Gig Economy

—By Charu Latha

According to the Oxford English Dictionary, a gig economy is a labour market characterised by the prevalence of short-term contracts or freelance work or payment-by-task basis as opposed to permanent jobs. In a gig economy, organisations and business rely more on freelancers and independent workers, contracted on a short-term basis. It benefits businesses, workers, and consumers and also benefits the economy in terms of productivity, flexibility, and employment. Gig workers include those engaged in livelihoods outside the traditional employer-employee arrangement. From hiring an Uber cab, and booking Airbnb to professional services like teaching, writing, coding, or translation comes under the gig economy. The union budget 2021–22 took a giant step to formalise the gig economy with a proposal to launch a portal to collect relevant information on gig workers to help formulate social security schemes aimed at them. The government created a portal called the eSHRAM portal, a national database for unorganised workforce. As of December 2021, more than 7 lakh gig workers registered themselves.

NITI Aayog classified gig workers into platform and non-platform-based workers. Platform workers are those whose work is based on online software apps or digital platforms. Non-platform workers are casual wage workers and own-account workers working part-time or full-time in conventional sectors.

Why Gig Economy is Important

• Productivity: Gig economy can provide people with the opportunity and space to choose from numerous work options. Greater choice of work helps enhance their set of skills by exposing them to different working environments. This enhances their productivity. Companies can choose from a wide variety of talents and can get the work done on a short notice. The gig economy improves the productivity of employees, avoids delays, and also reduces costs.
• Flexibility/Autonomy: Gig economy allows people to work alongside the ever-changing job market. The gig economy allows people to work in various fields and fulfil the current needs in a variety of industries. In the times when people are equally valuing leisure and their work and are looking to avoid regular jobs being subordinate, the gigs provide autonomy and flexibility to both workers and businesses. Leveraging flexibility that a gig economy offers, workers can earn income from multiple and sometimes competing platforms.
• Easier to find: In any given situation, it is comparatively easier to find a gig than a regular job. It is an important source to immediately make a positive impact on one’s finances and tackle emergencies. Gig jobs can be one of the most effective options to look up to in such circumstances. Specially gigs like riding a taxi or food delivery, which have become very popular, have a lot more earning potential than other gigs.
• Great for small businesses: For small businesses which lack funding and have a limited budget, it is easier for them to hire freelancers or part-timers (gig workers) rather than a full-time employee as they can avoid the additional benefits they have to provide with the salary. Outsourcing tasks and jobs by embracing the gig economy would reduce costs, increases flexibility, and brings in new ideas and skills (quick).

Key Findings of NITI Aayog Report on Gig Economy:

• The study by NITI Aayog has estimated about 21.77 lakh workers in the gig economy in 2020–21. The gig workforce is expected to expand to 2.35 crores by 2029–30.
• At present, gig economy has about 31 per cent jobs in low-skilled jobs, 47 per cent in medium-skilled jobs, and 22 per cent in high-skilled jobs.
• There is a decline in the concentration of workers in medium skilled jobs whereas the share of low skilled and high skilled gig workers is increasing.

Recommendations proposed in the Report

1. Platform India initiative: Funding support, skill development, platformisation by simplication, handholding, and social financial inclusion can be included under the initiative to support the gig economy, similar to the Startup India initiative.
2. Skill Development: Platform-based models of skilling, job creation, and upskilling of workers need to be promoted. Certification can be provided through “skill certificates” or “skill passports” which would showcase their potential in the skill on the worker’s online profile, enabling better career progression for them.
3. Extending Social Security: Measures for paid sick leaves, health, and insurance may be adopted by the platforms as a part of their policy for all the worker they employ around the year. Retirement/pension plans, insurance, and other benefits may be implemented by uniquely designing plans and policies with the insurance companies, especially for gig workers.
4. Access to finance for platform workers: Access to institutional credit need to be enhanced for platform workers and those willing to set-up their own businesses, especially those established in small towns and villages. Special emphasis needs to be given on access to formal credit for women, persons with disabilities (PwDs).
5. Enhancing Social Inclusion: Platform businesses, in partnership with civil society organisations, should enable different sections of workers, including women and PwDs, to take up employment opportunities in the platform sector through skill development, access to finance.

India has a high potential for a gig economy. According to a report by assocham, India’s gig sector is expected to increase to US$ 455 billion by 2024. There could be a higher demand for blue and grey-collar workers. With companies, especially e-commerce and online business, opening up in smaller cities, the scope of employing gig workers in the country is high. According to an estimate, India is likely to have 350 million gig jobs by 2025. The expansion of the gig economy is beneficial for both workers and businesses. Hiring gig workers save costs, office space, and improves productivity for businesses. Workers can do multiple gigs based on their needs which gives them greater flexibility in choosing their work as well as working hours. There is a possibility of companies exploiting workers if there is no mechanism to monitor these companies. But the benefits can be captured only when recommendations for social security, financing, and social inclusion are rightly implemented by the companies hiring gig workers.

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