Unless regulation keeps pace with technology, flexibility risks becoming synonymous to disposability
The promise of grocery deliveries within minutes has become a defining feature of contemporary urban convenience. Behind this pace, however, is a labour force whose strength has reached 12 million in India, and is expected to grow to 24 million by 2030. The gig economy is now a significant pillar in the Indian labour market, valued at almost $20 billion, and with 12 unicorns.
The promise of flexibility
The most appealing aspect of the gig economy is its potential to address the growing divide between job seekers and jobs generated annually. It offers an entry to the unskilled labour force, particularly in cities and semi-urban regions, where formal employment opportunities are limited, and low-paid individuals can use it to supplement their earnings. Self-employed people, such as beauticians, tutors, fitness trainers, can diversify their revenue streams by offering at-home or online services, which has also promoted the recent rise in the participation of women in the labour force. Moreover, the advent of Tier 2 and 3 cities as gig workplaces is forming decentralised engines of regional development.
In the case of skilled employees, platforms such as Fiverr and Upwork facilitate skills development, international visibility, and multiple income streams. Employees can work across platforms and take time off at will. Firms, too, enjoy operational flexibility, access to specialized skills, and scalability. The gig economy is also facilitating financial inclusion and the EV revolution. According to a Borzo survey conducted in 2023, 75% of gig workers drive electric vehicles.
The most evident form of this ‘Uberization’ of workforce is the ride-hailing and quick commerce industry, the necessity of which was evident during the COVID-19 pandemic. Participation in full-time and flexible part-time arrangements is now possible due to low barriers to entry, which only require a smartphone, a vehicle, and a bank account.
The Flexibility Behind the Precarity
This flexibility, however, has a cost of uncertainty. The food delivery riders’ nationwide strike on December 31 last year and then on February 7 highlighted their working conditions. Opaque algorithms are used to allocate work and declining orders is punished. The 10-minute delivery claim is much hyped, but it endangers the safety of riders, although non-compliance is penalised. While the government has urged platforms to drop promises of super-fast delivery, speed forms the core of the q-commerce framework. Riders are paid per delivery, making speed their survival strategy, regulations notwithstanding.
Payment systems exacerbate insecurity: low wages per delivery, incentives based on delivery time, penalties for late arrivals or insufficient hours logged, unaccounted idle time waiting or commuting, and a vague commission system. This is further compounded by ambiguous systems – “shadow banning” blocks rider IDs, without recourse. Studies by the Competition Commission of India have demonstrated that algorithmic surge pricing, which relies on shared data, like weather APIs, inflates prices on the platforms, without benefiting the riders.
A 2,661-driver IDinsight study discovered that, after factoring out operating costs, drivers receive on average Rs 115 per hour, which is exaggerated by selective logging during surge periods. The ones who work in both peak and non-peak hours earn Rs 75 per hour. Women receive 7% lower pay per hour than men. Compared to 20% in traditional jobs, the gendered wage gap in the gig economy is 30%, as per the Global Gender Gap Report 2024, indicating structural barriers: women's irregular hours, less use of surge pricing, safety concerns, low digital literacy, and limited access to capital for asset ownership.
The health implications are equally daunting. A 2024 PAIGAM-University of Pennsylvania report described gig work as “digital bonded labour,” with 99.3% of drivers reporting physical health problems and 98.5% experiencing mental health issues. Two-thirds spend little or no family/leisure time. Beyond health, riders face lower wages due to outdated toll reimbursement, no fuel cost adjustments, and unexpected statewide prohibitions on using personal vehicles commercially, as in Delhi in 2023.
Despite legalisation of gig work by the Code on Social Security 2020, workers are outside the traditional employer-employee relationship and are largely defined as “independent contractors,” depriving them of insurance, paid leave, overtime, or job security, despite 75-83% already working full-time. The California ABC test (2020) is crucial in this regard, presuming workers to be employees unless companies can demonstrate worker independence. Companies claim to be mere aggregators, yet algorithmic management of work distribution indicates otherwise. In 2024, the Karnataka High Court ruled that Ola drivers are employees, citing the company's control over service delivery.
The Way Forward
Although the gig economy has become a force multiplier of market flexibility and service delivery, it must integrate dignity, equity, and transparency, aligning with ILO principles. Estimated to account for 7% of non-farm employment by 2030 (NITI Aayog), it is important to tackle the issue of working conditions and income security in this field. NITI Aayog’s RAISE framework– recognizing diversity in work, allowing innovative financing, incorporating stakeholders, supporting worker awareness, and ensuring accessible benefits – offers a roadmap, but also demands better data collection, skills mobility, and inclusive work design. The PAIGAM report also suggests commission limits, algorithmic transparency, prohibition of random ID deactivations, and three-way (government-platform-union) bargaining.
Institutionally, the 2026 draft rules on the four labour codes are intended to place gig workers under social security, and mandating platform contributions to a Social Security Fund. There are also schemes like the PM Jan Arogya Yojana, the e-Shram Portal, the PM Shram Yogi Maandhan Yojana and the PM Suraksha Bima Yojana. States such as Rajasthan and Karnataka have legislated to create welfare boards and funds, and require algorithmic transparency, termination notices, and board meeting participation. These, however, do not specifically name platforms as employers and are inadequately enforced. Globally, efforts such as minimum wage requirements in New York and the EU campaign against obscure algorithms are instructive.
Therefore, the paradox of the gig economy is apparent. It is flexible, but it is also founded on uncertainty. Unless regulation keeps pace with technology, flexibility risks becoming synonymous to disposability. The question now is not whether gig work will shape the future of India, but whether that future will be shaped by innovation alone, or by innovation grounded in fairness.
Muskaan Jain is a postgraduate student pursuing Public Policy at the Tata Institute of Social Sciences, Hyderabad.
References
Brailovskaya, V., John, J. S., Sharma, S., & Joshi, P. (2025). Economic lives of digital platform gig workers: Case of delivery drivers in India. IDinsight.
NITI Aayog. (2022). India’s booming gig and platform economy: Perspectives and recommendations on the future of work. Government of India.
People’s Association in Grassroots Action and Movements (PAIGAM). (2024). Prisoners on wheels? Report on working and living conditions of app-based workers in India. University of Pennsylvania Institute for the Advanced Study of India.
