Gig Economy: A New Normal

Introduction 1 : Case Study

Consider the case of Priya, a freelance graphic designer based in Mumbai. Through the gig economy, she has been able to collaborate with clients from around the world, showcasing her creativity and building a diverse portfolio. As the gig economy continues to evolve, Priya’s story underscores the potential for individual empowerment and global connectivity. By harnessing the opportunities it offers, societies can foster a future where work transcends borders, talents are maximized, and inclusivity reigns.

Introduction 2 (Data):

In an era marked by technological advancements and shifting socio-economic dynamics, the emergence of the gig economy stands as a testament to the evolving nature of work. The gig economy, characterized by temporary, independent, and often remote work arrangements, has gained momentum over the past decade. Niti Aayon in its report “India’s Booming Gig and Platform Economy” estimates that around 7.7 million workers are engaged in the gig economy in India. This is expected to expand to 23.5 million workers by 2029-2030 forming 4.1% of the total livelihood in India.

As we delve deeper into the dynamics of the gig economy, it becomes apparent that its rise is driven by a confluence of economic factors, changing societal norms, and the aspirations of a new generation.

The term Gig Economy became popular around 2008-2009, however, the concept of creating an income from short-term tasks has been around for a very long time. Musicians, photographers, writers, truck drivers, tradespeople, and contractual agricultural and industrial labourers have traditionally been gig workers. In fact, the term “gig” is argued to come from the music industry. Unlike conventional jobs that offer stability and fixed hours, gig work allows individuals to take on multiple roles, often simultaneously, and choose their own working hours.

The push for the gig economy came during the financial crisis when swaths of the population faced the bleak future of unemployment and underemployment. Many workers picked up temporary engagements wherever they could. This phenomenon received another shot of boost during the Covid-19 pandemic. This helped people to remain employed as well as taking up part-time gigs allowed them to shore up their income.

Another interesting feature of the Gig economy is that it runs across the entire spectrum of pay scales. From senior executives such as independent management consultants, software developers, or the newly emerging crop of data scientists to delivery persons who make a little extra income by making Swiggy/Zomato deliveries or the uber/ola drivers. The Niti Aayog report shows that at present, about 47% of the gig work is in medium-skilled jobs, about 22% in high skilled, and about 31% in low-skilled jobs. The trend shows the concentration of workers in medium skills is gradually declining and that of the low skilled and high skilled is increasing.

Several factors have converged to give rise to the current expansive state of the gig economy. Firstly, this evolution has been fueled by advancements in technology, particularly the rise of digital platforms and app such as, Amazon Swiggy, Zomatao or Urban Company s that facilitate the seamless connection between service providers and consumers. From ride-hailing apps to freelance marketplaces, these platforms have transformed the way people access and provide services. In India, the availability of cheap and easy connectivity including 4G, cloud computing, GPS networks, and mass connectivity through affordable smartphones have been crucial enablers for the proliferation of the gig economy. Further, the positive attitudes and consumer preferences have acted as a springboard for this segment.

Second, the changes in the political economy over the years have also promoted contractual, project-based work. Economically, the increasing cost of labour and benefits has driven businesses to explore more cost-effective alternatives, leading to the growth of contract-based work. There is a desire for flexibility for/from workers. The platform, as well as other non-platform businesses, want short-term project-based labour as it’s easy to hire and fire them without getting caught up in any regulatory paperwork, especially in India where the labour laws are quite stringent. For the state, the rise of the gig economy has ensured that the unemployment levels remain checked.

Third, the growth of the Gig Economy is also reflective of the changing socio-cultural values and individuals’ outlook towards work. Earlier, work was considered a means to earn money and meet one’s needs. Economic security was the paramount factor to choose the nature of work.

Moreover, in earlier times in the traditional family setup, men were essentially the bread earners in a family who had to take care of their family on a single salary. This required a stable income to ensure economic security for the children. Thus, a secure nine-to-five job was socially glorified and accepted which provided the stability and safety required to run the family.

On the other hand, now the outlook towards work has changed. It is no longer just a means of gaining economic security rather it’s considered an extension of self. Work, now, is means of self-fulfillment and actualization. Therefore, factors like interests and passions have become key determinants in choosing one’s work. The desire to choose one’s working hours is tantamount to having greater control and say over one’s life and time.

Further, there has been a shift in the socio-cultural moorings. If earlier, stability, security, and certainty of the future were desired goals now, the current generation values freedoms, flexibility, and the excitement of uncertainty. Advancement in technology has ensured connectivity- physically and digitally and mobility. Moving away from the rootedness of the earlier generations, the new generation does not want to be anchored to one place or job as they are more open, in fact, welcoming to change – of places and jobs. This change is also supported by the transformation of the family structure. Now, both men and women are bread earners for the family, and the emergence of the nuclear family gives economic cushioning.

Thus, the changing socio-cultural norms have shifted the value placed on job security, prompting individuals to prioritize flexibility and work-life balance. The younger generation’s unique value system, marked by a desire for diverse experiences and self-expression, aligns well with the gig economy’s offerings.

The gig economy along with its myriad changes working in tandem with it presents a multitude of benefits for various segments of society. For the economy, it fosters innovation and competitiveness by allowing businesses to tap into a global pool of talent. Due to technological advancements, global outsourcing of work has become possible which ensures hiring globally at the most competitive costs. This is beneficial for India, which has the largest population, and thus provides opportunities for skilled employment to its demography.

Additionally, gig work provides economic opportunities for marginalized groups such as women, differently-abled individuals, and retirees, who can now participate in the workforce on their own terms. Earlier women had to withdraw from the workforce due to child-rearing and caring responsibilities. However, now the flexibility of working hours as well as physical place gives them an opportunity to continue their work. An example could be an interior designer who couldn’t continue with her work after childbirth. She started making informational videos on Instagram and now has a following of millions. This has helped her stay connected to her work as well as her clientele even when her physical mobility was restricted due to domestic responsibilities.

