A study by Fairwork India, which scored 11 top aggregators on a scale of 10 on fair wages, fair contracts, fair working conditions, fair representation, found most of them “not committed” to ensuring a living wage to their workers (who some of them refer to as partners), and none scoring beyond 6.

The platforms studied were Amazon Flex, Bigbasket, BluSmart, Flipkart, Ola, Porter, Swiggy, Uber, Urban Company, Zepto and Zomato.

The report found that only Bigbasket and Urban Company have a minimum wage policy that guarantees hourly local minimum wage after factoring in work-related costs.

What’s more, none of these platforms were willing to recognise the workers’ right to collectively bargain or unionise, which is a “vital dimension of fairness at work”.

The report said it found it “disconcerting that despite the rise in platform worker collectivisation across the country over the past six years, there was insufficient evidence from any platform to show a willingness to recognise a collective body of workers.”

The report, Fairwork India Ratings 2024: Labour Standards in the Platform Economy, was written by researchers from the Centre for IT and Public Policy, International Institute of Information Technology Bangalore (IIIT-B), and the Oxford Internet Institute, University of Oxford.

The report evaluated the conditions of work across 11 platforms in India at location-based services in sectors, such as domestic and personal care, logistics, food delivery, and transportation.

“Each company was awarded a score out of 10 according to the Fairwork Principles: fair pay, fair conditions, fair contracts, fair management and fair representation. Each score was determined based on a combination of desk research, worker interviews conducted in Bengaluru, Chennai, Delhi, Kochi, Thiruvananthapuram, and-when possible-evidence provided by the platforms,” said the report.

“This year witnessed gig workers’ welfare increasingly gain attention in political manifestos and legislative initiatives. But with the implementation of these efforts remaining uncertain, and platforms redefining gig work, research and advocacy to improve the conditions of gig workers are ever more relevant,” said Professors Balaji Parthasarathy and Janaki Srinivasan, the principal investigators of the team, in a statement.

Among the key findings on ‘fair pay’, the report found that only Bigbasket and Urban Company provided evidence of a “minimum wage” policy.

“No platform was able to evidence that all of their workers earn the local living wage after costs, so none were awarded the second point for Fair Pay,” said the report.

On ‘fair working conditions’, the study found that Amazon Flex, Bigbasket, BluSmart, Swiggy, Urban Company, Zepto and Zomato were able to prove that they provide adequate safety equipment and periodic safety training to workers on their platforms.

Amid a job that is prone to road mishaps, “only Bigbasket, Swiggy, Urban Company, Zepto and Zomato evidenced that their companies provide workers with accident insurance coverage at no additional cost, monetary compensation for income loss in cases they are unable to work for medical reasons other than accidents, and ensuring a worker’s standing is not negatively affected when they return after a break taken with prior notice to the platform.”

As for “fair” work contracts, six out the 11 —  Bigbasket,
BluSmart, Swiggy, Urban Company, Zepto, and Zomato — provided evidence that they ensure “the accessibility and comprehensibility of their contracts, and have protocols for the protection and management of worker data.”

“Bigbasket, BluSmart, Swiggy, Zepto, and Zomato, also evidenced the adoption of a change notification clause in their contracts, reducing asymmetries in liability (such as by a provision to compensate workers for losses due to app malfunctions and outages), the adoption of a Code of Conduct for their subcontractors, and making the variables influencing pricing transparent where dynamic pricing is used,” the report said.

As regards ‘fair management”, Amazon Flex, Bigbasket, BluSmart, Flipkart, Swiggy, Urban Company and Zomato were awarded the “first point” for evidencing due process in decisions affecting workers and channels for workers to appeal disciplinary actions.

“There was sufficient evidence from BluSmart, Swiggy, Urban Company and Zomato of regular external audits to check for biases in their work allocation systems, in addition to policies against discrimination,” the report said.

When it comes to the right to collectively bargain or unionise, a “vital dimension of fairness at work”, the report found it “disconcerting that despite the rise in platform worker
collectivisation across the country over the past six years, there was insufficient evidence from any platform to show a willingness to recognise a collective body of workers.”

Fairwork is an international research project that studies the working conditions of platform workers in more than 30 countries in Asia, Africa, Europe, North America and South America. The work is coordinated by Oxford Internet Institute and the Social Science Research Centre Berlin.

Courtesy: Newsclick

The post Only 2 Out of 11 Ecommerce Platforms Have Minimum Wage Policy for Gig Workers, Finds Report appeared first on SabrangIndia.

Only one state has an act for gig workers—Rajasthan—as of now, and if this draft becomes law, Karnataka would be the second state to enact a law for gig workers’ welfare. Notably, the Indian National Congress (INC) was the ruling party in Rajasthan, as it is now in Karnataka when the act was passed in the legislative assembly. Telangana, another state in which a gig worker draft law has been on the cards, is also a Congress-ruled state. However, Telangana’s law is not publicly accessible yet, and information on it was reported by sections of the media.

A few common threads

Generally, all state governments, as of now, seem to be following a set structure in terms of the welfare of gig workers.

One, in the definitions, they define:  

i) Aggregators to include major players like Swiggy, Zomato, etc., and smaller players like, say, Shoffer—a luxury electric car ride-hailing service based out of Bangalore.  

ii) Gig workers to include the delivery or ride partners or other such people registered on these platforms for work.

Two, they constitute a board to oversee the welfare of workers and ensure the implementation of the act.

Three, they establish a welfare fund to which the aggregators will be made to pay a certain amount per transaction per worker or some other mechanism.

Four, they outline the rights of the workers and the responsibilities of the aggregators, along with stating the penalties for violations.

While all these elements are present in the Karnataka Gig Worker law draft, it is important to understand the changing contours of employment relations in the gig economy year by year, along with the growing trend of gig work, when drafting the provisions of the law. For example, food delivery workers wear uniforms of the brand they are working with, as mandated, thus providing free marketing to the brand as they ride through the city. This is not factored into the pay given to them, and in fact, the uniforms are supposed to be bought from the brand by the workers themselves. These types of disguised employment conditions are not considered by the government while it defines the relationship between aggregators and workers.

In this context, this article will discuss the Karnataka Gig Worker law, its similarities and differences with the Rajasthan Gig Workers law, and the potential for improvement in the legislation on Gig Worker Welfare.

Draft Karnataka-based Gig Workers (Social Security and Welfare) Bill, 2024

The draft bill defines an aggregator as a digital intermediary for a buyer of goods or user of services to connect with the seller or the service provider, and includes any entity that coordinates with one or more aggregators to provide the services. Essentially, a food delivery app like Swiggy, or an app that facilitates the hiring of electricians or beauticians like Urban Company, comes under the definition.

Section 2(e) of the Act defines gig workers as a person who performs work or participates in a work arrangement that results in payment based on terms and conditions laid down in such a contract. This includes all piece-rate work, and whose work is sourced through a platform, in the services listed in Schedule-I.

The Schedule includes the following services:

1.   Ride Sharing Services  
2.   Food and Grocery Delivery Services  
3.   Logistics Services  
4.   E-Marketplace for wholesale/retail sale of goods and/or services—B2B/B2C  
5.   Professional Service Providers  
6.   Healthcare  
7.   Travel and Hospitality  
8.   Content and Media Services

The draft bill has provisions for the rights of the gig worker in Section 6, granting them the right to register with the Gig Workers Welfare Board—established under Section 3—and the right to access general and specific social security schemes, as well as the right to access a grievance redressal mechanism (Section 7). This Grievance Redressal Mechanism involves either a complaint to the state government-appointed officer or a petition through a web portal whose link should be provided on the aggregator’s website.

