Gig Economy—How Deep Is The Discontent?
They help deliver your food. Connect you to your ride to office. Line up professionals for household chores and maybe even a weekend massage. Or let you find accountants, doctors and lawyers.
Gig economy platforms, which connect users to service providers, have made life easy for many consumers. They have also provided a source of income for those who may not have or want a full-time formal job.
Yet, increasingly, workers on these platforms are seen expressing their dissatisfaction.
Zomato or Swiggy workers protesting exploitation. Urban Company beauticians questioning fee structures. Uber drivers complaining about unfair practices and lack of support amid a pandemic that shut down their business.
Are these isolated instances? Or a sign of wider discontent with the gig economy?
How Deep Is The Discontent?
"I joined the platform two years ago, and it was gratifying in the beginning," said Sanjay, a 31-year-old delivery partner for Swiggy. But the initial euphoria was short-lived. "Now, I work 12 hours a day, delivering 15 to 20 orders, and the total payout usually ranges from Rs 600 to Rs 800 a day. On average, we get Rs 20-35 per order," he told BloombergQuint.
Yet, he has no option. With a sick family member at home, Jaiswal can't afford to leave work, even for a few days. "If I don't work the entire day, there'll be a cash crunch at home."
28-year-old Dhruv joined Zomato after seeing advertisements that promised upwards of Rs 25,000 a month. The reality was different.
"I earn around Rs 13,000 to 15,000 per month after deducting my scooter's fuel and maintenance cost. The most challenging part of the job is to work in sweltering heat or heavily pouring rain," Dhruv told BloombergQuint. But his discontent goes beyond that. He believes the apps are manipulated in a way that work reduces over time.
"I think the app is biased. It gave me a lot of orders when I joined, but that gradually declined," he said "Now, I see the new joiners around me get more orders while I wait for a ping."
Most gig economy workers that BloombergQuint approached were reluctant to reveal their full identity fearing retribution from the platforms.
Apart from slim earnings and lack of transparency on how these apps work, there was another cause of discontent that emerged particularly across food delivery partners—lack of respect from customers, restaurants, and even housing complexes.
"Sometimes, I feel like a slave. Many malls provide us entry via the rear gate only, and the queue for order pick-up at restaurants often crosses an hour on weekends," said Vinay, an Ahmedabad-based Zomato rider. Even months after the second wave, many housing complexes ask us to use a separate elevator or even go by the stairs. "We may be called delivery partners or executives, but everyone just considers us the labour class."
Zomato counters some of this, at least the estimate on earnings.
"In a city like Bangalore, the top 20% of our delivery partners who deliver on bikes and put in more than 40 hours a week receive a payout of more than Rs 27,000 per month. Minus the fuel costs, they take home about Rs 20,000 per month. That's twice the India's average per capita income," said a Zomato spokesperson in response to a BloombergQuint query.
Zomato hiked the salaries of its delivery partners by 7-8% in February due to rising fuel prices. A permanent petrol component has also been added to their pricing structure to ensure consistency. Medical and accidental life insurance is now a standard offering for all, and additional coverage is provided if the partners are affected due to Covid-19. Swiggy, too, now compensates for fuel and provides an expanded health cover, a person familiar with the platform's practices said.
Swiggy declined to respond to BloombergQuint's queries.
Across cab aggregators, the complaints are now well-documented. Long hours, low earnings per ride and, now, the burden imposed by an extended pandemic and high fuel prices.
"I drive 12 to 16 hours a day. And yet, I earn only Rs 500 to Rs 800 per day," Mohammad, a 34-year-old driver with Uber, said. "The latter is possible if most of my trips are short and I can complete 12 to 15 rides in a day. Long trips are not very rewarding because the traffic is unbearable and consumes too much time."
Mohammad is agitated because he has to pay monthly instalments on the car loan. Fuel prices are at an all-time high, further eating into his earnings. And if that wasn't enough, the roads in Mumbai force him to dish out more money for maintenance.
"If you're expecting an air-conditioned journey for 30km within a city for just Rs 500 to 700, then it leaves me with no margin for profit; leave aside better service," he added.
Uber takes 20 to 25% of the total fare as its commission. Ola's commissions are similar. Yet, when times were tough, drivers allege that the companies offered little empathy or financial support.
