are being made in numerous discussions.
The state governments of Rajasthan and Karnataka, for instance, are working to include gig workers in social programs. Likewise, in order to provide social security benefits to these workers, the federal government intends to incorporate them into the e-Shram portal. Companies are interested in serving these workers as well. For instance, HDFC Bank launched the GIGA financial suit for companies that offer loan, credit card, insurance, and savings account products. Perhaps more concrete efforts will be taken in near future in this regard.
The gig economy is poised for continued expansion. As the nation progresses towards urbanization, there is likely to be an increased demand for location-specific gig workers. Concurrently, as organizations adopt hybrid work arrangements, the need for skilled freelancers is also on the rise.
Nevertheless, it is essential to consider the lower labor costs in India, which significantly contribute to the success of the gig economy. This cost advantage enables both domestic and international firms to engage gig workers for a wide range of tasks, from delivery services to technical support.
India is progressively leveraging the gig economy model to stimulate economic growth. While the gig economy is expected to play a vital role in this development, it is important to recognize that as the country evolves, the cost of living and minimum wages may also increase. This raises a critical question: will the low-labor cost model remain viable? Therefore, the sustainability of this model will hinge on several factors, including regulatory frameworks and social security provisions for gig workers.
As India experiences a significant economic transformation, the primary challenge is to achieve equilibrium. Is it possible to leverage the gig economy’s capacity for growth and innovation while simultaneously guaranteeing equitable treatment and social security for its workers? The solution may reside in forward-thinking policies, corporate accountability, and potentially a redefinition of the concept of “employment” in the 21st century. As we traverse this evolving landscape, it is evident that the future of work in India is currently being shaped, one gig at a time.