The draft also outlines several responsibilities for aggregators:

1. Aggregators must provide a database of workers to the board and update it (Section 10).  
2. Aggregators must register themselves (Section 11).  

3. Aggregators must ensure that the contract is fair, easily understandable in a language comprehensible to the worker and listed in the 8th Schedule of the Indian Constitution. Any change in the contract should occur with prior notice, and termination of the contract by the worker on account of the change should not affect the entitlements they were supposed to receive. 

4. Aggregators must communicate to the gig worker the parameters of allocation, distribution, assessment, and grounds for denial of work, as well as the parameters of the rating system and categorization of the workers on the quality of service, log-in time, etc. if such categorization is done by the employer (Section 14).

5. Aggregators cannot terminate the gig worker without prior notice of 14 days, and the contract must have an exhaustive list of grounds for termination or deactivation from the platform (Section 15).

6. Aggregators must pay workers weekly without delay (Section 16).

7. Aggregators must ensure reasonably safe and healthy working conditions, as practicable as possible (Section 17).  

8. Aggregators must ensure that a grievance link is available on their website and constitute an internal dispute resolution committee if they have more than 50 workers. These disputes include failure to adhere to the responsibilities mentioned above (Section 24). 

9. Aggregators must appoint a human point of contact for queries, with workers having the option to communicate in Kannada, English, or any 8th Schedule language known to them.

The draft also proposes the establishment of a welfare fund, to be funded by the aggregators at a percentage of the pay of platform-based gig workers per transaction or based on annual state-specific turnover, as may be notified by the government. For this purpose, the draft proposes a Central Transaction Information Management System where all transactions are mapped and monitored by the Board to ensure that payments made to workers and deducted fees are recorded and accounted for. Penalties range from Rs. 5,000 to Rs. 1, 00,000 and are compoundable unless the offense has been committed on more than three occasions.

It was also reported in the media that the government and aggregators agreed on levying a cess per transaction rather than based on state-specific turnover.

Similarities and differences with the Rajasthan Act

Both laws establish a board, give similar powers to the gig worker welfare board, and establish Central Monitoring Systems. In essence, both laws grant the same rights to workers, impose the same responsibilities on aggregators, and establish welfare funds.

However, the difference lies in the details of these broad structures. For example, the Rajasthan Act explicitly recognises the right of workers to participate in all decisions taken for their welfare through representation on the board. In constituting the board, the Rajasthan Act mandates that one-third of the members shall be women. The Karnataka draft misses these provisions and does not have as many members on the board. The Rajasthan law includes 12 board members, including the in-charge minister, while the Karnataka draft includes 10 members, with five being ex-officio members from various departments.

The Karnataka Act also emphasises transparency and the need for communication in languages understandable by the worker. By making it mandatory for the aggregator to provide details of the rating system or categorization of gig workers based on the quality of service rendered, log-in time, or other criteria, the draft attempts to lift the veil under which aggregators have operated until now.

Other key differences can be found in the welfare fee and penalty sections. The draft Karnataka law chooses an either-or approach, where the welfare fee could either be a percentage of each transaction or a percentage of the state-specific annual turnover. The Rajasthan Act does not mention turnover. In terms of penalties, Rajasthan’s law imposes penalties ranging from Rs. 5 lakh to Rs. 50 lakh. The Rajasthan Act also has provisions for interest payable on delayed payment of the welfare fee.

Potential for development

There is much room for development in the Karnataka draft law. While the fundamental question of defining the relationship between the gig worker and aggregator has not been answered, the draft leaves many concerns in the areas it chooses to operate in.

For example, it does not consider women in the gig workforce, nor does it enact specific provisions to protect their interests, such as maternity-specific provisions where women do not have to lose their categorization within the platform if they take a maternity break.

The bill has already been reportedly opposed by various companies due to concerns about compliance, with claims that it will hurt the ease of doing business in the state. While these concerns are expected, the sheer volume of compliance measures businesses must adhere to under the act raises doubts about its effective implementation. Meanwhile, Kerala’s Minister for Labour, V. Sivankutty, stated in August that the government intend to introduce the Kerala State Platform-Based Gig Workers (Registration and Welfare) Bill, 2024 in the assembly session this October.

In this paradigm, where the government seems to have decided not to accord the status of a worker to the gig worker and the status of an employee to the aggregator, the least it could have done is to provide for the increased bargaining power of the worker. This could have been achieved through the official recognition of unions in the gig economy, allowing bargaining to be done with unions or federations of such unions.

Conclusion

Despite the improvements in the Karnataka draft law, the fundamental question and demand remain unheeded. With the control aggregators usually exert on gig workers, the demand has been that gig workers be recognized as employees. With the BJP in Rajasthan not giving importance to the previously enacted gig worker law, and Congress governments consistently defining the relationship between gig workers and aggregators as independent individuals rather than employees, the future possibilities look narrower. 

Such a law should not be a choice between no protection at all and meagre protection for gig workers.

(The writer is a researcher with the organisation)

Related:

Rajasthan’s Gig Worker Law, a step towards industrial democracy

Karnataka Budget 2023-24: CM announces Rs. 4 lakh life & accident insurance policy for gig workers

Report Highlights Poor Working Conditions for Gig Workers; Uber, Ola, Amazon Score Zero

Report Highlights Poor Working Conditions for Gig Workers; Uber, Ola, Amazon Score Zero

India’s Gig Workers: Overworked And Underpaid

The post Karnataka’s draft law for welfare of gig workers, an insufficient tokenism? appeared first on SabrangIndia.

Introduced in 2023, this system ranks delivery riders based on a point system, where a “perfect order” earns one point. Maintaining a gold status requires earning 70 points or more weekly, while falling below 50 points moves a rider to the bronze category. Despite Swiggy’s defense that all delivery partners receive basic insurance benefits such as accidental coverage and free ambulance services, many riders find the system unpredictable and are considering purchasing their insurance independently.

Why are gig work-based platforms not providing a blanket General Health Insurance—at least to individuals if not for families?

Swiggy’s stance on health insurance for its delivery agents exemplifies the broader challenges faced by workers in the gig economy. The company’s dynamic rating system, linking insurance benefits to performance metrics, introduces significant uncertainties and risks for its workforce. This system, while ostensibly offering benefits based on engagement levels, can penalize workers for situations beyond their control, such as personal emergencies or unforeseen circumstances. The gamification of gig work, as seen in Swiggy’s dynamic insurance plan, can lead to dystopian outcomes. By turning essential benefits into rewards and tying them to performance metrics, companies create a competitive environment that can push workers to their limits or actually make it miserable for them by not giving them the insurance when they need it the most. This approach can lead to overwork, stress, and even health issues, as workers strive to maintain their ratings and secure their benefits.

While Swiggy emphasises that all delivery partners receive some level of insurance coverage, the reality is that this coverage is tied to maintaining a high rating, which can be challenging in a job with unpredictable variables like traffic, customer moods, or health issues. The only insurance they get, irrespective of these variables, is the Swiggy Accident-related insurance. According to a 2022 post from Swiggy on its blog, this accident insurance seems to be active when the worker is delivering something on the platform. While it is normal for an employer to give its employee accidental insurance when the employee is always on the move, given that Swiggy is a gig work platform, it seems to have settled for the bare minimum expected of it.

