Resolving the gig paradox

Gig workers are vulnerable in the absence of a safety net. Rajasthan may show the way ahead

From food and commuting to medicines and groceries, the gig economy has come to shape the lives of millions of people, including in India with the entry of platforms that operate on an asset- and employee-light model, taking on board service providers as contractors rather than employees, thereby keeping fixed costs low, transacting in commissions and avoiding paying for any benefits altogether. Though these services remain popular, it has been clear for some time that not all is well with this model. From London to Ludhiana, countries have been rocked by protests by platform workers who speak of simmering discontent over payment terms, hazardous working conditions, and callousness and neglect.

The bill also provides gig workers access to general and specific social security schemes (HT)

At the heart of the dispute is a dichotomy – the gig economy envisions workers as independent contractors who enjoy the independence of entering a particular transaction. It imagines the relationship between her and the platform as one of equals. But in the real world, the actual relationship is one of hierarchy, between a powerful platform controlling wages and compliance, and a worker dealing with a paucity of organised jobs, and no effective rights. This asymmetry in bargaining power is driving discontent, tilting the scales against workers further. Courts, too, have wised up to this problem, which is why some in Europe and the US have ruled that platform workers should be entitled to some benefits and treated as employees.

But these are piecemeal interventions. This week, Rajasthan took a step forward on what could be a more lasting solution – passing a first-of-its-kind bill extending social security to gig workers. The Rajasthan Platform Based Gig Workers (Registration and Welfare) Bill, 2023 seeks to register all gig workers and aggregators in the state, facilitate guarantee of social security to gig workers, and give them an opportunity to air any grievances. This is a welcome move, one that should be studied carefully by other states. If implemented well, the bill can fill gaps in labour laws, and correct some bias against welfare. Niti Aayog estimated last year that platforms will employ 23.5 million people by 2030, a majority of them in medium and high-skilled jobs. Economic cues already suggest that a large chunk of organised sector jobs created in the next decade will be with platforms, and attract young educated people. In that sense, gig workers are also a nascent electoral demographic, one that political parties will work hard to attract in the years to come.