India has become the world’s most populated country this year. With a large share of the young population, the demographic dividend is yet to be capitalised. There is a large number of unemployed youth. There have always been small and informal jobs or part-time jobs which always exist in every economy including India. But, with rapid urbanisation, and technological revolution, the scope of gig workers and its spread has increased. Some of the industries where the model of gig work is extremely popular include transportation, logistics, professional services, health care, and creative services.
The gig economy also has a spillover effect on other sectors. It has created a multiplier effect due to the consumer surplus that arises due to lower prices. The gig economy provides employment opportunities to many unemployed young people in the country. Due to a lack of proper competition, many services were priced at high rates. After the arrival of competing platforms, prices were reduced, and are at an affordable rate. For example, the taxi and auto-rickshaws were very costly before the introduction of Uber, Ola, or Rapido.
Some of the world’s top gig economy companies are (1) Airbnb—for homeowners who look to monetise their property; (2) Amazon Flex—for licensed drivers who are interested in delivery services; (3) Cabify—for licensed drivers and owners of a vehicle; (4) Care.com—for certified caregivers as well as providers of home services; (5) Etsy—for professional artists and handicraftsmen; (6) Figure Eight—for professionals looking to make contributions in the field of artificial intelligence (AI) and machine learning (ML) projects; (7) Fiverr—for technology and media professionals; (8) Shipt—for personal shoppers who look for flexible schedules; (9) Talkspace—for licensed and experienced therapists and psychotherapy professionals; (10) Tongal—for media and entertainment experts; (11) Uber—for licensed drivers throughout the world; (12) Wag!—for dog lovers who want to turn their passion into source of income.
The Government of India defined the term ‘gig worker’ for the first time through the Code on Social Security, 2020. A gig worker is a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship. Gig work can be platform-based, whose work is based on online software apps, or digital platforms, or non-platform-based, such as casual wage workers, workers in conventional sectors who work part-time or full-time.
The job-creating potential of the gig economy is huge. But, at the same time, the workers are facing challenges concerning job security, skilling, opportunities, social security, working conditions, low wages, etc. In many cases of accident or violence, the platforms not only have refrained from supporting but also have deleted the databases of aggrieved workers. To suggest, streamline, and engage the gig workers, NITI Aayog released a first-of-its-kind report titled India’s Booming Gig and Platform Economy—Perspectives and Recommendations on the Future of Work in June 2022.
This report estimated that in 2020, there were around 7.7 million gig workers who are expected to expand to 23.5 million workers by 2029–30. The study also analysed the skill profile of the workers. There are higher numbers of medium-skilled workers than that of low- and high-skilled workers. However, gradually that is changing and the concentration of medium-skilled workers will reduce while the low- and high-skilled workers will increase. Low-skilled work includes cab driving, food delivery, etc.; medium-skilled work includes plumbing, beauty services, etc.; and high-skilled work includes jobs like graphic designing, teaching, software development, etc.
The demand for gig workers has been increasing in developed as well as developing countries. According to a report, titled Working without Borders: The Promise and Peril of Online Gig Work, in sub-Saharan Africa, job postings on the largest digital platform grew by 130 per cent, whereas in North America the growth rate is 14 per cent. Almost 60 per cent of firms in poor countries reported increased outsourcing to gig workers; in wealthier countries, less than half expressed the same.
The Vice President for Human Development, World Bank, Mamta Murthi says, “Online gig work could provide people in low- and middle-income countries and additional path out of poverty”.
To harness the potential of the gig-platform sector, the report recommends accelerating access to finance, linking self-employed persons with platforms like linking the business of selling regional and rural cuisine, street food, etc., with platforms that will help them have wider access to markets in different towns and cities. The report also suggests that for a platform-led transformational and outcome-based skilling, it is important to enhance social inclusion through gender sensitisation and accessibility awareness programmes for workers and their families, inclusive communication systems, and extending social security measures mentioned in ‘the Code on Social Security, 2020’.