The gig economy, by its nature, promotes flexibility and independence, but these benefits often come at the expense of workers’ rights and protections. Companies like Swiggy leverage this flexibility to implement performance-based incentives that may inadvertently contribute to a culture of overwork and stress among their workforces.

This system operates under a veil of flexibility and independence, but it obscures the inherent instability and insecurity faced by gig workers. The false promise of flexibility often masks the precarious nature of gig work, where workers are subject to the whims of algorithms and customer ratings.

Moreover, the opaqueness of these systems further exacerbates the problem. Policies and rating systems are often not transparent, leaving workers in the dark about the rules that govern their work and their livelihoods. This lack of transparency can lead to feelings of powerlessness and frustration among workers. For example, Swiggy, in its communique, states that since the workforce on Swiggy varies day by day, where some people disappear from being on the platform for weeks, it becomes difficult to give insurance. However, no one except Swiggy knows what percentage of Swiggy delivery fleet have not logged in for weeks, and who have been working on the platform for a while and have taken a break for a week. This opacity allows

What can the governments do?

Governments can take up the issue with platforms and nudge them to give better health insurance benefits rather than just accident insurance which is the bare minimum.

Rajasthan and Karnataka have become pioneers in providing social security and insurance benefits to gig workers. The Rajasthan Platform Based Gig Workers (Registration and Welfare) Bill 2023, recently passed by the Rajasthan Assembly, establishes a welfare board and a social security fund for gig workers. A tax on digital platform transactions will fund these schemes, providing benefits like accident insurance, health coverage, maternity benefits, pension contributions, and scholarships.

Similarly, Karnataka announced free life and accidental insurance worth Rs 4 lakh for gig workers, covering employees in e-commerce companies like Swiggy and Zomato. These initiatives mark a significant step towards protecting and supporting gig workers who were previously lacking adequate social security and regulatory frameworks.

This is not a national phenomenon, and Karnataka and Rajasthan cover a very small part of the total gig worker ecosystem. The situation in the gig economy calls for urgent attention and action. As the gig economy continues to grow, it is imperative that governments, companies, and society at large work together to ensure a more sustainable and equitable future for all workers. This includes providing adequate support and protection to workers, promoting transparency in policies, and ensuring that the benefits of the gig economy are accrued to whoever runs the platforms and the workers suffer because no one stood for them. And finally, it is important to reorganize collective thinking about the status of gig work in the country—especially with respect to ride-hailing, food delivery, and home services app. The non-existence of managers and flexibility to work when workers want should not take away the fact that there is significant control of the platform on the worker. As India moves towards fixed-term employments—which are gig works but for more than a few weeks/months—it becomes important to think whether we want the uncertainty of gig work to creep into the organized sector or for the greater certainty and social security of the organized sector to move into the gig economy.

(The author is part of the organisation’s legal research team)

Related:

Rajasthan’s Gig Worker Law, a step towards industrial democracy

Karnataka Budget 2023-24: CM announces Rs. 4 lakh life & accident insurance policy for gig workers

Report Highlights Poor Working Conditions for Gig Workers; Uber, Ola, Amazon Score Zero

The post Swiggy’s tiered insurance scheme for delivery fleet & the inherent nature of the Gig economy appeared first on SabrangIndia.

Throughout economic history, the exploitation and participation of labour have been a significant topic. From slavery to the rise of the platform economy, this narrative has evolved through social, political, and technological changes. To fully understand the complexities of labour within the platform economy, we use a storytelling approach that takes us through time and explains the economic models that shape modern labour dynamics. This approach allows us to appreciate the rich history of labour struggle and progress.

Through storytelling, we can trace the evolution of labour practices and establish connections between historical events and present-day challenges in the digital age. By leveraging the power of narrative, we can delve into the painful realities of slavery and the deceptive allure of indentured labour. Furthermore, we can embark on a journey of discovery to explore the transformative phase of the workers’ movement, where collective action and collaboration led to significant strides in improving workers’ rights, ultimately shaping our contemporary understanding of just and equitable employment.

The tale does not end with history but ushers us into the latest chapter of the platform economy, where a new labour model unfolds. Here, we encounter the paradoxes of maximising profit by balancing supplier utilisation, shedding light on how digital platforms navigate the delicate dance of maintaining customer satisfaction and supplier retention.

Using the power of storytelling, we delve into the complexities of human experiences and highlight the moral dilemmas and economic consequences of prioritising profit over people. Our narrative also examines the importance of regulations and labour protections in creating a fair and just future for workers in the constantly-evolving platform economy.

By blending storytelling with mathematical models, this academic essay comprehensively analyses labour exploitation and participation throughout history and the modern day. This approach enables us to bring economic theory to life through real-world scenarios, providing data-driven insights into the human experience. Ultimately, this exploration of storytelling sheds light on the challenges faced by workers, policymakers, and businesses and encourages constructive dialogue about creating a more equitable and sustainable future for the labour force in the dynamic platform economy.

Story 1 — Slavery

As a prominent sugarcane plantation owner, I’m fixated on maximising my profits.

I am the proud owner of rich, fertile land and have all the resources needed for cultivation, but I need help with the apprehension of high labour costs. To combat this, I devise a strategy that, while effective, is inhumane.

I travel to remote places on a different continent, convincing or, instead, capturing unsuspecting individuals to come to work on my plantation. I bring them to my fields, offering them just enough sustenance to keep them alive. Wages, however, are a luxury I do not provide. Day in and day out, they toil under the relentless sun, their existence reduced to an endless cycle of hard labour. In this plantation, I’m not just the owner but also the master of these unfortunate souls. And they are not workers but rather slaves, subjected to harsh conditions to keep my costs low and profits high.

Story 2 -Indentured labour.

After a wave of global criticism and tightening legal constraints, I am forced to abandon my earlier practice of forced labour. This time, my gaze turns to a distant land where people live in abject poverty and are desperate for change. I realise we have a military base and colonised that region, so we impose our rules. It needs to be different from slavery; it has been banned.

I provide individuals with a hopeful solution through contracts, which are legal documents that ensure payment and the ability to depart at any time. This arrangement is equitable as they have a formal agreement, can reside with their loved ones, and are not restricted or physically restrained as previously experienced.

But the underbelly of this system is still rife with exploitation. Their work hours are gruelling, stretching long into the night, and the pay I offer is barely enough to sustain their livelihoods. And though the contract suggests they are free to leave, the reality is far from this ideal. They are a different country, and they are no way they can travel back to their origin country. Debts pile up, legal constraints tie them down, and a lack of other job opportunities leaves them virtually shackled to their roles. The cycle of poverty and labour exploitation continues, disguised under the veneer of legality and choice.

The first example illustrates a form of what we now call Chattel slavery. In this system, individuals are treated as the property of others, who can buy, sell, and rent them as they please. Slaves have no rights and are forced to work under conditions determined by their owners. They receive no payment beyond the bare minimum necessary to keep them alive and able to work. Chattel slavery has been practised in many societies throughout history and was notably prevalent in the Americas from the 16th to the 19th centuries.

The second example illustrates a form of Indentured labour. Here, individuals sign a contract, or “indenture,” agreeing to work for a certain period in exchange for something, often passage to a new country. However, their work conditions are often extremely harsh, and their wages are minimal. They technically have the right to leave, but this is often not a realistic option due to debt, legal restrictions, or a lack of alternative opportunities. Indentured labour was also common, particularly in the 17th to early 19th centuries and in other parts of the world at various times.

