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As we are entering the age of the fourth industrial revolution and as the use of technology becomes ubiquitous, the traditional form of employment is also undergoing a massive change. Terms like ‘Uberisation’ of the workforce are gaining currency. Gig economy also called the ‘sharing’ economy, ‘open talent’ economy, ‘freelance’ economy and the ‘on demand’ economy represents the new paradigm of work. Gig economy is characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.  Instead of following a typical recruitment process, wherein the hiring firm offers set working hours and a standardised wage along with other terms of employment, in return for the commitment of staff, a gig worker are classified as an independent contractor. Instead of a fixed wage, workers get paid for each job or 'gig' that they undertake. A delivery driver as an independent contractor, for example, would get paid for each delivery that is successfully recorded.

 According to a report by McKinsey Global Institute, ‘Independent Work: Choice, Necessity and the Gig Economy’, 20 to 30% of the working age population in developed countries is engaged in independent work. According to a study by PayPal, ‘Insights into the Freelance ecosystem’, one in four freelancers are from India and the gig economy in India has the potential to grow up to $20-30 billion by 2025. Digitisation, internet penetration, technologically skilled workforce, advancements in information technology, a booming startup culture and skills in demand are propelling the growth of gig economy in India. According to a report by ICRIER titled ‘Future of Work in the Digital Era: Potential and Challenges for Online Freelancing and Microwork in India’, India is home to the second largest market of freelance professionals (about 15 million), standing next only to the US (approx 53 million). These 15 million Indian freelancers contribute to about 40% of total freelance jobs offered worldwide. (Kathuria & Et., 2017)

Technology has enabled global freelancing for individuals, and online platforms allow for the buyers and sellers of contract work to find each other. App-based technology platforms replace people as middlemen to connect consumers and producers quickly and easily, allowing individuals to perform a variety of tasks for complete strangers based on real-time demand. ‘Upwork’, an online platform which has jobs from low to high level skill set, seeks to connect businesses to a reliable and larger pool of quality talent, while at the same time workers can enjoy freedom and flexibility to find jobs online, enabled by technology. ‘Flexing It’ has a network of over 50,000 freelancers and 19000 clients and it aims to create a market for specialized, experienced independent consultants in India. The target group of ‘Flexing It’ is highly skilled consultants ranging from senior associates to experienced directors and strategy consultants. Other such platforms include Problogger for writing and content development, 99 designs for design and web development, Toptal and Codementor for coding and software development.

The Online Labour Index (OLI) developed under the iLabour project at Oxford University is the first economic indicator that provides data related to the gig economy which is equivalent to conventional labour market statistics. It measures the supply and demand of online freelancers across countries and occupations by tracking the number of projects and tasks across platform in real time. In July 2017, the index reported skills that different countries were bringing to the global online market. The top occupational category in the United States is writing and translation, while in India it is software development and technology.

One of the major advantages of being a gig worker or a freelancer is the flexibility associated with working hours, diversity of work since the worker is not tied with a single organization, career mobility and above all work - life balance. The workers can choose when they want to work, with whom they want to work and the volume of work they wish to undertake. Further people turn to gig jobs to supplement their earnings from a primary job or use it as a stop gap between roles. Millennials or Generation Y, the group of people born between 1980 and 2000, comprise 34% of India’s population and represent 45% of the Indian workforce. According to an article in the Times of India, ‘Living in the gig economy Key skill for millennials is preparedness to move across industries and roles’,  this number is expected to reach 75% by 2025. (Mathias, 2018) According to a 2016 Millennial Survey by Deloitte, 16.8% of millennials evaluate career opportunities by good work-life balance, followed by 13.4% who look for opportunities to progress, and 11% who seek flexibility. This makes gig economy an attractive prospect for millennials. Companies where millennial talent is a significant part of the workforce, are implementing initiatives like relaxed dress codes and flexi-time to attract, retain and engage with this group. In today’s employee market, options of a better work-life balance for millennials is a compelling competitive advantage. (Mathias, 2018)

From the recruiters’ point of view, it allows them to access the global talent pool and work in a cost - efficient manner. The firms generally do not provide facilities like paid leave, equity, vacation period, office space etc. to the gig workers as they are paid per project.  According to a report by Noble House titled, 'The Future of Work is Anywhere - Gig Workforce', 70 percent of the Indian Corporates have used gig workers at least once for major organisational issues in 2018. Further, the report said, nearly 45 percent of the human resource heads surveyed want to hire a gig worker so that they can supplement skills of the existing workforce and 39 percent would do this to reduce the cost and 10 percent for filling temporary vacancies in their teams.

