Economy

The Future of India’s Gig Economy

In the age of the fourth industrial revolution, there has been a transformation in the manner in which companies operate. This technological revolution has led to the ‘digitisation of the labour market’. The ‘gig economy’ is a new, and relatively lesser known phenomenon that is reflected in this exponential growth of online platforms. The gig economy, also known as the sharing or platform economy, is one of the most important phenomena in the world of employment today.

So, What Is the ‘Gig Economy’?

Millennials have a refreshing attitude towards careers — They increasingly desire a sense of autonomy and flexibility, for which they are even willing to give up some amount of financial predictability.
This is where gig platforms come into the picture.

The gig economy involves the exchange of labour and other services between individuals or companies through digital platforms, involving a temporary contractual job, or a short term contract, that a person may undertake on a ‘project-to-project’ basis, for which the payment is made once the transaction is completed.

The digital age has brought about significant changes in work culture as we know it, workers are no longer bound to a fixed location, as an increasing number of people choose to work from home. In the gig economy, instead of traditional full-time employment, companies hire independent workers for short-term engagements based on contractual agreements. One of the chief characteristics of the gig economy is the lack of regulation and security– Businesses save resources in terms of benefits like provident funds, paid leave and even office space.

The Gig Economy in India

The digital revolution in India, caused by the explosive growth of internet penetration, has made smartphones and cheap data affordable for millions. They now have access to information, which has led to a significant change in the labour market. Consequentially, this has shifted trends in the market, specifically with regards to online service providers, that have come to increasingly replace the traditional set up.

The enormous popularity of the ride hailing apps such as Ola and Uber, or even food delivery apps such as Swiggy and Zomato have changed consumer behaviour and patterns to a large extent. As a result of this, there has been a significant increase in employment in the service sector to cater to the growing demand.

Over the last few years, we have seen the exponential rate at which online service providing apps such as Uber, Ola, Swiggy and Dunzo, have taken over different sectors of Indian market. These companies make up some of the largest employers of the gig economy. The online giants hire people on a contractual basis, they are paid on the basis of the tasks completed, which allows employees to have a certain amount of flexibility when choosing their work hours.

With an evident growth in these new forms of employment, India has become one of the largest hubs for the gig economy world-wide.

Pitfalls and Possibilities

Over the last couple of years, as the phenomenon continues to rise in popularity over the world, an increasing number of literature depicts the harmful consequences of this form of work. Most gig platforms do not provide for social security benefits that an employee would receive in a traditional set up. Companies like Uber are being called out for demanding obligations from its drivers that any full time employer would, but without any perks or protection, continuing to justify this by insisting that they are independent contractors and not really full time employees. Owing to the fact that the gig economy is characterised by little to no regulation, several experts are highlighting how this could potentially lead to exploitation of gig workers.

Thus, like most phenomena, the gig economy comes with its share of risks as well as rewards. It has certainly led to the transformation of India’s work culture, with increased flexibility and autonomy, doing away with the traditional relationship shared between the employer and employee. In a developing country like India, the potential of the gig economy is yet to be seen, as platforms like Uber and Swiggy provide employment to lakhs. The question about the sustainability of such a form of work remains unanswered.

Picture Credits: hrdailyadvisor.blr.com / Stas_V / iStock / Getty Images

 



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