Story 3—Industrialization and Organized Labour

As we continue exploring through time, we reach the third phase, witnessing a significant change in the social and economic landscape. This change is brought about by the emergence of industrialisation, which profoundly impacts production systems and alters labour dynamics.

The emergence of the workers’ movement brought about a profound transformation in employment dynamics. Workers, once solitary entities in the industrial landscape, began to realise the power of unity and the benefits of collective action. As a result, they formed associations based on shared experiences and aspirations, heralding a new era in labour relations.

This movement had far-reaching implications for workers’ rights. Employees were legally empowered to organise and strike for the first time, giving them greater bargaining power in their interactions with employers. These changes also had a ripple effect on the legislative framework, leading to the enactment of laws that protected children from labour and established minimum wage requirements and workplace safety regulations.

The workers’ movement’s persistent efforts resulted in significant improvements in compensation and benefits for workers. Health insurance, pensions, job security, and protection against discrimination — once merely aspirational — became standard features of employment contracts. These advancements profoundly impacted workers’ living conditions and significantly promoted social equality.

However, the workers’ movement faced opposition from some quarters who viewed it as hindering economic growth and industrialisation. This was primarily due to its unwavering commitment to protecting workers’ rights, which often translated into increased operational costs for employers.

Nevertheless, it is crucial to acknowledge that these perceived setbacks are a testament to the movement’s unwavering focus on fair wages and curbing exploitation. While this may impact short-term profits, it undoubtedly fosters long-term social justice.

The workers’ movement is a defining chapter in labour history, underscoring the immense power of collective action in securing workers’ rights. Its enduring legacy continues to influence contemporary labour practices and is a crucial reminder that worker welfare and industrial growth are not mutually exclusive. Despite facing resistance and criticism, the movement remains a beacon of social justice, tirelessly advocating for workers’ rights worldwide.

Story 4 — Platform Labour

A new labour model surfaces in this most recent chapter of our journey. As the entrepreneur of this bold new venture, I find myself approaching a potential worker, a character who has accompanied me through the harsh realities of our past narratives.

With a welcoming smile, I begin,

“Welcome to my latest enterprise. This time, I have a rather unconventional proposition for you. You might recall our previous engagements — when I was a slave owner, a landowner employing indentured labourers, or a factory owner. The common thread through those chapters was maximizing your labour while minimizing your compensation. It might have been ruthless, perhaps unethical, but it was a strategic decision to drive down all costs, labour being a significant one, to maximize my profits. In this new venture, the dynamics are set to shift. When you join my firm, you’ll have the freedom to work as you wish, and you’ll be compensated for your efforts. However, there is a catch: I only require your services on certain occasions. It may seem unusual, but having you work full-time would harm my profits in this innovative business model. If you work constantly, I’ll lose money and be less profitable”

“Understandably, you might be puzzled. It’s simple to grasp that less work from you implies lower costs for me. But the notion of you working less — your lower utilisation — leading to higher revenue for me might sound paradoxical.”

With a look of profound confusion etched on his face, the worker responds,

“That does indeed sound strange. How do my partial employment and idle time lead to your increased profits? I can understand the reduced costs as you’re not paying me full-time. But the concept of higher revenue due to my lower work hours defies conventional wisdom.”

I can’t help but smile. This is a new game where I’ve upended the traditional business model, challenging age-old norms of labour utilisation for profit. The stage is now set for me to unravel this economic conundrum, perhaps shattering long-held beliefs of labour exploitation for profit. The next act promises to explore this new economic reality profoundly.

Why do you look surprised? This model already exists.

Let’s examine an instance from the digital economy — a ride-hailing service that operates through a mobile app like Uber or Lyft. As the founder and owner of this business, I am briefing my driver — who also happens to be my “employee” — about a peculiar situation.

As a driver for my rideshare company, you can choose your own working hours. Simply log in to the app whenever you’re available to start driving. While I appreciate it when drivers work as much as possible to increase the number of rides and our company’s income, I also value a balance. Having enough drivers to provide quick service is essential, which is one of our main selling points. However, if fewer drivers are on the road simultaneously, each driver may receive more occasional rides and experience idle time.

You might think,

“Less work, less pay, more idle time — that’s a loss for me.” However, consider this: in times of high demand, if there are no idle drivers, I lose customers as the wait time increases, so your idle ( no work, no paid time) is critical for lower customer attrition”

This way, we break away from the traditional paradigm where more work directly equals more revenue. Instead, we enter a new model where a strategic, demand-based position can maximise profits. The driver cannot complain for I pay for the rides, but I will make sure there are enough idle riders all the time so that I keep customers happy by keeping the wait time low. It is easier to achieve this if there is a lot of unemployment in the economy. After all, the drivers have no other option but to wait in the cab for the next ride.

In conclusion, the gig economy model we have developed underscores the transactional nature of the relationship between suppliers and the platform. Suppliers receive payment for the rides they undertake, reflecting the essence of their work’s productivity. However, a crucial revelation arises from our analysis — the idle time of suppliers must no longer be overlooked as unproductive. On the contrary, it has emerged as a critical factor in reducing wait time, a pivotal aspect of enhancing customer satisfaction and ultimately bolstering the platform’s valuation. Therefore, recognizing and compensating suppliers for their idle time is not merely an ethical consideration but a strategic imperative to generate value for the platform and foster a sustainable ecosystem. By embracing this paradigm shift, the gig economy can strike a harmonious balance between supplier compensation, reduced wait time, and customer retention, leading to an optimised and prosperous model for all stakeholders involved.

Note — Bench employees are skilled professionals without active projects on a company’s payroll. They are idle workers. Retaining them offers swift project mobilization, reduces turnover, and can enhance company valuation. by providing a competitive edge to showcase readiness for future opportunities.

Mathematical Model

The simplest profit model for any business is revenues minus costs. In this case, we will only consider the operational costs:

1.      N: Number of customers

2.      R: Revenue generated per customer

3.      OC: Operational cost (tech, staff, etc.)

4.      C: Cost of acquiring each customer

5.      M: Number of suppliers

6.      S: Cost of acquiring and training each supplier

7.      U: Utilization rate of suppliers

8.      a(U): Supplier attrition rate decreasing with U

9.      b(U): Customer attrition rate increasing with U

10.  Rc: Cost of replacing a customer who leaves

11.  Rs: Cost of replacing a supplier who leaves

12.  E: General employment rate

13.  a(U, E): Supplier attrition rate, decreasing with both U and E

Step 1: Basic Model

Here, profit is just revenue from customers minus operational costs. The more customers the platform has and the higher the revenue per customer, the higher the profit.

P = N * R — OC

Step 2: Including Acquisition Costs

P = (N * R) — {(N * C) — (M * S) — (OC)}

Here, customer acquisition costs (N * C) and supplier acquisition costs (M * S) are added to the operational costs. To profit, the revenue per customer must be greater than the combined operational, customer, and supplier acquisition costs.

Step 3: Including Attrition

We now consider the costs of attrition for both customers and suppliers. The attrition rates depend on the supplier utilization (U), which can influence customer satisfaction and supplier satisfaction:

P = N * R — {(N * C) —( M * S) — (N * b(U) * Rc) — (M * a(U) * Rs) — OC}

Here, customer attrition costs (N * b(U) * Rc) and supplier attrition costs (M * a(U) * Rs) are included. If the supplier utilisation is not managed correctly, these costs could significantly affect the platform’s profit.