According to various rounds of the National Sample Survey on employment and unemployment, substantially high proportion of females report their activity status as attending to domestic duties. In 2011-12, 35.3 per cent of all rural females and 46.1 per cent of all urban females in India were attending to domestic duties, whereas these rates were 29 per cent and 42 per cent respectively in 1993-94. (Verick, 2014) Women in India largely continue to serve as “untapped potential” in the labour force as they tend to end up in marginal jobs, often home-based (as a contributing family worker/unpaid worker). The decision as well as the ability of women to engage in the labour force hinges on a number of factors such as educational attainment, fertility rates and the age of marriage, economic growth/cyclical effects and urbanisation. Flexibility provided by the digital economy offers hope for this domestically tied section of the society. The survey conducted by Noble House revealed that men and women both have an almost 50:50 split in the gig economy against the traditional workforce where the ratio is about 70:30. Some targeted platform for women include ‘Ghar Se Naukri’ which aims at women empowerment by providing them part time freelancing opportunities. It collaborates with third party firms who carry out reskilling and upskilling of women freelancers, ‘JobsForHer’ provides opportunities for women who have taken a break for 1 to 3 years and are trying to return to the job market.

The reported employment share of India’s informal sector is 75% in rural areas and 69% in urban areas. (Kathuria & Et., 2017) This shows that informal sector comprises an important part of the Indian labour force. Employment in the informal sector is commonly thought of as largely low-skilled or unskilled given low levels of formal education and training. It is erroneous to assume that technology is only a privilege of the skilled and an opportunity for the formally employed. Technology is not only creating jobs for less educated workers, it is also an opportunity for informal workers to use technology and digital platforms in their work. (Bessen, 2014) The occupational sectors sampled for India in a study by the John F Kennedy School of Government, included garment makers, construction workers, incense stick rollers and waste pickers. The findings from this study suggest that informal workers and their organizations are beginning to use technology in their work. While individuals rely on mobile phones, organizations use the Internet and online platforms. (Chen, 2014) I Got Garbage provides a series of web-based platforms which are used by waste pickers in Bangalore to track and trace trash in the city. It creates opportunities for the marginalized section of waste-pickers to go about their work each day with more dignity and recognition. Technology upgradation is also a huge opportunity for one of the largest informal sectors of the economy – retail trade and distribution. (Kathuria & Et., 2017) HarVa is rural BPO which aims to create sustainable inclusive growth in rural India by creating value through skill development, microfinance etc. It tries to engage workers in the rural areas in the fields of data entry, processing and conversion, document scanning, web research and call centre services.

These platforms enable the buyer/seller marketplace to come together with a lot of benefits but also raises many ethical questions on employment status, taxing and job security. With virtually no job security or any benefits of employment, the trend of gig economy can be dangerous for workers with relatively low level of skills as they hardly have any bargaining power. In November 2018, drivers associated with the app based taxi aggregators like Uber and Ola went on a strike to protest against the fall in their earnings and a similar strike was carried out by Swiggy delivery executives in December 2018. These workers are not represented by any trade unions and are generally considered to be self – employed. Online platforms argue that they are no more than neutral marketplaces in which workers and customers meet. By this logic, workers ought to count as self-employed. But the standards to which some platforms hold workers tell a different story. Food-delivery riders are often told to wear a uniform; drivers for ride-hailing apps need to maintain a good rating or can be kicked off the platform. Platforms have a legitimate interest in maintaining their quality of service. But it cannot be right that some firms specify how workers must submit to the duties of acting like employees even as they reject the responsibilities of acting like employers. (“How governments should deal with the rise of gig economy”, 2018)

In this context, recently a judgement was passed in the UK about the rights of workers which has wide ranging consequences for the growth of gig economy. The case centred on the employment status of Gary Smith, a plumber who worked on a self-employed basis with Pimlico for approximately six years. The UK’s Supreme Court found that Pimlico exercised tight administrative control over Smith, imposed conditions around how much it paid him and on his clothing and appearance for work, and restricted his ability to carry out similar work for competitors if he moved on from the company, all supported the conclusion that he was a ‘worker’ and not genuinely self-employed. (Bowcott, 2018)