With such a state of affairs in the country, favouring the unorganised sector, the government of Rajasthan passed a groundbreaking act, the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023. This is the first-ever legislation made regarding gig workers in India. The act protects and supports gig workers. Most of the platforms considered their workers as ‘partners’, rather than ‘employees’, especially in the delivery jobs. So, the act aims to extend social security and benefits to gig workers.
Some Key Features of the Act
- The workers must register with the state government to be brought under labour regulations and extend them the benefits.
- The aggregators and employers must also register with the government.
- The gig workers will be assigned a unique ID to track their employment history, and entitlements and also maintain their database.
- The workers will have access to health insurance, accident coverage, and other social security schemes.
- The act ensures grievance redressal, the right to be heard, and, provides them with a platform to resolve issues. For this purpose, a welfare board known as the ‘Rajasthan Platform Based Gig Workers Welfare Board’ will be constituted comprising ministers, officials, and representatives from gig workers having at least 1/3rd of nominated members as women.
- The board should also ensure that they set up a monitoring mechanism to review compliance with the provisions of the Act.
- There will be a welfare fund fee that is required to be paid by the aggregators for each transaction involving a platform-based good gig worker which will be used to contribute to gig workers during challenging times.
- Aggregators have to comply with the board regarding updating the board about any changes in the number of gig workers, or the data provided and also deposit the welfare cess by the fifth day of each month.
- The board will create a web portal and update the details of the aggregators and employers of the gig workers on this portal.
Benefits of the Act
Some of the benefits of this act are as follows:
- This Act acts as a predecessor to many acts that are yet to be implemented in the country. It is the right step ahead and the first of its kind.
- The welfare board that will be constituted can take care of the implementation, as well as monitor the complaints. The formalisation and building of a database of gig workers will help another section of the population to be brought under the organised sector which not only helps the workers to avail benefits but also the government to bring them under a tax bracket.
- The compliance mechanism of the board will make sure that the concerned parties will be responsible and accountable. The non-compliance will also lead to fines.
- This act, not only identifies the issues of the gig workers but also provides a framework for the welfare mechanism and the structure to solve the grievances and address their social security issues.
Some Concerns
We have seen the possible benefits and uses of the Act. However, there are concerns about the platforms or aggregators transferring the burden of cess or fee to the employees which will reduce their income. As mentioned above, with the emergence of the gig economy, services are priced lower. Due to this, many companies are exploiting the workers and are not providing them with a basic minimum wage leaving aside other benefits. Not only the insurance or the welfare fund, the board should also make regulations about the minimum wages, working conditions, working hours, transparency in hiring and firing, etc. Due to the platform-based work, many workers are forced to maintain good ratings to survive. The workers have to maintain optimal ratings to get further work and to get paid well. Many times, the workers also resort to forcing the consumer to give a good rating. Due to the large multitude and huge capacity of the gig economy in the future, the Board should have a holistic approach and cover all aspects and concerns.
After Rajasthan, the Government of Karnataka announced an insurance scheme with a coverage of Rs 4 lakh for gig workers and the premium will be entirely taken care of by the government. They will get a 2-lakh life insurance cover and an accidental cover of Rs 2 lakh. It has also announced a seed fund of Rs 3,000 crore for the same and proposed a ‘Gig Workers Welfare Board’ after coming to power.
Conclusion
With the coming-age developments and evolving job prospects, the provision of skill sets both as a part of education as well as extra educational skilling should also evolve. The market for providing required skills or upgrading existing skills can be capitalised. Or the platforms can collaborate with the Ministry of Skill Development to provide and nurture skilled and unskilled workers. The agencies of the ministry can provide a skill certificate to enable the employers to easily identify skilled personnel as well as provide the workers with an identity.
Despite the concerns and scope for further improvements, the move of the Rajasthan government has to be appreciated for taking a step ahead in protecting the gig and platform workers. Lessons of success and failure from already existing laws and acts in India as well as other countries should be taken into consideration for further developments.
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