Step 4: Including General Employment Rate

Lastly, we consider the impact of the general employment rate on supplier attrition:

P = N * R — {(N * C) — (M * S) — (N * b(U) * Rc) — (M * a(U, E) * Rs) — OC}

Here, the supplier attrition rate is now influenced by the general employment rate, which reflects the suppliers’ alternative opportunities. The lower the employment rate (i.e., the fewer job opportunities available to suppliers), the lower the supplier attrition, even with low supplier utilisation.

Explaining the Platform Economy Profit

The following equation illustrates how a platform economy’s profit (P) is calculated. This usually applies to digital services like ride-sharing and food delivery companies and depends on various factors. Let’s take a closer look at each component and analyse how the utilisation of suppliers and the skill level of the workforce affect customer and supplier attrition.

Firstly, N represents the number of customers and R the average revenue per customer. So, N * R represents the total revenue from customers. Subtracting from this is the total costs, comprised of several factors. N * C represents the direct cost of servicing each customer, and M * S is the total cost of acquiring and training each supplier.

The following two terms, N * b (U) * Rc and M * a(U, E) * Rs, represent the costs of attrition, both for customers and suppliers (or ‘drivers’ in the rideshare example). U is the utilisation rate of suppliers, Rc is the cost of customer attrition, and Rs is the cost of supplier attrition.

N * b(U) * Rc suggests that as the utilisation rate of suppliers increases, the number of customers leaving the platform (attrition) may also increase due to longer wait times or decreased service quality. This is multiplied by the cost of replacing these customers, resulting in the total cost of customer attrition related to supplier utilisation.

M * a(U, E) * Rs relates to supplier attrition. As supplier utilisation increases, suppliers might leave the platform due to overwork or lack of idle time. E represents external factors affecting suppliers’ likelihood of going, such as the unemployment rate or alternative employment opportunities. High unemployment or a lack of alternatives means suppliers have little bargaining power, allowing the platform to maintain high utilisation rates without substantial attrition.

Conversely, with lower unemployment rates or better options, suppliers are likely to leave if overworked. The product of these factors and the cost of replacing suppliers (Rs) gives the total cost of supplier attrition.

Finally, OC represents other operational costs not captured by the previous terms.

Given this framework, it is clear that balancing supplier utilisation is crucial in platform economies. High utilisation can increase attrition on both sides — customers and suppliers. However, where unemployment is high, or alternatives are scarce, particularly for lower-skilled work such as rideshare drivers or food delivery personnel, platforms can get away with lower utilisation, thus lowering customer attrition. Note this means each supplier earns less.

The dynamic shifts when considering higher-skilled suppliers, such as masseuses or carpenters. These suppliers generally have access to superior alternative job opportunities and, as a result, possess greater bargaining power.

Consequently, a platform must provide sufficient work opportunities (resulting in extended idle time) to avoid increasing supplier attrition.

Given that these individuals possess specialised skills, the cost of attrition and the expense of onboarding new suppliers is significantly higher. In such scenarios, platforms are likely to prioritise improving the income stream for suppliers to retain their valuable services.

Therefore, in high unemployment scenarios, especially for lower-skilled work, the equation suggests platforms can maximise profits by minimising customer attrition even at higher idle time for suppliers, thereby arguably exploiting these suppliers. It highlights the potential for economic exploitation in the platform economy, particularly for less-skilled workers, and underscores the importance of careful regulatory oversight and labour protections.

 (The author is a financial professional with a master’s degree in economics. I am intensely interested in the arts, academia, and social issues related to development and human rights)

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“In order to provide social security to the ‘Gig Workers’ in the unorganised sector, i.e., employed as full time/part time delivery personnel in e-commerce companies like Swiggy, Zomato, Amazon, etc., insurance facility of total of RS.4 lakh will be provided which includes, life insurance of Rs. 2 lakh and accidental insurance of ₹2 lakh. The entire insurance premium will be borne by the government,” announced Siddaramaiah, as reported by Livemint.

Through the inclusion of this provision in the Karnataka Budget, the government aims to address the persistent demands raise by the union representing these gig workers, concerning the informal and uncertain nature of their employment. The government recognizes the need to establish a social security net to support these workers.

According to the Labour Minister, Santosh Lad, an association of gig workers had submitted a request to the labour department to provide accidental cover for all the gig workers in the state, where there are over 2-4 lakh of them, as per estimates

Although the cost allocation is not clear, Lad said that more benefits were in the pipeline for the unorganised sector. “The gig workers’ association held a meeting with us requesting accidental cover. The e-commerce companies mostly do not cover the gig workers for accidental insurance. We are thinking of getting these gig workers a revenue model by constituting a transport board. As of now, the government has decided to provide them with an accidental cover,” he said, as provided by the Indian Express.

Who are these gig workers?

As defined by NITI Aayog, gig workers are individuals engaged in work that falls outside the conventional employer-employee arrangement. Understanding the unique challenges faced by this workforce, the government has taken this significant step to provide them with the necessary support and protection. A 2017 Ernst and Young study on the “Future of Jobs in India” even found that 24% of the world’s gig workers come from India.

Those employed as full-time or part-time delivery personnel for Swiggy, Zomato, Amazon etc are set to benefit from the insurance cover announced by CM Siddaramaiah in the budget presented. The cover comprises life insurance and accidental insurance of Rs. 2 lakh each.

What were the pre-poll promises made by the Congress Government to gig workers?

As reported by India Today, the gig economy employs over 2 lakh people in Bengaluru alone. The Congress party had announced its election manifesto for Karnataka on May 2, 2023, and made the following promises to the gig workers sector if voted to power:

1. The party pledged to establish a “gig workers welfare board” with an initial funding allocation of Rs 3,000 crore.
2. The party has also declared that a new, open policy will be implemented for hiring people through outsourcing, which will establish a minimum hourly wages for all gig and organised employees in the domestic and personal care, logistics, food delivery, e-pharmacy, transportation, and other pertinent industries.

Rahul Gandhi’s meeting with the gig workers before polls

Just a few days before the Karnataka Assembly elections, in the month of May, Congress leader Rahul Gandhi had met with and spoken to some of the young gig workers about their jobs and their working conditions. As per media reports, Rahul Gandhi had had a candid conversation with gig workers and delivery partners of Dunzo, Swiggy, Zomato, Blinkit at the Airlines Hotel in Bengaluru. It had also been provided that Gandhi discussed the lives of delivery workers, lack of stable employment and rising prices of basic commodities.While there were doubts raised by many over the said meeting being a wooing tactic of the Congress government, CM Siddaramaiah has started giving teeth to the promises made.

Following the footsteps of Rajasthan

It is essential to note that the state of Rajasthan, also a Congress government led state, was the first state to announce a welfare board and separate fund for gig workers. In February, 2023, in the state budget 2023-24, the Chief Minister of Rajasthan, Ashok Gehlot, had announced the enactment of the Gig Workers Welfare Act, establishment of a board and a welfare fund of Rs 200 crore in his government’s Budget for 2023-24. The said step was initiated by the CM to bring the gig workers in the state into the ambit of social security.

