Risks without rights: India’s gig economy imbalance

The formalisation of platform-led work must be backed by universal rights, including minimum wages.

A few years ago, outside the Transport Commissioner’s office in Bandra, thousands of Ola and Uber drivers staged a protest. Their demands were modest: better fares, fair commissions, humane working hours, and some protection against arbitrary penalties.

The official response was revealing. The Commissioner reportedly told them he had no jurisdiction. They were not “employees” but “business partners”, entrepreneurs running their own micro-enterprises. Had they been old-style taxi permit holders, he might have been able to help them, since the applicable rules were clear. That moment was a wake-up call. Not just for cab drivers, but for millions of workers who suddenly discovered that while they bore all the risks of work, they enjoyed almost none of its protections.

What we today call the “gig economy” is often portrayed as a new phenomenon born of apps and algorithms. In reality, it is an old Indian phenomenon, wearing a digital mask. Nearly two decades ago, the Arjun Sengupta Committee on the unorganised sector documented a striking fact: close to 64% of the workers in the unorganised sector were self-employed, and thus did not have an identifiable employer. This is because they worked for multiple principals over short spells. They were self-employed, casual, piece-rate workers –construction hands, home-based workers, street vendors. Today’s gig workers are their technological descendants.

So why are gig workers protesting now, and doing so in a far more organised way? Because the scale and intensity of platform-mediated work have changed the nature of dependence. Take cab drivers. Recent protests in Mumbai saw nearly 90% of app-based cabs go off the roads, with drivers demanding fare parity with black-and-yellow taxis, a cap on commissions, welfare boards, and state-level gig worker legislation. Similar anger simmers among food-delivery workers, warehouse pickers, and instant-commerce riders. Nationwide strikes have demanded a minimum monthly income, regulated work hours, and social security.

At the heart of the unrest is a simple asymmetry. Platforms insist workers are independent entrepreneurs and business partners. Yet the platforms decide prices, allocate tasks, impose penalties, deactivate accounts, tweak parameters, and constantly change rules through opaque algorithms. Workers, meanwhile, invest their own capital – vehicles, fuel, smartphones, insurance – and absorb all the downside risk. They do not even have accident cover from the employer, which would be the equivalent of workplace injury cover. This asymmetry cannot be termed as entrepreneurship. It is unfair risk-shifting from the big to the small.

The defence offered by platform CEOs is familiar: better a precarious livelihood than no livelihood at all; over-regulation will kill innovation. There is some truth here. India needs jobs, and platforms have undeniably expanded access to work hugely. But this argument confuses flexibility with insecurity. A labour market that only creates livelihoods by stripping workers of basic protections and making them more vulnerable is not a sustainable growth model.

Historically, labour movements were organised around factories and identifiable employers. Gig workers lack both. They are, in a literal sense, employer-less. This is precisely why their collective action matters, and in some ways, was inevitable. Their organisation is emerging not despite their legal status, but because of it.

When delivery workers log off en masse, or cab drivers strike, they are asserting a fact that the law has been slow to recognise: economic dependence matters more than contractual labels. Courts and regulators are beginning to see this.

The tide is also turning globally. The UK Supreme Court classified Uber drivers as “workers” entitled to minimum wages and paid leave. Spain’s Rider Law treats food-delivery riders as employees. Other countries have created intermediate categories – neither full employees nor pure contractors – but with enforceable floors of rights. International evidence converges on one point: flexibility need not mean a vacuum of rights for the workers.

A shift through labour codes

India has taken an important first step through the implementation of the four labour codes, especially the Code on Social Security, 2020. For the first time, gig and platform workers are recognised as a distinct category, eligible for State-designed social security schemes. Draft rules now propose thresholds – 90 days of work with an aggregator, or 120 days across platforms – to qualify for benefits such as insurance and health cover.

This recognition is progress, and it matters. Registration through e-Shram, welfare boards, and contributory funds, such as levies on platform turnover, can create a portable safety net. States like Rajasthan and Telangana have moved faster with dedicated gig worker legislation.

But we should not overstate what has been achieved. The codes stop short of core labour rights: minimum wages, limits on working hours, collective bargaining, or strong protections against arbitrary deactivation. Social security remains largely discretionary and scheme-based.

As the economy grows and formal enterprises expand, employment has paradoxically become more informal. If India’s future of work is increasingly platform-mediated, formalisation cannot mean necessitating that everyone will have standard employment contracts, i.e. jobs. It must mean extending a universal floor of rights – minimum pay standards, safety, insurance, due process – to all workers. Seen this way, gig worker mobilisation is not anti-growth. It is pro-institution. It is a demand that markets be embedded in rules, that innovation can coexist with dignity. The Sengupta Committee argued long ago that growth without security breeds vulnerability and resentment. That warning echoes loudly today.

The pendulum swung too far in celebrating flexibility while ignoring power. It is now swinging back, slowly and contentiously. The challenge for policymakers is not to kill the gig economy, but to civilise it. If India can manage that balance, the gig economy could become a bridge to a more formal, inclusive labour market, rather than a cul-de-sac of permanent insecurity and precarity. That would be real innovation.

(The writer is an economist; Syndicate: The Billion Press)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.