Our expanding gig economy must treat workers fairly

News: 50 women partners of Urban Company’s (UC) salon and spa vertical are protesting against policy changes that will come into effect from January 2022. These, they claim, will affect their ability to earn and are therefore unfair labour practices.

UC, India’s largest home-services provider, has filed a lawsuit in Gurugram’s district court against the protests. The judgement in this case could have an impact on the future of employment in India’s gig economy.

What is the potential of India’s Gig economy?

A joint report by the Boston Consulting Group and Michael & Susan Dell Foundation in March 2021, pointed to the potential of India’s gig economy.

Gig economy in India has the ability to sustain up to 90 million jobs in India’s non-farm economy alone, besides adding 1.25% to the GDP.

What are some concerns/issues related to the Gig economy?

– Platform businesses have to manage a workforce that they see as less committed, given its temporary engagement, and also consider it to be ‘less productive’.

– Exploitative rating system: Platform companies also appraise the performance of gig workers on a rating system based on customer feedback. While companies use this feedback to improve performance, gig employees often reject it. This is particularly true for service-dominated platform businesses, where close engagement between a service-provider and the recipient results in a high possibility of negative feedback from the customer.

– Enculturation of workforce: Sometimes the gig platforms expand into new cities and countries. This presents another challenge in terms of the enculturation of geographically-dispersed temporary workers.

– Contractors, not full-time employees: Platform companies like Uber and Amazon have frequently been questioned in the UK and European Union, wrt their stance on treating gig employees as ‘contractors’.  Being contractors, they are not given the attendant benefits such as minimum wages, holidays and pensions.

Recently, the U. K’s Supreme Court upheld a previous ruling by the employment tribunal by stating that the 25 drivers who had brought a case against Uber are indeed employees and not contractors.

What is the way forward?

Reforming the exploitative rating system: A better way to rate them can be to take the onus for any poor performance and then work to improve ratings by training and motivating workers. This would also ensure the loyalty of the gig workforce.

Tackling enculturation problems: For this, the companies will need to ‘imprint’ its cultural norms, so that even temporary workers come to possess shared values.

Source: This post is based on the article “Our expanding gig economy must treat workers fairly” published in Livemint on 28^th Dec 2021.