“To protect them from harassment, I propose to bring the Gig Workers Welfare Act, under which, along with the formation of the Gig Workers Welfare Board, a Gig Workers Welfare Fund will be established with Rs 200 crore,” the chief minister had said in his Budget speech, as reported by the Hindu.

The said Gig Workers (Registration and Welfare) Bill, 2023 to be introduced by the Rajathan government envisages a “welfare board” that will design welfare policies and hear grievances of gig workers on a piece rate basis. While the specificities of the policies and how they might benefit the workers still remains unclear, the board is expected to work towards a social welfare corpus which will be financed by a cess on the digital transactions made by consumers on the platforms that utilise the gig worker labour.

A welcome move, yet caution in the air

As provided in a report of the Times of India, the Karnataka-based United Food Delivery Partners’ Union appreciated the move but said they need to be recognised as formal employees and not gig workers. As provided in the report of the India Express, B Hariprasad, a delivery agent with a food aggregator, was cautious in welcoming the announcement. “We have a health insurance cover of up to Rs 1 lakh. In case of any fatalities, our family is entitled to a sum of Rs 5 lakh. Even the premium is borne by the company. Although I haven’t used the health cover provided by the company yet, I definitely welcome the government’s move to give the accidental cover. However, it is to be seen whether the government consistently funds this scheme. Until then I would welcome this with a pinch of salt,” he said.

Anichur Haque, another delivery partner, said, “We already have a health insurance scheme of up to Rs 1 lakh, where we will be reimbursed for medical emergencies. But I will wait and watch how the government’s cover is different from that of the company’s and then apply,” as per the India Express.

Gig economy- unrecognised but ignored no longer

Swiggy has reportedly highlighted its “strong insurance benefits” for its delivery partners and their family on its blog, according to a report by the Indian Express. Reportedly, the food aggregator also offers a claim status tracking feature to assist the delivery partners in quickly and easily submitting insurance claims. The business gives network hospitals visibility and enables partners the chance to immediately change details. Additionally, it has been provided that a 24-hour helpline has been established for inquiries on switching from physical to online filing of documents. Reportedly, last year, Zomato had launched a pilot initiative to give its delivery partners and their dependents a health insurance cover of Rs 3 lakh.

As per a report of the Hindu, “gig” work has become a major source of jobs for youth in India and an estimated eight million people are employed in this industry built on the back of the smartphone revolution. Even though it has majorly remained an informal form of labour, the gig economy has been a beneficial outlet of employment, especially for the youth and migrant workers.

In the recent times, a growing number of flash strikes and protests have been put up by the gig workers, to shed light on their non-recognition as “workers”, lack of social security or related benefits, and harsh working conditions. In 2020, Telangana Gig and Platform Workers Union (TGPWU) organised 26 days’ protest. “We got the attention of labour ministry and they sent notice to the companies. However, nothing much changed,” says Salauddin, the founder president of TGPWU, as provided by the Outlook. Primarily, the platforms though accepted their requests to keep them within their zones and not push them to travel beyond a certain distance, with time most of it went astray.

The Indian Federation of App-based transport workers (IFAT) in 2021 filed a writ petition to the Supreme Court asking for its intervention to provide the ‘rights to social security’ to these gig workers. It is essential to note that even after 3 consecutive notices, the platforms had not responded to the said notice.

Until now, the union government had only provided gig workers and unions with crumbs in the name of security and equality. Notably, in the 2020, the parliament had passed a Code on Social Security and proposed to offer social security and employment benefits to the platform workers, which remained in abeyance due to lack of concrete mandate to follow it. The implementation of these proposals is yet to be finalized, and the legal status of gig workers had remained uncertain.

While the aforementioned move by the Congress government in Karnataka has been a welcome move, the government needs to also address the other major concerns raised by the unions of gig workers, such as recognition as formal workers, as well as take steps to prevent the gig workers from facing gross exploitation and injustice. It is further crucial that provisions focusing on occupational safety and health, grievance redressal and dispute resolution, and skill development are also worked upon.

Other key points in budget

CM Siddaramaiah also informed that the state government will provide an additional financial aid of ₹4,000 to ₹5,000 a month to each household through the five poll guarantees promised in the Congress party’s manifesto. The five guarantees will cost the exchequer approximately ₹52,000 crore annually and are expected to benefit around 1.3 crore families.

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Report Highlights Poor Working Conditions for Gig Workers; Uber, Ola, Amazon Score Zero

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Delhi: A latest report by Research firm Fairwork India made a shocking revelation on Tuesday that major platforms like Ola, Uber, Dunzo, PharmEasy and Amazon Flex scored zero in the assessment of fair working conditions for gig workers.

The research project, which is led by the Centre for IT and Public Policy in collaboration with partners at the University of Oxford, said the said firms did not provide fair pay, fair contracts, fair management, fair representation or fair working conditions to their gig workers. It underlined how the much-hyped flexibility in platform work plays out in practice, and the workers are not the ones who benefit from it.

The report said that other than Bigbasket, Flipkart, and Urban Company, no other platform publicly committed or provided sufficient evidence to ensure workers’ earnings that commensurate with the hourly local minimum wage after work-related costs. Another key finding was that while workers have engaged in various forms of collective action to voice their concerns in the platform economy, the platforms have been unwilling to acknowledge or bargain with any such collective body of workers.

“Even with workers and worker groups repeatedly emphasising the importance of a stable income for platform workers, platforms have been reluctant to publicly commit to, and operationalise, a minimum wage policy,” the report said.

The firm studied 12 firms and granted Urban Company a score of seven out of 10, which is the highest, six to online grocer BigBasket, and five each to Flipkart and Swiggy, four to Zomato, and two to grocery delivery platform Zepto and one to Tiger Global-backed delivery firm Porter.

“This year, only Bigbasket, Flipkart and Urban Company were awarded the first point (on providing minimum wage) because of the public commitments they have made to paying workers at least the hourly local minimum wage after factoring in work-related costs,” Fairwork India said in its fourth annual report.

“Bigbasket and Urban Company have operationalised this by committing to reimburse the difference between worker’s earnings per hour and the hourly local minimum wage after costs. Flipkart and Urban Company have committed to basing their pricing structure for workers on the hourly local minimum wage after costs. Flipkart has also undertaken steps to hold its third-party service providers to the same commitment,” the report added. However, it pointed out that none of the platforms scored on the second point of fair pay, which is based on the workers earning a living wage, as opposed to the minimum wage.

Fairwork India Scores 2022

The Fairwork report came down heavy on a NITI Aayog report on the gig and platform economy. It criticised the NITI Aayog report by saying that “any claims that workers enjoy increased earning potential on platforms is neither supported by evidence, nor does the report contain an estimate of the share of platforms’ earnings paid to workers

Gig economy workers, who are making up an increasing portion of the Indian workforce, are not extended crucial employee benefits such as health insurance, financial security in case of health emergencies etc. Firms using the service of gig workers have been accused of exploiting them and limiting corporate liabilities. However, the State is yet to provide any safety against such worker exploitation.

“Even as instances of abuse and discrimination against platform workers have surfaced this year, the legal landscape of the platform economy in India remains largely unchanged. Members of Parliament have directed attention to the need for reform, yet the Code on Social Security and the Motor Vehicle Aggregator guidelines, 2020, both of which regulate the conditions of platform workers, await enforcement,” the Fairwork report said.