"It's me doing all the work, and yet they take away almost a quarter of it all," said Rakesh, another driver for Uber in Mumbai. "I'm not against their commission. I just want them to implement reasonable pricing that respects me, provides good service to the customer, and enables Uber to grow as well."
Uber changed its fare structure in July and raised the per-kilometre rate from Rs 10 to Rs 14.7. But reduced the per minute ride charge from Rs 1.58 to 1. Ola follows a similar pricing model, which ranges from Rs 13 to 15 per kilometre.
Uber Technologies Inc. and Ola, operated by ANI Technologies Pvt., did not respond to BloombergQuint's queries.
Urban Company recently found itself facing the ire of beauticians who claimed that the platform’s fee structures were leaving little for them to take home. They also cited unsafe work environment.
The company connects users to a host of professionals—barbers, stylists, carpenter, electrician, plumbers, and more.
"Unlike others, my services boomed amid the lockdowns since restrictions were high and people prefered to get a haircut at home than venture out. But it was short-lived as things went back to normal, rendering my services worthless," said Vicky, a barber who's actively using Urban Company for a year. "I earn Rs 200-300 per haircut after deducting commissions and consumables, while the app charges Rs 500 to the customer," he said.
Deepak, who also gets work through the platform, chooses to look on the brighter side.
"While the commission is high, I don't mind it because a lot of new customers are readily available, helping keep the business going," Deepak, who repairs electronic appliances such as microwaves and refrigerators, said.
As protests came to light, Urban Company said it had brought down its peak commission by 5%.
"Earlier, commissions ranged from 8.5% for small orders to 30% for high-ticket orders. Commissions will now range from 8.5% to 25%. We are also further reducing the maximum cap on monthly penalties per partner per month to Rs 1,500," Urban Company said in a statement. Penalties are accrued when the worker doesn't deliver satisfactory services.
As platforms veer towards more white-collar work, complaints are fewer, if only because those offering their services have a wider array of choices and don't work in inhospitable conditions.
Platforms like Fiverr, Freelancer.com, and more offer new options for many.
28-year-old Sanjeev, who is studying to become a chartered accountant, spends half his day bookkeeping for various clients. Based out of a small town in Bihar, these platforms have opened up a new earning channel for him.
"I earn around Rs 25,000 per month and land about three to four gigs every month thanks to GigZoe," he said. The price depends on the amount of work required. "The flexibility helps a lot because studying is my primary intention, but the pandemic forced me to find a better revenue stream for my family."
GigZoe charges a flat 10% fee.
The platform provides gig-based projects for accounting, web development, content creation, and even social media marketing. "We're focusing on enlisting skilled folks by verifying their credentials and standardising client interactions," said GigZoe's CEO Ranu Gupta.
A broader survey across 10 platforms conducted by WageIndicator Foundation showed that fixed salaries were a very small component and the tasks you do determine the earnings. This puts pressure on workers to put in long hours to make a living.
Is It 'Fair' Work?
The Oxford University's Fairwork project defines fair work conditions across gig economy platforms using the following benchmarks:
Based on these metrics, the 2020 ranking for Indian platforms gave Zomato, Swiggy and Uber a score of 1 on 10, while Urban Company got a relatively high 8.
In the case of Uber, the platform had found that it meets only the minimum wage requirement. Swiggy didn't even meet that requirement and scored its one point for mitigating task-specific risks. Zomato paid a minimum wage but offered none of the other fair-work conditions.
According to Radhicka Kapoor, fellow at Indian Council for Research on International Economic Relations, the discontent can be seen through four lenses.
The most emotive of these is the issue of salaries and whether workers are being exploited.
Typically, payment below the minimum wage standards is defined as exploitation. However, the minimum wage set-up in India is too complex, varies across sectors, and is difficult to enforce, Kapoor said. India does not have a single minimum wage. The code on wages did prescribe a floor but this is yet to be notified.
At present, the minimum wage is decided by states and is based on the amount of time during which work is done, said Aditi Surie, consultant, Indian Institute for Human Settlements. "With digital platforms, the payout is based on per order basis. On an average, a taxi driver earns anywhere between Rs 20,000 and Rs 40,000, while a food delivery agent earns Rs 14,000 to Rs 17,000," Suri said.
Gig economy workers get labelled as contractors rather than employees, which prevents them from getting social-security benefits from the employer. This, according to Kapoor, is not the case everywhere.
