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Fairwork India Report shows that 11 platforms in India report about 30 lakh workers in 2021. The platform economy, described as the new-age workforce, holds immense potential. However, a grim reality hides beneath its glory.

India’s leading think tank, NITI Aayog, describes the platform economy as a result of the Fourth Industrialization Revolution (i.e., gig economy) in its latest report, India’s Booming Gig and Platform Economy.” 

The definition of the gig economy remains ambiguous and can include various workers outside of a traditional worker’s definition. However, the platform economy’s definition is “concretized” as it exclusively focuses on using online platforms such as Ola, Uber, Dunzo, Zomato, Swiggy, or Urban Company to connect with customers; their workers are called platform workers.

Independent work is not new, but its digital shift through platformization is. The number of web-based platforms has risen by three times and the taxi and delivery platforms have increased nearly tenfold globally. The Economic Survey of 2020-21 echoes the same; India has emerged as one of the world’s largest countries for flexi-staffing (i.e., gig and platform work).

The rise of platformization has been described as the “new normal” of work defined along three Fs: the future, flexibility, and freedom of work.

Nevertheless, what is its reality?

The platform economy is characterized by low-entry barriers. Access to internet-enabled smartphones and a monetizable tangible (driving) or intangible skills (cooking or plumbing), and the flexibility to hold multiple jobs (as they can choose the place and time of work) is advantageous to those with disabilities or care responsibilities. 

From an employer’s perspective, they can hire workers for services not needed regularly, helping them control expenses and retain the best talent for their business needs. For instance, a new website requiring a one-time overhaul can hire workers only for that period rather than a full-time in-house writing team.

The platform economy has considerable potential to leverage India’s demographic dividend of more than 400 million millennials. While the platforms provide an immense opportunity for flexible work, they are fraught with anomalies.

The platforms classify workers as “drivers/delivery partners,” “independent contractors,” and not “employees,” giving them an excuse not to provide their workers with social or income security. This leaves the workers in a precarious state with no collective bargaining power. 

Further, NITI Aayog reports the rising platform economy as an opportunity for employment. However, the International Labour Organization’s (ILO) surveys suggest that the jobs created do not commensurate with people’s skills.As per ILO’s surveys, platform workers reported “that they have more skills as opposed to the demand for a task with a little difference by gender.”  On freelance platforms, 29% responded that they have significantly more skills than the task demands. 

These platforms describe freedom and flexibility using phrases such as “be your boss” or “you choose when you deliver”. However,  Independence in work was mentioned only by 11% of the delivery executives. 

Despite the rise of India’s vast platform economy, not even a single platform expressed willingness to recognize the association of the workers. This renders the workers in a precarious state as they do not have significant power to settle disputes and resolve their grievances, unlike employees who have rights in their employee agreements. They are entitled to leaves during their tenures, gratuity under the Payment of Gratuity Act, 1972, and protection against Sexual Harassment under Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, among others.

The report further finds that most workers surveyed worked full-time on a single platform and earned less than the hourly local minimum wage despite working for 48 hours a week. Second, only three out of the 12 platforms in the study compensated their workers for the lost income during externalities. These included being unable to log into work, sickness, and other personal reasons. Hence, as the report aptly states, “For the most part, platform work as a whole has remained largely invisible in the context of labor laws.” 

Salvaging the situation

First, they must be declared “workers” under the Social Security Act, 2008, with immediate effect, to bring them at parity with other formal sector workers. This will entitle them to life and disability cover, health and maternity benefits, Gratuity under the Payment of Gratuity Act, 1972, and paid leaves, among others.

Second, workers should be protected by giving them their due rights against occupational risks such as safety concerns regarding road safety, theft, and physical assault. Thereby, redressal mechanisms, remedial provisions, and provisions against criminal, service user, and workplace violence must be arranged for their safety. Furthermore, the worker-on-worker violence in the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, and the Industrial Employment (Standing Orders) Act, 1946, will favor and protect them at the workplace. They can take a legal route if their rights are violated at any point in their tenure, as “employees” in the formal sector can do.

Lastly, workers should be protected against occupational diseases and be offered work accident insurance. Corresponding with Indonesia’s initiative to provide insurance and accident coverage to workers via digital ways, ride-hailing, e-commerce, and delivery, platforms may create and adopt a model that provides accident insurance to all the platform’s delivery and drivers. These may be provided in collaboration with the government and private sector, as proposed under the Code on Social Security, 2020. Thus, the workers need not worry about contingencies of out-of-pocket expenditures. 

While the platform economy has immense potential for job creation, it is fraught with insecurity, including occupational risks and the lack of rights and grievance redressal systems. These must be addressed by the concerned authorities to create the “new age” workforce envisaged in the NITI Aayog Report.

Read more: The Need for Responsible Business Practices in the Technology Sector

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The opinions expressed in this essay are those of the authors. They do not purport to reflect the opinions or views of CCS.