Perspective -India's gig economy

The Story So Far :-

On December 25 and 31 thousands of gig workers engaged in protest demanding fair wages and decent working conditions. However because of surplus manpower the strikes unaffected the operations of companies. Behind India’s gig worker strikes lies a nuanced tale of fragile wages , challenging working conditions, and an economic model struggling to achieve growth. Issues related to gig workers have echoed in the Parliament with clamour, too. The aftermath has been swift, as many platforms are now forced to withdraw their 10 Minute delivery claims.

 Gig Economy - Gig economy is rapidly growing in the labour market.A gig economy is a free market system where organisations hire or contract workers for temporary positions to meet the company's requirements.This model provides, which grew significantly during the COVID-19 pandemic, offers flexibility and convenience.For gig workers potential downsides include disrupted work-life balance, financial insecurity for workers, and limited career development.

Types - Platform workers are based on online apps and digital start-ups platforms e.g. Swiggy, zomato rapido. 

Non-platform workers are casual wage workers working in conventional sectors part-time or full-time.It allows individuals to earn income through on-demand work, including ridesharing, food delivery, and skilled freelancing. Most of these jobs are in lower-income job types such as micro tasks, deliveries, retail trade and sales, transportation etc. They are independent contractors, on-call workers, online platform workers and temporary in nature.

According to the Code on Social Security, 2020 (India), “A gig worker is a person who performs work or participates in work arrangements and earns from such activities, outside of the traditional employer-employee relationship.”

According to NITI Aayog, India currently has around 7.7 million gig and platform workers and it is projected to rise to 23.5 million by 2030.

Advantages Of Employers And Employees

For Employers

Easy hire and fire because of seasonal and temporary job type. Wider range of applicants due to remote work options.Companies make more earnings because they need not to pay more wages as compared to regular employees. Do not need to provide costly benefits like health insurance or paid vacation time.

For Employees - It Offers various side-hustle opportunities to those who work regular full-time jobs. More flexibility for individuals to set their own schedule accordingly.

Challenges and Risks in the Gig Economy 

The rise of the gig economy hinders full-time employees from building reputed career objectives.Employers free from pressure to raise wages, as they can hire and fire gigs worldwide, including remote and underdeveloped low living cost areas. It also often erodes worker rights, like health insurance, Social security, job stability retirement benefits,minimal legal protection and sick and paid leaves.

The flexibility of working gigs can disrupt the work-life balance, sleep patterns, and daily life. Long-term relationships between workers, employers, clients, and vendors can erode.This can eliminate the benefits of building long-term trust, customary practice, and familiarity with clients and employers. Workers also need to be wary of online scams that offer high-paying job opportunities, known as bottom-dollar scams

Do Gig Workers Experience Higher Job Satisfaction Than Regular Employees?

According to the National Institute of Health, gig workers reported lower mental health and life satisfaction than those employed full-time and part-time in 2022. Gig workers also experienced higher levels of loneliness and financial insecurity

In the United States, it is estimated that about 38% of the population is operating in some form of gig capacity. The number is expected to rise as more organizations adopt independent contractor work in order to save time and money.

The gig economy has risen drastically in popularity over the last  five years after covid pandemic and is now a very common way for individuals to earn a part time income.

More precisely, it is estimated that 1.6 million workers worldwide get their income from the gig economy.

Pros and cons of Working in a Gig Economy

Operating in the gig economy produces a wide range of advantages and disadvantages realized by both the business and the workers.

Here are some of the advantages realized by organisations.

1. Availability of low cost workers

Cost effectiveness or minimizing costs and expenses are widely considered one of the major objectives of operating in the gig economy. This is because companies are able to hire off-site workers which significantly reduces the need to maintain expensive workspaces and large offices.

Another benefit is hiring independent contractors completely reduced large expenses such as employee benefit packages, retirement plans, medical expenses and paid sick leaves.

2. Tapping into Labor Force

The gig economy provides a surplus labor force that is able to directly match the company's suitable requirements. This removes the hassle of dealing with a contractor throughout the hiring process and working conditions, thus, making it easier to find workforce to complete the job.

3. Better Output and flexibility 

Modern working class in today’s society value flexibility much more than compared to in the past.This is why the gig economy is surging in a rapid mode 

Working Individuals who are interested in accumulating extra and instant income are attracted to applying for a position that offers an unconventional work schedule.This type of flexibility directly or indirectly impacts employee's motivation, ultimately creating a positive correlation to output production.

Following are some of these advantages realized by the workers:

1. Feeling of Independence

Independent contractors in the gig economy need not required to work in office premises, rather, they work in their own comfortable spaces.It continuously varies from someone working in a home premises like writing articles to someone or working from their car driving for Ola.

2. Flexible working environment 

These are more or less task based work. Workers operating in the gig economy are allowed to work any time they desire according to their comfortable time and position. In most cases, a task will be given to a worker with a deadline or time line already fixed in terms and conditions.

3. Another Source of Income

As mentioned above, the gig economy is an increasingly attractive market due to the sheer flexibility that allows working individuals to earn extra income in their desired hours. 

Drawbacks of Working in a Gig Economy

While there is a wide variety of advantages that the gig economy produces, there are also some downsides that tend to make the process difficult.

Here are the disadvantages realized by organisations.

1. Workers Commitment towards the organisation.

Those Individuals who work as freelancers may not be as committed to their organization as if they were hired on regular basis. In addition, gig economy companies are generally not known to incentivize their employees like job security protections. Such an arrangement can create loyalty issues towards organisations, reducing the likelihood of further work, and decreases continuous motivation for their work overall.

2. Ethics related Issues-

In some cases, organizations that operate in a gig economy are criticized for the ethical practices they perform. Their job is casual in nature does not offer proper benefits, and generally does not offer decent wages.

These are the disadvantages realized by workers in the gig economy:

1. Lack of job Security 

Firms operating in a gig economy do not provide job benefits to their workers. Independent individual contractors are not completely considered “employees” of the organisation.

2. Personal Expenses

In some cases gig workers faces challenges because of apps algorithms.In some cases, organizations within the gig economy are not required to cover personal expenses such as gas used while driving for DoorDash.

3. Feeling of Isolation 

If someone is independent contractor means extremely independent job profile. For some people, the arrangement is a major motivation tool, but for others, it can create a feeling of alienation, which can hugely affect production of the company and mental health of the workers.

Future Outlook and Regulation

The modern gig economy model continues to evolve from rapid, venture-capital-funded expansion toward sustainable, profit-driven operations, affecting worker earnings. As the gig sector grows, governments are mulling over looking to provide social security protections to gig workers, such as initiatives for life insurance and welfare schemes. 

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Milan Tomic

Hi. I’m Designer of Blog Magic. I’m CEO/Founder of ThemeXpose. I’m Creative Art Director, Web Designer, UI/UX Designer, Interaction Designer, Industrial Designer, Web Developer, Business Enthusiast, StartUp Enthusiast, Speaker, Writer and Photographer. Inspired to make things looks better.

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