What is Gig Economy?

What’s in today’s article?

• Why in news?
• What is Gig Economy?
• Who is a Gig Worker?
• What is the size of Gig Economy in India?
• Challenges faced by Gig Workers
• What needs to be done in order to improve the Living Standards of these Gig Workers?

 

Why in news?

• Thousands of workers of Blinkit are protesting against a new payout policy.
  • Blinkit (formerly Grofers) is a Zomato-owned quick commerce marketplace that helps users shop for various products online, and delivers them in a flash.
• At the heart of the strikes is a change in the way Blinkit compensates its delivery workers.
  • Protesting workers said that they had joined Blinkit last year when the fee was Rs 50 per order.
  • Last year, it was reduced to Rs 25 per order, and has now been reduced further to Rs 15 with a distance-based fee component being introduced.
• These fresh protests mark a new flashpoint in the rising conflict between workers and the firms, especially in the gig economy.

 

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.
• Research studies by Boston Consulting Group (BCG) 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.

 

Challenges faced by Gig Workers:

• Lack of Social Security Benefits:
  • Gig workers are not entitled to social security benefits like regular employees, such as health insurance, pension, and employee provident fund.
• Inconsistent Income:
  • Gig workers have an unpredictable income as they are paid per task or project, which can lead to financial instability.
• Lack of Job Security:
  • Gig workers do not have a regular job and are often not guaranteed work, which can lead to job insecurity.
• Lack of Legal Protection:
  • Gig workers do not have legal protection, which can make it difficult for them to seek justice if they are exploited or mistreated by their employers.
• Limited Access to Financial Services:
  • Gig workers often do not have access to financial services, such as loans and credit cards, as they do not have a fixed income or regular employment.
• Long Working Hours:
  • Gig workers often work long hours to meet deadlines or complete projects, which can impact their health and well-being.
• Other challenges
  • It has often been marred by low wages, unequal gender participation, and a lack of possibility for upward mobility within an organisation
  • Gig workers are typically hired by companies on a contractual basis and are not considered their employees.

 

What needs to be done in order to improve the Living Standards of these Gig Workers?

• Fiscal Incentives –
  • 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.
  • This was highlighted by NITI Aayog in its report “India’s Booming Gig and Platform Economy”.
• 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.
    • 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 suggested offering paid sick leave to workers apart from insurance cover.

 

---

Q1) What is Code on Social Security, 2020?

 The Code on Social Security, 2020 is a legislation passed by the Indian parliament that consolidates and amends the laws relating to social security benefits for workers in India. It covers areas such as employment injury benefits, pension, health insurance, maternity benefits, and life and disability cover, among others. The code aims to provide social security benefits to all workers, including those in the unorganized sector and gig workers, and promote ease of compliance for employers. It is a significant step towards ensuring social security for workers in India.

 

Q2) What is NITI Aayog?

NITI Aayog (National Institution for Transforming India) is a policy think-tank of the Government of India that was established in 2015 to replace the Planning Commission. Its mandate is to provide strategic and directional inputs to the central and state governments to achieve sustainable development goals and enhance cooperative federalism by fostering the involvement of state governments in the economic policy-making process. The organization is chaired by the Prime Minister of India and includes senior government officials, experts, and special invitees as members.

 

---

Source: Anatomy of a strike: In workers’ protest against Zomato-owned Blinkit, a new flashpoint in gig work’s dismal reality | NITI Aayoga