It further added that the Digital Personal Data Protection Bill, 2022, which is likely to have repercussions for the data collected from platform workers, has not yet been passed by the Parliament. A Public Interest Litigation (PIL) filed before the Hon‘ble Supreme Court by the Indian Federation of App-based Transport workers (IFAT) to reclassify platform workers as unorganised workers or employees, also awaits a decision.

Courtesy: Newsclick

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Arif had recently undergone an appendectomy and though the stitches had been removed, the wound was yet to heal completely. But rest was not an option. “If I stay at home, I won’t be able to earn anything,” he said, adding, “I have to take a break after each trip because it hurts.”

Arif is among the 1.5 million drivers working for ride-hailing companies in the country, part of India’s emerging gig economy–a labour market characterised by short-term contracts or freelance work for drivers, delivery staff and so on. Employers include web- or mobile-application based cab services such as Uber and Ola, and food delivery applications such as Zomato and Uber Eats.

Ola and Uber India have a 95% share of the country’s platform taxi market, and between late 2017 and early 2018, Ola had 56.2% of that share, Economic & Political Weekly reported in June 2018.

But app-based service companies such as Ola, Uber, Uber Eats, and Zomato have some of the worst working conditions among Indian start ups, according to a study by the Fairwork Project, an initiative led by two Oxford University researchers, Quartz India reported on March 26, 2019.
The companies were ranked on five principles of fairness–pay, conditions, contracts, management and representation. Of a total score of 10, Ola and Uber scored two; Uber Eats, two; while Zomato scored four. The only criterion that Ola and Uber met was pay, the Quartz India report added, meaning they “paid at least the local minimum wage, including employment costs incurred by the worker”.

This is the third and final story in our series on the informalisation of employment in India. The first and second dealt with the impact of contractualisation, when companies no longer hire directly and on permanent positions, but prefer to go via contracts, which enables them to hire and fire more easily, and cut back on perks and benefits.

India faces rural distress-led migration and a four-decade-high unemployment rate of 6.1%, the Periodic Labour Force Survey conducted by the National Sample Survey Office (NSSO) between July 2017-June 2018, released May 31, 2019, said. The government had withheld this report, but it had been leaked in January 2019, causing consternation over its bleak findings ahead of general elections. In response, the NITI Aayog, a government think tank, asserted in January 2019 that application-based cab companies such as Ola and Uber alone had created more than 2 million jobs.

No reliable data are available on the number of jobs created in the gig economy in India so far. Nevertheless, 70% of corporates surveyed by a human resources consultancy, Noble House, said they had used gig workers at least once for major organisational issues in 2018.

The gig economy is also prone to rotating attrition–when the same people move from one job to another. “Given the nature of the jobs offered by the gig economy, one does expect large-scale job rotation,” said P.C. Mohanan, former acting head of the National Statistical Commission, who had resigned after the government’s refusal to release the NSSO jobs report. Gig jobs are seen mostly in large towns or cities that have higher job mobility, he said.

Our investigations from Mumbai and Bengaluru show that although a gig brings in money, it offers none of the benefits that regular jobs bring–leave, limit on working hours, overtime, job security and health benefits.

Our interviews with workers from these four app-based service providers in Mumbai and Bengaluru revealed that many of them were migrants to the city and spent long hours on the job to earn incentives to be able to send savings back home or make their existence in their adoptive city a bit more comfortable. They had little or no employment benefits such as insurance, and complained that their incomes were declining.

Arif, the driver, said he worked 15 hours a day to earn upto Rs 35,000 a month including incentives. However, the income goes into paying off his car loan, paying for fuel, maintenance and car insurance, and Arif’s medical needs, rent and household expenditure.

‘Can’t afford to be sick, on leave’

Sustainable, inclusive growth and productive employment are about more than just employment, Deborah Greenfield, deputy director-general for policy at the International Labour Organization, said in a press release in February 2019. “Equality and decent work are two of the pillars underpinning sustainable development,” she said.

“[Some] new business models, including those enabled by new technologies, threaten to undermine existing labour market achievements–in areas such as improving employment formality and security, social protection and labour standards–unless policy-makers meet the challenge,” an accompanying report cautioned.

The stories we heard in Mumbai and Bengaluru indicated that the challenge is far from being met. Arif, a high-school graduate with a young family, has been working with Ola for three years. He blamed his work hours for his poor health. “When I started driving, I would begin at 7 a.m. and work till 11 p.m. or midnight,” he said. “Long hours meant disturbed meal routines and that led to acidity and bodyache. I didn’t even have time to take a toilet break.”

A surgery to remove his appendix, conducted at a private hospital, cost him Rs 80,000 and ate into the 20 installments he owes his bank on a Rs 2 lakh ($2,880) car loan. The government hospital he first visited first sent him home with just painkillers. A CT scan at a private hospital, costing Rs 16,000 ($230–or half his monthly income), showed a burst appendix. “I was almost unconscious by the time I made it to the operating table. For three days, I drifted in and out of consciousness,” he said.

All these costs had to be paid out of Arif’s pocket because he was not insured and had no work-related health benefits or sick leave. He could not drive for a few months afterwards and this further eroded his savings. “A neighbour drove for me and that got me Rs 350 [in earnings] a day but that was only on days he worked,” he said.

“Drivers or service providers act as independent contractors who use these platforms to make access for the customer easy,” Radhicka Kapoor, economist and senior fellow at Indian Council for Research on International Economic Relations (ICRIER), a research organisation, told IndiaSpend. “Technology reduces transaction costs, but the nature of employment does not match the standard employer-employee relationship. In the long term, they may not have social security like insurance or pension, which increases vulnerability.”

Uber, which launched its initial public offering (IPO) on the New York Stock Exchange in May 2019, disclosed that it currently has 30 million cars on its platform in India, of a total 850 million across the world. Uber generated revenue of $11.3 billion (Rs 78,720 crore) in 2018, of which $9.2 billion (Rs 63,729 crore) came from its ride-sharing services and $757 million from food delivery service Uber Eats, The Economic Times reported on April 13, 2019.

Bhavish Aggarwal, Ola’s co-founder and chief executive officer, too has stated that he aims “for an IPO in the next three-four years”.

“With Uber going public it will be interesting to see how the money is created for the shareholder,” said Kapoor. “If it comes at the expense of driver incomes, it will be a major problem. Then there is this perception that there are driverless cars, particularly in the US, which creates fear among drivers that they would lose their jobs. This suppresses the already low bargaining power of labour.”

‘60 trips in 4 days to earn Rs 2,000 incentive’

Ever since liberalisation, the manufacturing sector, particularly organised manufacturing, has been expected to generate jobs to absorb the millions who joined the labour force each year. Prime Minister Narendra Modi too emphasised the job-creation benefits when pushing for Make in India.

Yet, companies large and small, including large multinationals, are increasingly hiring fewer workers directly and on permanent positions, and more informally or through contractors, as IndiaSpend reported in March 2019. The latter are lower paid and more insecure, and often unable to unionise to improve their bargaining power.

Of the approximately 61 million jobs created in India after the liberalisation of its economy in 1991, 92% were informal, showed an IndiaSpend analysis of NSSO data for 2011-12.

Workers opt for app-based companies sometimes as a supplementary source of income, but mostly because they cannot get regular salaried jobs, said Kapoor of ICRIER. “Lack of opportunity is pushing people to take up such jobs in India. Initially it seems that there is flexibility, but people here want a regular job. Job mobility is also restricted to big cities or large towns, which leads to an issue of migration.”

