Gig Workers in India – Benefits & Challenges – Explained Pointwise

Gig & platform worker unions have announced a strike on New Year’s eve against systemic exclusion from core labour entitlements of the workers in the segment. According to the Gig & Platform Services Workers Unions (GIPSWU), the gig workers continue to face pervasive harassment, discrimination, and violence. The gig workers have organized the strike to demand better safety gear, transparent pay structures, and official recognition of their labor rights.

Who are the Gig Workers?

• According to the Code on Social Security 2019, a gig worker is: “A person who works and earns through activities outside traditional employer-employee relationships.”
• Gig work is largely task-based, facilitated through digital platforms. Workers, including freelancers and independent contractors, are paid per task rather than through full-time contracts. Common roles range from food delivery to online freelancing and digital services.

What is the present status of Gig Economy & Gig Workers in India?

• As of now, India has around 7-8 million gig workers, and this number is rapidly growing. NITI Aayog estimates that the numbers of gig workers could expand to 23.5 million by 2029-30.
• The gig economy is expected to expand at a Compound Annual Growth Rate (CAGR) of 12%, reaching 23-25 million workers by 2030. This would mean that gig workers would make up 4.1% of India’s total workforce by that time.
• A report by Boston Consulting Group (BCG) suggests that the gig economy could potentially create 90 million non-farm jobs.
• The gig economy could create 90 million non-farm jobs and contribute an additional 1.25% to India’s GDP, reflecting its potential as a significant economic driver.

What are the factors behind rapid growth of Gig Economy in India?

What are benefits of Gig Economy & Gig workers?

1. Opportunities for Workers: Gig work provides flexible hours, helping workers balance personal and professional life. For example, a woman delivering groceries via Swiggy can manage childcare, while a freelance designer on Upwork can pick projects based on availability.
2. Business Advantages: Companies access cost-effective, short-term labor. Amazon and Flipkart hire gig workers during peak seasons, allowing rapid workforce scaling and higher productivity.
3. Economic Impact: By 2030, the gig economy could create 90 million jobs, handle $250 billion in transactions, contribute 1.25% to GDP, and represent 4.1% of the workforce. Platforms like Zomato and Ola illustrate its role in boosting employment and economic activity.
4. Inclusivity & Technology: Gig work is reaching Tier-II and Tier-III cities, offering jobs to local youth. Ride-sharing and food delivery are expanding in cities like Mysuru, Coimbatore, and Lucknow. AI and predictive analytics help assign tasks efficiently, cut waiting times, and increase earnings.
5. Skill Development: Gig work encourages skill enhancement and digital literacy, as workers learn new tools, platforms, and professional practices to stay competitive.

What are the challenges faced by the Gig Workers?

1. Income Volatility: Unlike traditional salaries, gig income fluctuates based on demand, season, or even the time of day. This “feast-or-famine” cycle makes long-term financial planning (like getting a mortgage) extremely difficult.
2. Lack of Benefits: Most gig workers are classified as “independent contractors,” meaning they do not receive health insurance, paid sick leave, maternity leave, or retirement contributions.
3. Operational Costs: Workers often bear the full burden of expenses, such as fuel, vehicle maintenance, insurance, and equipment, which can significantly eat into their “take-home” pay.
4. The “Black Box”: Platforms use opaque algorithms to assign tasks, set pay rates, and track performance. Workers often feel they are working for a “boss they can’t talk to.”
5. Arbitrary Deactivation: A sudden drop in customer ratings or a technical glitch can lead to “deactivation” (essentially being fired) without a clear human appeal process or due process.
6. Surge and Target Pressure: Many platforms use “gamified” incentives, pushing workers to work longer hours or take higher risks (like 10-minute delivery guarantees) to meet targets or earn bonuses.
7. Occupational Hazards: Delivery and transport workers face high risks of road accidents, extreme weather exposure, and physical exhaustion.
8. Misclassification: There is a global legal battle over whether gig workers should be considered “employees.” Until this is resolved, many remain in a “legal grey area” without the protection of minimum wage laws or collective bargaining rights.

What are the various initiatives taken by the government for Gig Workers?

What should be the way forward?

1. Implement existing legal framework better: Notify the detailed rules on eligibility, contribution rates, and benefit packages (health, accident, pension, maternity) under the social security fund for gig workers. Ensuring all gig workers are on e‑Shram and linking this to actual scheme delivery, not just data collection, including PM‑JAY coverage and existing pension schemes for unorganised workers.
2. Design a robust social security fund: Mandate 1-2% of platform annual turnover or payouts (capped as in the Codes) into a ring‑fenced social security fund, with public disclosure and digital tracking of all contributions and disbursements. Provide portable, proportional benefits (health insurance, accident cover, disability support, and old‑age income protection) that follow the worker across multiple platforms and cities.
3. Improve Work Conditions & Income Security: Guarantee minimum earnings floors or algorithmic “minimum standard orders” for pay, deductions, and insurance, drawing on models used in Australia and certain US jurisdictions.
4. Strengthen Worker Voice & Data Rights:
   1. Giving gig worker representatives real voting power in national and state Social Security Boards and Welfare Boards, with transparent criteria for their selection.
   2. Mandating platform transparency on algorithms that set fares, incentives, and ratings, and granting workers rights to explanation and appeal against automated decisions, as proposed in draft state legislation.
5. Encourage Platform Responsibility & Innovation:
   1. Offering tax or regulatory incentives for platforms that provide group insurance, skill‑upgradation, and savings products over and above statutory minima, while penalising free‑riding on the system.
   2. Promoting digital benefit wallets linked to worker IDs so that every platform contribution (statutory and voluntary) accumulates in one portable account, improving financial inclusion and credit access for gig workers.
6. Implement NITI Aayog’s RAISE Framework: