GIG
ECONOMY - ECONOMY
News:
Explained | Rajasthan’s
draft Bill for gig workers
What's
in the news?
● The
Rajasthan government recently released the draft Rajasthan Platform Based Gig
Workers (Registration and Welfare) Bill, 2023 — the first legislation of its
kind in India outlining social security and welfare measures — and invited
feedback from stakeholders, including the State’s approximately three lakh gig
workers, till July 7.
Gig
workers:
● Gig
workers are those engaged in livelihood
outside the traditional employer-employee arrangement.
● Gig
workers can be broadly classified into platform and non-platform-based workers.
○ Platform workers
are those whose work is based on online software apps or digital platforms.
○ Non-platform gig workers
are generally casual wage workers and own-account workers in the conventional
sectors, working part-time or full time.
● Gig
workers are typically hired by companies on a contractual basis and are not considered their employees.
● As
a result, they do not receive some of the benefits that an on-roll employee of
the company may have, such as they often do
not receive benefits like paid sick and casual leaves, travel and housing
allowances, and provident fund savings, among other things.
How
big is the workforce engaged in the gig economy?
● Niti
Aayog estimates that more than 7.5
million workers were engaged in the gig economy in 2020-21. This could grow
to 23.5 million workers in the next eight years, making up for 4.1 per cent of
total livelihood in India.
● According
to the report, at present, about 47 percent of the gig work is in medium
skilled jobs, about 22 percent in high skilled, and about 31 percent in low
skilled jobs.
Reasons
for worker's preference for Gig economy:
● One
can work on freelancing as well as work full-time somewhere else. Hence it is profitable to the worker as he can hit two
targets together and multitask.
● It
is very beneficial for women who
work on this concept when they cannot continue their work or take a break from
career due to marriage or child birth.
● Retired people can stay active after
retirement as this will keep them engaged away from loneliness
and depression and can earn as well on their own rather than depending on their
children or pensions.
● It
offers flexibility and diversity to the
workers. It offers flexibility when workers can work according to their
convenience and schedule rather than routine like in full-time jobs.
● The
travel costs and energy to travel to the workplace is reduced.
Advantages
of Gig economy:
1.
Benefits to Gig Workers:
● Gig
workers have the flexibility to work according to their convenience and
availability. There are less restrictions related to fixed work-hours,
attendance etc.
● Workers
have some flexibility in choosing their work hours. Some workers take gig jobs
on a part-time basis to supplement their income from regular jobs.
2.
Cost Efficiencies for Companies:
● The
companies are able to save costs on hiring full time employees. They are able
to provide services more economically to the users.
3.
Jobs for Low-skilled workers: Gig economy provides
jobs to many low and semi-skilled workforce with minimum conditions.
4.
Gain Experience: It enables the young undergraduates to
gather valuable work-experience before joining formal employment.
5.
Economical: Many gig workers work remotely and save
costs (e.g., on office commute).
Concerns
of Gig Economy:
While platform companies have created avenues of employment, it has
often been marred by low wages, unequal
gender participation, and a lack of possibility for upward mobility within an
organisation. This has triggered protests from workers at companies like
Swiggy, Zomato, Ola, Uber, and Urban Company, among others.
1.
Job Security:
● Most
gig workers work on a day-to-day basis, and can be terminated from their jobs
without any notice.
● Many
gig workers were laid off during the pandemic.
2.
Lack of Benefits:
● Gig
workers have no social security benefits like ESI, PF or insurance. They have
no paid leaves so failure to work means loss of wage.
● Gig/Platform
workers are not covered in all the labour codes, specifically the ‘Code on
Wages, 2019’ which prescribes minimum wages for various jobs. There is no wage
regulation and the workers are at the mercy of aggregators.
3.
Work Conditions:
● Most
workers have to put in long hours of work in order to make the job viable.
● A
large components of worker's wages consists of incentive which coerces workers
to work for long hours. This reduces the advantage of ‘flexible work’ in gig
economy. There is lack of transparency on incentive structures.
4.
Hidden Charges:
● Many
aggregators/platforms are burning cash by giving large discounts to users in
order to capture larger market share.
● Companies
try to sustain this by charging high commissions on gig workers.
5.
Low Bargaining Power:
● Platform
workers have little or no voice. Technology has tilted the power and bargaining
scales strongly in favour of the platform companies.
6. Platforms have multiple
other issues like
● Frequent
and random changes to the commission structure.
● Delays
in payments.
● Deliberate
miscommunication of earnings potential to attract gig workers.
● Lack
of access to basic amenities.
What
are Niti Aayog’s recommendations for the gig economy?
The NITI
Aayog Report, ‘India’s Booming Gig and Platform Economy has analysed the gig
economy from gig worker's perspective and has made several recommendations.
1.
Fiscal incentives:
● Provisions
of fiscal incentives such as tax-breaks or startup grants may be provided for
businesses that provide livelihood opportunities where women constitute a
substantial portion (say, 30 percent) of their workers.
● Likewise,
a platform with high accessibility or high degree of participation of PwDs too
may be rewarded with fiscal incentives.
2.
Gender Inclusion:
● Apart
from incentivising platforms that focus on recruiting women workers, the report
recommended that businesses have a higher share of women managers and
supervisors in the organisation to ensure that communication to workers does
not perpetuate gender stereotypes.
3.
Social security:
● The
report also recommended firms adopt policies that offer old age or retirement
plans and benefits, and other insurance cover for contingencies such as injury
arising from work that may lead to loss of employment and income.
● A
social security cover out of a corpus fund can also help gig workers in case of
contingencies.
● The
report also recommended extending social security measures such as income
support, paid sick leaves, insurance and pension plans to people working for
platform companies like Swiggy, Zomato, Ola, and Uber.
4.
Income support:
● The
report marked the importance of providing income support to workers as it would
be a critical step in providing assured minimum earnings and social security
from income loss in the wake of uncertainty or irregularity in work.
5.
Platformization:
● A
Platform India Initiative can be launched on the lines of Start-up India. The
purpose would be to increase access to the platforms.
● This
can be achieved by simplification and handholding, funding support and
incentives, skill development, and social financial inclusion. The horizon of
platforms can be broadened e.g., Self-employed individuals engaged in the
business of selling regional and rural cuisine, street food, etc. may be linked
to platforms.
6.
Skill Development for Workers:
● Platform-led
models of skilling and job creation need to be promoted for the gig and
platform sector. Platforms can collaborate with the Ministry of Skill
Development and Entrepreneurship, and the National Skill Development
Corporation (NSDC) to nurture skilled workers and micro-entrepreneurship.
● Transformational
upskilling for workers presently engaged in the informal sector in trades such
as construction, driving and other services can be undertaken. This will create
avenues for horizontal and vertical mobility for workers to take up jobs in the
gig and platform sector, empowering them to augment their earnings.