Opinion The gig economy is growing at the cost of workers’ rights and social security

There is an urgent need to address a blind spot in the conversation around the gig and platform economy. High unemployment and jobless growth are compelling more and more workers to join an intensely informal employment sector that they are seeking an escape from. 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.

The mirage of providing workers flexibility in choosing work and working hours has been promoted by gig and platform companies and needs to be solidly questioned. Gig and platform companies are simply cashing in on a crisis of work in the country and the vulnerable position that lakhs of workers who are part of the informal economy are in. A majority of the workers in the gig and platform economy are from economically vulnerable families. In the absence of alternative employment, income distress or shocks, they are being pushed towards even more precarious work, braving completely informal conditions, and risking physical and mental safety to be able to earn enough to survive. As per Niti Aayog’s Policy Brief on the issue, the platform-based gig economy will employ 2.35 crore workers by 2029-30 with the concentration of workers in “low-skilled” jobs set to increase. The burgeoning industry of gig and platform work has a direct correlation with a policy that ignores the concerns of the unorganised working class. The same Niti Aayog’s report practically absolves the state of any responsibility towards regulation that would help ensure better remuneration, working conditions, and social security for gig workers. Instead, it recommends further platformisation and incentives for aggregators as the way forward.

The political economy of platform-based gig work is centred around undermining accountability at multiple levels. The first is the perversion of the concept of financial accountability in our so-called free market economy. Loss-making aggregators are creating an industry equilibrium which can only function by initially ensnaring workers with incentives, and very quickly moving to exploit workers. Companies that should have been edged out of existence by “fair competition” of the so-called “free market” continue to draw money from investors and financial markets without the former having to prove profitability even a decade later. The second is the undermining of digital accountability. Algorithm-determined aggregators who have access to vast amounts of data have gamed the rules of operation entirely against the workers. From rigging order allocations to prevent workers from reaching transaction levels that will earn them incentives, to blocking IDs arbitrarily – the digital technology underpinning platform economies is not accountable to the very people that serve them. The third is the erosion of the worker’s identity. Ironically gig platform workers are called “partners” to avoid compliance with labour laws, but their terms of engagement are highly skewed. Their wage rates are entirely unregulated and working hours are opaquely and absolutely determined by an algorithm. Governments at different levels have ignored demands for regulation of the industry.

Where do we go from here? The Labour Code on Social Security gives little hope due to the manner in which gig workers have been defined as those being outside the “traditional employer-employee relationship”. Government and aggregators can legally absolve themselves from recognising gig workers as workers with justiciable rights under an umbrella of other laws, underscoring the compromise reached between vested interests and the state. The precarity of work and labour has been sanctioned by law.

In this legal vacuum, the initiative of the government of Rajasthan to pass a law to register and provide social security for gig workers in the state can be seen as a much-needed initiative. The law provides for a tripartite board to automatically register all gig workers operating in the state as soon as they are brought onto the platform; rights to minimum social security including medical and accident support, educational support for children of workers and any other schemes. All of this would be financed through a work-output-based levy on each transaction in the gig economy that is calculated and reflected in a digital trail. Gig workers will then benefit from the social security that they have earned from their own work. Such a legal framework providing social security will hopefully incentivise more workers to assert their rights and push the state and the employers to recognise their responsibility towards them. The inspiration for the law is a creative and powerful struggle led by Baba Adhav and Hamal workers of Pune over 50 years ago, which led to the passage of the historic Maharashtra Mathadi, Hamal and Other Manual Workers Act of 1969. Ensuring that a social security levy was imposed and collected as part of the wage on every transaction made it possible for this extremely unorganised sector to start a practical journey of formalisation of employment, and social security for workers.

In fact, it also offers a possibility to imagine just how the same digital medium that is being used to obfuscate rights, can be used as the medium for unorganised workers to claim recognition and dignity. The digitalised gig economy might actually be moulded to provide liberation and dignity to vast numbers of informal sector workers across the country and the world. The law, pushed for by civil society organisations and campaigns within Rajasthan, becomes yet another instance of a state government showing the way without having to wait for the government of India to define the norm. It has also set off a very important conversation on the issue in the hectic arena of political campaigning, as we see it in Karnataka. It is also worth acknowledging that by doing so, the government of Rajasthan would set a precedent globally, as apart from progressive judicial interventions which mandate that gig-based platform workers be treated as workers, there has been no comparable legal guarantee for the social security of gig platform workers enacted anywhere.

Gig-platform workers are not the only group of unorganised workers that are exploited, and the gig-platform economy is certainly not the only industry benefiting from the informal and temporary nature of gig work at the cost of the basic rights of the workers. Nevertheless, it has always been workers and their struggles for rights that have shown the way for others facing a similar predicament. That is why it is essential that the frameworks that are developed to empower gig workers to challenge their oppression create pathways for all unorganised workers to claim their rights.

The writers are associated with the Social Accountability Forum for Action and Research (SAFAR).