“In a country with so many informal jobs, [gig] jobs add a new kind of informality which makes the existing challenge harder to solve,” said Kapoor.

Agrarian distress is causing mass exodus from farms to cities, too, as our ongoing series on drought shows. In our conversations with drivers and food delivery executives, many said they had come from rural or semi-urban homes, many of them either farmers or children of farmers with agricultural land that yielded little or nothing.

Take the example of Manjunath, 50, a farmer who has been a driver with Uber for a year and a half. He owns a five-acre farm in his hometown, Hassan, 200 km northwest of Bengaluru. Scanty rains had made farming unprofitable so he migrated to Bengaluru 15 years ago, leaving his brother to manage the farm. His family of four, including two children and his wife, depend on him.

Manjunath worked as a driver for a call centre for six years before he started driving his own car with Uber in the hope of better earnings. “I save around Rs 10,000 a month after making 10-15 trips a day, driving about 12 hours,” he said. He must pay Rs 28,000 every year as car insurance premium and Rs 18,000 a month as car loan repayment. Fuel costs Rs 800 or so every day.

At app-based cab services, drivers’ incentives are linked to a minimum number of trips to be completed in a stipulated number of days.

Manjunath said he must complete “60 trips between Sunday to Wednesday” to earn the weekly incentive of Rs 2,000, adding that running an Uber cab is beginning to affect his health. “The constant driving gives me body pain and I only get to go home every alternate day,” he said. “I do not have a medical or health insurance from the company.”

Nagaraj*, 24, another driver with Uber, left his home in Amarapuram in Andhra Pradesh four years ago and moved to Bengaluru in search of a better life. Now living with his uncle and sister, he is disappointed with his earnings. “I came looking for a job after I finished my school and worked in a garment factory,” he said. “I thought this would be better because some of my friends were driving.”

The Rs 2,000 a week incentive he gets for making 60 trips in four days is the bare minimum he needs to make any savings, Nagaraj said. His expenses include a monthly loan of Rs 16,000 for his car and house rent of Rs 5,000, plus vehicle servicing that can cost upto Rs 10,000.
“Uber takes commision of 25% and I think Ola is higher at 30 to 35%. It was better when I joined,” he adds. “I made close to Rs 50,000 a month but now it has fallen to Rs 35,000.”

All drivers for app-based cab companies complained about falling earnings due to increased competition–more and more cabs are plying every day.

Arif makes around Rs 3,000-5000 per week, a sum so low even auto-rickshaw drivers earn more, he said. Getting the car serviced at an authorised centre, twice as expensive as taking it to a local garage, further drains his earnings.

“Earlier I could make Rs 12,000 a week,” said Arif. “Even if I worked from Friday to Sunday, I earned nearly Rs 3,000 as the company used to give 1.5 or 1.6 times the charge during peak hours. Now we can make a decent amount only from long trips and on surge pricing.”

Ola and Uber drivers struck work in October 2018 to demand better income. They wanted the base fare to be increased from Rs 8 to Rs 12. They threatened to go on strike again after their promises to meet demands made in October were ignored, The Times Of India reported on  January 13, 2019. But the strike was not very effective because not all drivers were car owners and protests petered out, Arif said.

“We were not united,” he said. “Uber refused our demands and instead of increasing they reduced the price to Rs 6 per km. When we went on strike during Diwali, the drivers had completely lost faith in the union leadership–there were allegations they were bribed by the company.”

The number of cars plying for app-based companies has increased so much that incentives have fallen, complained Narayana*, 37, an Uber driver from the drought-prone Kolar region in Karnataka. “It seems like everyone is driving a cab,” joked the farmer-turned-driver who said he still owns a one-acre mango orchard in his village.  

“My aged mother who lives with me needed an eye surgery and I had to pay for it from my pocket because I do not have health insurance,” Narayana said. “So, one of my cheques for repaying the car loan bounced.”

52 trips in 4 days, delivering food on a bike

Food delivery apps such as Swiggy, Zomato and Uber Eats offer jobs to drivers and food delivery executives. Zomato has 50,000 delivery executives while Swiggy has over 55,000, The Economic Times reported on June 26, 2018.

But working conditions are taxing and demand 12- to 15-hour engagement. However, unlike app-based taxi companies, Zomato provides accident and health insurance; Uber Eats provides accident insurance. The delivery executives have their own bikes for delivery, loans for which add to their low-income burden.

Raghu*, 32-year old school graduate, migrated to Bengaluru because there were few jobs that could earn him more than Rs 6,000 in his home district of Gulbarga. At Uber Eats, he said, he can make as much every week if he “works hard”–this entails working close to 14 hours a day, zigzagging 15 to 20 times through city traffic to deliver food.  

Delivery executives receive Rs 1,150 as incentive if they make 52 trips from Monday to Wednesday. Peak-hour delivery executives such as Raghu get between 1.2 and 1.4 times the usual fee of Rs 25 per trip, he said. He makes between Rs 25 and Rs 30 for upto 4 km and Rs 10 for every additional kilometre covered beyond that.

“If an executive makes 48 points between Monday and Friday, he gets a Rs-800 incentive,” Raghu said. But this means travelling 180-200 km over five days. “It is tough.”

When he joined Uber Eats, Raghu paid an enrollment amount of Rs 1,300. “I got a t-shirt and bag, and Rs 300 was cut for insurance,” he said. “At Zomato, people have to be logged in constantly for a certain period otherwise they do not get the health benefit.”

Rajkumar*, a mechanical engineering diploma holder from Hassan who works for Zomato, told IndiaSpend he needs at least Rs 7,000 to Rs 10,000 to pay for room rent, to repay his bike loan, and for food and other essentials. He too hails from a farming family which grows potatoes, tomatoes and coconuts, but water is scarce back home on the farm and the yield is not profitable. He left his first job as a toll-booth operator to join Zomato.

Rajkumar can earn a “maximum of Rs 25,000 a month” if he stays logged into the app from 8 a.m. to 11 p.m. He tries to touch 40 points or 20 trips a day at least, he said, and each trip earns him two points. “This helps me earn Rs 600 and an incentive of Rs 700 if I can do 28 trips,” he said. “Then I get Rs 30 per trip.”

Rajkumar has a Rs 3 lakh loan, the 9% interest on which keeps him perpetually in debt. “A monthly income of Rs 25,000 is insufficient to repay this loan,” he said. For any additional expense, he must borrow more money from friends and relatives. “I pay Rs 2,000 for a room that I share with a friend and have not repaid the loan for the bike I bought two years ago, for which I pay Rs 3,700 [as monthly repayments].”

The dust and pollution are serious problems, he said, and by the end of the day, his body aches. But in his contract with Zomato, Rajkumar said, he is entitled to health insurance worth Rs 5 lakh and a cover against accident worth Rs 1 lakh.

Another limitation of employment at app-based companies is the lack of avenues for professional growth. Although none of these jobs offer skill development, some do offer training in soft skills to help workers interact with customers, said Kapoor.

“I want to do something with my life, having come from far to this city to earn a living,” Rajkumar said, “But I have bills to pay.”

Ola, Uber, Uber Eats, and Zomato have not responded to requests for comments. We have requested for comments from the ministry of labour and employment and the NITI Aayog. We will update if and when we receive them.

*Names of drivers and delivery executives have not been disclosed at their request.

(Paliath is an analyst and Salve is programme manager at IndiaSpend.)

Courtesy: India Spend

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