"It's unfair to say the workers are not employees because the platform does control everything," said Alok Prasanna, co-founder and lead, Vidhi Karnataka. The partner is entirely dependent on the app, has to follow the practices recommended by the company, has no negotiating power to decide the pay, and even the route is dictated by the company. "How can we not consider them employees," he asks.
The platforms have found a grey area where they can extract value out of the worker as if they are employees, without providing the necessary add-ons such as employee provident fund benefits, social-security options and reliable pay.Alok Prasanna, Co-Founder and Lead, Vidhi Karnataka
Since a platform simply connects a worker with a customer, they absolve themselves of accountability. As such, the burden of instances such as rude customer behaviour, last-minute cancellations or mishaps falls on the worker.
"Platforms have also successfully passed on much of the operational risks involved to the gig worker," said Surie. For example, rude or drunk behaviour by a passenger in a cab, bad ratings by errant users, and more, eventually these issues are left to the worker to handle, she explained.
The final aspect is market insecurity amid an economy where demand for work is greater than supply of work.
Amid the supply-demand unmatch, the market will be in favour of platforms and not the job seekers.Radhicka Kapoor, Fellow, Indian Council for Research on International Economic Relations
Of these aspects, two are under scrutiny.
First, the Code on Social Security states that gig companies will soon have to allot 1-2% of their annual turnover for social security, towards their workers.
Second, a case is now pending in the Supreme Court questioning the labelling of gig workers as contractors and not employees.
The Indian Federation of App-based Transport Workers, along with two individual drivers, have approached the apex court arguing that gig workers should be declared as "unorganised workers” and/or “wage workers”.
"The existing legal framework has no consideration for gig workers as employees and we continue to rely on age-old solutions," said Prasanna. "The workers are unhappy because they want to be part of a basic legal regime that recognises them and provides them a right to demand better. Right now, they're entirely dependent on the company and there's no redressal mechanism."
A Symptom Of India's Jobs Crisis?
But in many ways, the low salaries and unfair working conditions highlighted by gig workers are reflective of India's broader informal economy. Close to 80% of India's labour force works in the informal sector, with little protection on wages or benefits. In the formal sector, unemployment, particularly in the 15-29 age group, was at 24.9%. Even before the Covid crisis, unemployment for young workers was 19%.
A comparison of the estimated monthly earnings of workers across cab aggregators and food-delivery platforms with those detailed in India's Periodic Labour Force Survey also shows that earning levels are not hugely out of line with the realities of the broader economy.
For instance, the periodic survey shows:
The average monthly earnings for wage/salary earners was at Rs 20,098 in 2019-20.
The average monthly earnings for casual labour was estimated at Rs 11,550.
The average gross monthly earnings from self-employment was at Rs 16,759.
The estimated earnings of Rs 14,000-17,000 for food-delivery workers and closer to Rs 20,000 for cab drivers are not starkly lower.
Prasanna, however, argues that more than the money, it is the uncertainty that comes with this kind of work and the lack of transparency in charges that leaves workers discontent.
Psychologically, the apps have a huge toll on the worker's mind because every day is uncertain.Alok Prasanna, Co-founder and Lead, Vidhi Karnataka
The work and work conditions across gig economy platforms are "typical informal work", said Kapoor. "It is more challenging since technology is involved."
Surie agrees. "Since India is an informal sector-dependent country, the industry has witnessed a surge in new-generation companies that are leveraging the same model," she said.
Surie added that it is migrant workers, or those moving out of manufacturing or agriculture, that typically move into these jobs. "The gig economy is a hybrid model that incorporates elements of informal as well as formal economy."
Those working across these platforms aren't unaware of the opportunities they get through them.
"I'm uneducated, and I've spent years as a construction site worker. We only got a fluorescent jacket, a helmet, and a daily wage," said Sanjay. "When compared to those days, this job feels a lot better."
Sanjay is fatalist in his view on whether things will change or not. "It could get better in the future, but we've grown up accepting what we have and don't expect much from anyone."
Vinay's sentiments are not very different.
"My cousins are ploughing a field in a small village not very far away from Rajkot right now. We don't own the land. So that's the only service we can do," he said. As compared to that, working as a delivery boy in Ahmedabad offers much more opportunities, he added.
"I'm hopeful that we'll be treated as equals one day in society," said Vinay. "I've never protested against the company. But if there's a day I have to do it, it'll be for the larger good and not just my own."