The gig economy thrives largely unregulated, offering little job security and few benefits to workers. (Mint)
The gig economy thrives largely unregulated, offering little job security and few benefits to workers. (Mint)

Delhi, and not Bengaluru, is the place to be for gig economy workers

  • Delhi added 560,600 people to its gig economy in the six months to 31 March, an 88% jump from 298,000 people in first half of FY19
  • The number of migrant workers joining Bengaluru’s gig economy rose 29% to around 252,300 in H2FY19 from 194,400 in H1FY19

Bengaluru: Delhi has emerged as the top destination for migrant workers joining India’s tech-enabled gig economy, pushing startup capital Bengaluru to a distant second spot.

The capital city added 560,600 people to its gig economy in the six months ended 31 March, an 88% jump from the 298,000 people it attracted in the first half of the last fiscal, data from human resource firm TeamLease Services shows.

Meanwhile, the number of migrant workers joining Bengaluru’s gig economy rose a moderate 29% to around 252,300 in the second half from 194,400 in the previous six months.

The gig economy, led by food delivery firms Swiggy and Zomato, and ride hailing firms Uber and Ola, thrives largely unregulated, even as drivers and delivery boys work with little job security and few benefits.

R. Srinivasan, professor of strategy at the Indian Institute of Management, Bengaluru, said heightened migration and readily available job training at hyperlocal delivery companies had helped more migrant workers take up gig economy jobs.

“The speed at which you can convert a migrant into a skilled worker has gone up. In fact, we can see that Delhi has some 1.3 million Ola and Uber drivers. It took eight years for Ola and Uber to do this, while the entire Indian IT industry employs around 4 million people," added Srinivasan.

In total, around 1.3 million Indians migrated to five cities—Bengaluru, Delhi, Hyderabad, Mumbai and Chennai—in the six months to 31 March, TeamLease said, registering a 60% growth in migration compared to the six-month period ended 30 September.

Even as the two top political parties’ election manifestos have made space for the budding startup economy and its entrepreneurs, the gig economy, which has transformed how people dine and travel in big cities, has not done enough to protect the interests of gig economy work, said industry experts.

While some policy experts argue that there is a need for the next government to step in and implement radical changes in labour laws, some say regulating emerging startups would cause turmoil.

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“The gig economy in India with respect to workers not getting any social security, insurance, etc. is an extension of India’s informal labour, which has been prevalent for a long time and has remained unregulated," said Mansi Kedia, economic and policy researcher at the Indian Council for Research on International Economic Relations. “However, now, with the tech companies coming in, there is data available on who these people are, where they are working, etc.—making it a possibility to enable job security."

An estimated 56% of new employment in India is being generated by the gig economy companies across both the blue-collar and white-collar workforce, according to Rituparna Chakraborty, executive vice-president of TeamLease.

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“Blue-collared workers are not covered by the obligations under labour law and do not receive any statutory benefits, including safeguards such as a minimum wage," added Chakraborty. This apart, companies are not expected to provide health or insurance benefit, she added.

“The reason why companies won’t directly employ drivers on the payroll is because of legal liability issues. For example, if a customer loses a phone, or something of big value, or, say, in case of theft, the legal liability is on the company’s directors," a lawyer aware of operations of gig economy companies said, on condition of anonymity.

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He added that the best way forward for governments would be to implement tax rebates and concessions that can be passed on directly to drivers or delivery partners as health or insurance benefits.

However, some experts say that this would directly affect prices of service delivered to the end customer. “They (food delivery and cab companies) will say that drivers and riders are now getting more incentives than before, so they will treat it as an expense, and increase prices of service delivery," added Srinivasan.

Pointing to Uber’s decision to give out equity shares and cash bonuses from its upcoming IPO, Srinivasan said that such plans seem more effective than directly regulating startups.

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