Does gig economy have the potential to revolutionise employment patterns in India? According to the IMF, youth inactivity is the highest in India compared to other emerging and developing countries at about in 30 per cent. (Bhati, 2019) A recent data compiled by Mumbai-based Centre for Monitoring Indian Economy, reportedly claimed that the unemployment rate rose to 7.2 per cent in February 2019. Exactly a year back, in February 2018, the unemployment rate in India was hovering just 5.9%. In the last 12 months, the number of employed people in India slipped down to 400 million from 406 million in February 2018. In this background, gig economy offers the prospect of improving unemployment trends in India. With a young population geared to join the workforce every year, it is alarming that joblessness should impact people and the economy. (“What are the new job roles in India that can be the best career ladders?”, 2019)

According to an article in The Hindustan Times, ‘The road to social protection, beyond jobs’,  only 10.3% of the working population in India report contributing to social insurance plans. Further, new working conditions created by the rise of gig economy mean that social protection is not available to an increasing share of people. While highly skilled and well-paid freelancers can save and buy insurance from the private sector, poor unorganised workers cannot afford it. The recently announced Pradhan Mantri Shram Yogi Mandhan, intends to provide an assured monthly pension of &undefined;3,000 a month to workers in the unorganised sector who earn up to &undefined;15,000 per month. This is a step ahead as far as social security for people working in the unorganised sector are concerned but a lot more needs to be done and gig economy is opening up new space for public policy discussions on the issue of job and social security. Will the gig economy prove to be the future of work or just another example of techno- capitalism, it remains to be seen?

 References –

 Bessen, J. (2014, March 21).How technology creates jobs for the less educated workers. Harvard Business Review. Retrieved from the website: https://hbr.org/2014/03/how-technology-creates-jobs-for-less-educated-workers

Bhati, N. (2019, March 7). Youth inactivity in India at 30%, highest among emerging markets: IMF economist. Centre for Monitoring Indian Economy. Retrieved from the website: https://cmie.com/kommon/bin/sr.php?kall=warticle&dt=2019-03-07%2009:52:02&msec=686

Bowcott, O. (2018, June 13). Gig economy: heating engineer wins claim against Pimlico Plumbers. The Guardian. Retrieved from the website: https://www.theguardian.com/business/2018/jun/13/pimlico-plumbers-gig-economy-heating-engineer-wins-claim-against-pimlico-plumbers

Chen, M.A. (2016). Technology, informal workers and cities: insights from Ahmedabad (India), Durban (South Africa) and Lima (Peru). International institute for Environment and Development.

 How governments should deal with the rise of gig economy. (2018, October 6). The Economist. Retrieved from the website : https://www.economist.com/leaders/2018/10/06/how-governments-should-deal-with-the-rise-of-the-gig-economy

Kathuria, R., Kedia, M., Varma, G., Bagchi, K., Khullar, S. ( 2017, December). Future of Work in a Digital Era: The Potential and Challenges for Online Freelancing and Microwork in India. ICRIER

Mathias, L. (2018, December 15). Living in the gig economy: Key skill for millennials is preparedness to move across industries and roles. Times of India. Retrieved from the website: https://timesofindia.indiatimes.com/blogs/toi-edit-page/living-in-the-gig-economy-key-skill-for-millennials-is-preparedness-to-move-across-industries-and-roles/

Shelley, M. (2019, March 7). Unemployment rate in India in 2019: A worrying sign for all Jobseekers. Dazeinfo. Retrieved from the website: https://dazeinfo.com/2019/03/07/unemployment-rate-india-jobs-feb-2019/

Verick, S. (2014). Women’s labour force participation in India: Why is it so low?. International Labour Organisation.

What are the new job roles in India that can be the best career ladders? (2019, February 7). India Today. Retrieved from the website: https://www.indiatoday.in/education-today/jobs-and-careers/story/what-are-the-new-job-roles-in-india-that-can-be-the-best-career-ladders-1450588-2019-02-07

Image credits – www.rocketlawyer.co.uk

 

 

 

 

 

 

 

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Written By Premansh Sahni

I'm an undergraduate economics student at Lady Shri Ram College for Women and I love writing about finance and economy.

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