Food delivery sees 27% rise in employment, but experts flag a hidden malaise

However, gig workers' representatives and policy experts said these numbers actually hide job distress across the gig economy, where food delivery workers continue to work up to 12-14 hours a day for abysmally low incomes. They said more people engaging in gig work was in fact a consequence of rising unemployment.

Despite accounting for just 0.2% of India’s total workforce, food delivery has emerged as one of the fastest-growing sources of gig work in the services economy. The sector is dominated by Swiggy and Zomato.

These food delivery platforms have become an important source of income for gig workers, particularly urban and semi-urban ones seeking flexible employment, said the report, which studied the impact of the food delivery sector on gig workers and restaurants. Prosus is an investor in Swiggy.

The study estimated the gross value of output (GVO) of the food delivery sector at ₹1.2 trillion in 2023-24, more than doubling from ₹613 billion in 2021-22. Gross value added (GVA) was estimated at ₹476 billion, equivalent to 0.2% of national GVA. NCAER used data from July 2023 to June 2024 for the study. GVO refers to the total turnover of the food delivery sector, while GVA is GVO minus the cost of inputs.

The sector’s GVO grew at a compound annual rate of 17.1% from 2021-22 to 2023-24, while GVA grew at 16.9%, nearly twice as fast as the Indian economy’s growth over that period, it said.

Hidden malaise?

However, Sunand, president of the Rajdhani App Workers’ Union (RAWU), a Delhi-based trade union that represents gig workers said tall claims of employment generation actually hide the distress in employment across the gig economy. “Food delivery workers continue to work for up to 12–14 hours a day with abysmally low incomes and continuous cuts in rate cards by platform companies," he said.

A policy expert, who wished to remain anonymous, told Mint that demand for gig work has increased since covid because of rising unemployment. This person said, “If you look at unemployment figures, especially among educated youth, many are unable to find jobs and therefore turn to gig work. Initially, of course, this was also because these companies were new and had raised fresh capital, which allowed them to offer better wages. Working hours were reasonable as well.

“However, since covid, rate cards and wages for gig workers have declined. This is because these companies are now under pressure to generate profits, and venture capital funding has become less readily available."

India’s unemployment rate for those aged 15 years and above increased marginally to 5.2% in September from 5.1% in August, with joblessness rising in both rural and urban areas. Unemployment in rural areas rose to 4.6% in September from 4.3% in August, according to the latest Periodic Labour Force Survey (PLFS) released by the statistics ministry in October. Urban unemployment rose to 6.8% from 6.7% over the same period, highlighting the strain on labour markets in big cities, Mint reported earlier.

Gig work as a full-time job

Traditionally seen as temporary gig work, food delivery is increasingly becoming a full-time job for people as these platforms become more entrenched across the country, said Bornali Bhandari, a professor at NCAER.

“When we studied this in 2022, we found two broad categories of workers in food delivery—those working five to six hours a day and those working full time. It was roughly a 50-50 split. More recently, the share of full-time workers has increased. This could be linked to rising average order values and higher incomes. Looking ahead, food delivery will continue to grow in terms of GDP contribution and employment, even as quick commerce platforms take a larger share of the broader gig economy," she added.

This increase is despite the fact that gig work is typically poorly paid. While the report did not provide income estimates, the authors noted that real incomes have not risen sharply, largely because of high inflation, particularly in fuel.

Balasubramanian Anantha Narayanan, senior VP, TeamLease Services, estimated that food delivery riders take home anywhere from ₹20,000 to ₹25,000 a month. “Payout structures are also fairly complex because of to a variety of factors such as peak demand, distance covered, time of day and weather," he said.

Bhandari said, “Recent work shows average take-home incomes of around ₹20,000 a month. With fuel costs falling and EV adoption increasing, net earnings have improved. That said, findings must always be contextualized within broader macroeconomic conditions. During the pandemic, platform work became a safety net—almost like an urban MGNREGS (India’s rural job guarantee scheme). As the economy recovered, many workers exited."

NCAER estimated the food delivery sector had an income multiplier of 2.48 in FY24, meaning every ₹1 million of income generated by the sector created ₹2.48 million of income across the economy, driven by both backward linkages and consumption effects.

The sector’s employment multiplier stood at 3 in 2023-24, meaning that for every ₹1 million increase in output from food delivery, three jobs were created in the wider economy. These include indirect employment generated through tie-ups with restaurants, as well as entities providing agriculture, logistics, insurance and allied services.

Easy come, easy go

Bhandari said one reason for the rapid growth in food delivery work is the low barrier to entry and exit. "Anyone fresh out of college or between jobs can join quickly. Training has become standardised, and people can continue to work until they find another job."

She added, “You just need a smartphone, a two-wheeler, and ₹800-2,000 for a delivery kit. Most workers don’t need to pay upfront for a vehicle. Some even use bicycles. They borrow to buy a smartphone and pay it off in EMIs. This makes entry very easy, especially for men. It remains harder for women owing to mobility constraints.".

These workers are typically engaged through third-party staffing firms, with the average age of workers food delivery workers at 29 years, according to the report. These workers came from diverse backgrounds, comprising students, mechanics, hotel staff, marketing workers, and others. The food delivery sector also has a high level of churn—the average tenure of a worker is about 14 months, the report said.

Eternal Ltd (formerly Zomato) had an estimated 473,000 average monthly active delivery partners in FY25, according to the company's annual filing. Swiggy, meanwhile, had 515,000 active delivery partners in FY25, according to its annual report. Both aggregators also operate in the quick commerce market.

Safety net at last

Last month the government rolled out new labour rules that bring gig and platform workers under a formal social security net for the first time. With this, they will be eligible for accident insurance, life insurance, disability benefits, maternity support, and protection in old age.

Under the Code on Social Security, 2020, online commerce platforms must contribute 1-2% of their annual turnover, capped at 5% of payouts to gig workers, to a dedicated welfare fund. The government has also indicated that benefits may be delivered through existing systems such as Ayushman Bharat–PMJAY and state welfare boards.

India’s overall gig economy has grown rapidly over the past decade, driven by online marketplaces such as Amazon, Flipkart, Zomato, Swiggy and Uber. The gig workforce is projected to grow from 10 million in 2024-25 to 23.5 million by 2029-30, according to a Press Information Bureau note dated 30 August.