In a similar vein, differently abled and elderly have been able to showcase their skill sets digitally and get handsomely paid for them. A very famous example of this has been a 90 years old elderly lady in Chandigarh who started her own cloud kitchen and gets her food items delivered through Swiggy and Zomato.

Thus, the Gig Economy has also been a leveller on many accounts and this re-imagination of work has empowered many. Society benefits from the gig economy’s ability to bridge geographical boundaries, connect diverse cultures, and promote inclusion.

However, the gig economy is not without its challenges. Amid the growing gig economy, worker demands have come to the forefront. Freelancers and gig workers advocate for fair wages, access to benefits, and better working conditions. They highlight the need for greater transparency in algorithms that determine job assignments and wages on digital platforms.

Gig Economy also within its realm carries the stark realities of affluent freelancers at the higher end of the spectrum such as the software engineers reaping the rewards of flexible work arrangements while many platform workers struggle to make ends meet. This dichotomy fuels economic inequality and social injustice as the lower end of the spectrum lacks any opportunity for skill development or socio-economic mobility. The lower end of the jobs also comes with an age-related plateau as deliveries and driving can only be done till a certain age. The lack of traditional benefits like health insurance and retirement plans, coupled with uncertain income streams, exposes gig workers to financial vulnerability.

It can be seen that for most workers engaged at the lower end of the gig economy in unskilled work, it is often a compulsion rather than a choice. Young people are turning to platform-based gig work because of three reasons — stagnation of real wages and the rising cost of urban living; no comprehensive social security for unorganised workers and lack of dignified, decent, and secure work in urban areas. These intersecting vulnerabilities have forced (mostly young) people to work longer hours and perform multiple gigs, to survive, as they seek better, more regular employment.With a burgeoning population, it’s highlighting a failure to create quality employment by the state.

Looking at the social challenges of the gig economy, the gendered roles are all pervasive even in the gig economy where certain jobs are earmarked for men such as Uber/ola drivers, delivery partners, etc with women limited to care economy or beauty works reflecting the gendered organization of the job market.

The gig economy is also fuelling a certain degree of alienation and creating fissures in social cohesion and distance in social relationships. Earlier, when people had stable jobs and workplaces, they built work networks and relationships that had their own emotional value as well as functional utility. However, now in the era of digital and remote working these relationships are missing leading to isolated individuals who are bereft of any sense of belongingness.

The Swiggization of grocery shopping and buying everything online has led to people not visiting their local Kirana stores which earlier were a budding ground for people of any locality to come together and bond. Now, this has become a rare sight, especially with the new generation. A certain sense of alienation pervades our society with a palpable depletion of our social capital and the erosion of a sense of community.

To address these challenges and harness the potential of this sector, Niti Aayog has recommended accelerating access to finance through products specifically designed for platform workers, linking self-employed individuals engaged in the business of selling regional and rural cuisine, street food, etc., with platforms to enable them to sell their produce to wider markets in towns and cities. It further suggests platform-led transformational and outcome-based skilling, enhancing social inclusion through gender sensitization and accessibility awareness programmes for workers and their families and extending social security measures in partnership mode as envisaged in the Code on Social Security 2020. Other recommendations include undertaking a separate enumeration exercise to estimate the size of the gig and platform workforce and collecting information during official enumerations (Periodic Labour Force Survey) to identify gig workers.

To achieve all this a comprehensive legal framework is needed in the place. Currently, in India, the gig economy is governed by a patchwork of existing labour laws, which were designed for a different era of work. The recently proposed “Social Security Code on Gig Workers and Platform Workers” bill seeks to address some of these challenges by extending social security benefits to gig workers. It imposes an obligation on the gig employers such as ride-sharing services, food and grocery delivery services or other goods and services provider platforms to contribute 1-2% of their annual turnover into the Fund which may be used for carrying out the Schemes. 

Recently, Rajasthan state has passed The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023 proposes to set up a social security fund by imposing a welfare tax of 1%-2% on every transaction made by a customer on apps that fall within its ambit, like food delivery and ride-sharing. State government grants and contributions by gig workers will also be pooled into the fund.

It also aims to create an online database of gig workers in the state by registering them and the platforms they’re associated with; setting up a system to address their grievances and a welfare board to monitor and enforce rules and fine aggregator platforms that don’t comply. The new law provides a system for workers to organise themselves by giving them representation in the form of a welfare board. 

The passing of the law reflects a growing recognition of the need to adapt labour regulations to the gig economy’s unique dynamics. Striking a balance between flexibility and worker protection remains a pressing challenge. The law provides a roadmap for the creation of similar laws across states and for different jobs in the unorganised sector and begins the conversation on the subject.

Conclusion 1:

Thus Gig Economy has become the new normal where its normal for people to choose their work hours and work remotely with inbuilt flexibility. It is also normal that a lawyer by the day would be a painter by the night, thanks to gig economy. As the new generation redefines the meaning of work and how its associated with other larger aspects of life, gig economy has ushered in a new normal. To ensure that the trsnition is smooth, just and inclusive comprehensive legal framework needs to be put in place to ensure freedom and flexibility of work doesn’t transcend into financial vulnerabilities and exploitation.

Conclusion 2:

The gig economy’s trajectory will be defined by our ability to harness its benefits, mitigate its challenges, and cultivate an environment where the values of flexibility, equity, and social cohesion converge. In this new normal, adaptation and collaboration will be key, ensuring that the gig economy evolves into a sustainable and inclusive model of work for generations to come.