BY- IRA SRIVASTAVA, 4th year student at NLU Delhi
Contents
Introduction & Background
The “gig economy” corresponds to “Industry 4.0” and the “Future Work” – all commonly used terms in today’s environment. Platform work refers to work being sourced and provided through a platform which connects demand to immediate supply. The platform is understood as an intermediate or “middleman”. However, by terming the workers providing their labour via platforms as “partners” or “service providers” or “independent contractors” and other like terms, platforms tend to skirt their responsibility towards the workers. This is despite the fact that in many cases, “partners” are actually full-time workers.
Gig workers are not squarely covered under any piece of legislation except the Social Security Code, which has not been implemented yet. In 2017-18 the estimate was that nearly 91% of employment in India was informal. The NITI Aayog estimated that in 2020-21, 77 Lakh Workers were engaged in the “gig economy”, expected to grow to 2.35 Crore by 2029-30.[1] This implies that about 77 Lakh workers in the country presently are not given rights under a dedicated legislation. Human capital is often regarded as the “greatest” asset for developing countries.[2] This necessitates taking good care of the workers on whose back the economy will be built in the years to come. The BCG in its Report[3] noted that the gig economy has the potential to contribute to up to 1.25% of India’s GDP in the long-run.
The central idea is not to legislate and codify everything. However, the lack of codification of even basic securities opens the possibility of exploitation, endangering even basic dignity. Against this background, it becomes important to examine the on-ground demands and their viability to be converted into policy. While complete codification cannot guarantee efficiency, some level of State regulation and intervention is essential to protect workers, the lack of which has the potential to cause and propagate neo-bondage.
This piece will examine the gaps that arise preventing legislation and effective action on the subject. It will then go on to briefly examine the empirical and scientific evidence on the subject, the laws introduced and assess the viability of the proposals that have been made.
Lacunae in Law
Ministries & Regulators
Workers in India are governed by the Ministry of Labour and Employment, which would mean that platform taxi workers will also be included within their ambit. Since the platforms in question are mobile-based applications, the input of the Ministry of Electronics and Information Technology is a necessity. These applications due to their nature potentially risk the data privacy of both consumers as well as service-providers. Further, given the nature of services provided by platform taxi workers necessitates the input of the Ministry of Road Transport and Highways. Clearly, there is no one Ministry to govern platform taxi workers. The input of all of these Ministries will be required and responsibility cannot be fixed easily.
Jurisdiction & Legislations
List-III of the Seventh Schedule to the Indian Constitution deals with the Concurrent List – subjects on which both the Centre and the States have powers to legislate. Entry 23 of this List reads, “Social security and social insurance; employment and unemployment” while Entry 24 reads, “Welfare of labour including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits” and Entry 25 reads, “Education, including technical education, medical education and universities, subject to the provisions of entries 63, 64, 65 and 66 of List I; vocational and technical training of labour”.
Given the Constitutional structure of our Federalism, Central Laws often overpower State legislation and the Constitution itself states that in the Concurrent List, if the Centre and State legislate conflicting laws, the Central law will prevail. This often creates tension and raises the hurdles and obstacles in effective implementation of schemes for the purposes of the three entries listed above.
A Start to the Journey Ahead
Pursuant to the 2nd National Commission of Labour Recommendations, the Central Government has initiated the process of consolidating Labour Laws into “Labour Codes”.[4] The Social Security Code 2020 is significant to the extent that it defines gig workers and accordingly provides for the Central government to “introduce social security schemes for workers” including gig workers. It also divides work such as life and disability cover and maternity benefit schemes to be framed by the Central government and benefits like provident fund and housing and educational schemes to be introduced by State governments. Yet the Code comes with its own set of challenges, which have been highlighted later in this paper.
Horney[5] pointed out as long ago as in 2016 that the emergence of the gig economy has given rise to a model that is not covered by traditional labour laws and is potentially dangerous because of the lack of safeguards for workers. This stands true even today. By describing their workers as “Partners”, platforms escape their responsibility to provide many benefits to workers. Further, they argue that the lack of fixed hours of employment and no physical location of employment implies that their “Partners” are not employees, and a lot of benefits are not extended to them.
During the COVID-19 pandemic and subsequent two lockdowns, gig workers including platform taxi workers were at the frontline, being the only form of transport for many and even transporting workers like doctors and nurses to their place of work or for delivering essential goods. Yet, they were neither afforded the status of “frontline workers” nor the benefits and protections that came with it. Moreover, since their earnings are determined by the work done during a certain period, they often had to make a choice between risking their lives and foregoing income.[6]
Facets of the Debate
The rise of a new kind of work has brought with it novel challenges including the complex interactions between various dynamics, some of which have been outlined below.
Stakeholder Consultation
The stakeholder consultation currently involves dialogues between State regulators and platform aggregators. Their scope should be expanded in order to get a truly holistic picture of what goes down in the sector. The State Regulators must include the Ministry of Electronics and Information Technology, Ministry of Road Transport and Highways and Ministry of Labour and Employment at the very least in case of platform taxi workers. In the case of other industries, their specific Ministries would also be involved. For example, the Ministry of Health and Family Welfare in the case of food delivery services like Swiggy and Zomato. It must also include the relevant regulators depending on the sector like the Ministry of Health & Family Welfare and Food Safety and Security Standard Authority of India (FSSAI) in case of platform food delivery apps. Platform workers or their representatives must necessarily get a seat at the table. Then there need to be platforms in order to assess what is actually feasible. Along with platforms, venture capitalists also must be part of the stakeholder consultations. Most startups, which these platforms are, are funded by venture capitalists. It is arguably high time they are questioned on the kind of deplorable labour conditions that are emerging by pumping this kind of money into the economy.
Technology side of the debate
This refers to the far-reaching implications that a technology-based work forum has. The data privacy of workers is at risk with no robust mechanism in place for the protection of their data, a lot of which is personal data – compulsory to be shared while registering on the app along with photos to be submitted. The recent passing of the Digital Personal Data Protection Bill, 2023 is a promising step towards the protection of personal data but its implementation will be a significant tell of its effectiveness. Further, algorithmic manipulation is a reality. Platforms must be held accountable for it and the way to do that is by first figuring out how it is done.
The Model
Ola and Uber work on a “commission model”. This means that the platform gets a cut of the amount paid by the consumer for the ride. Currently, the commission rate in India is around 25-30%. So, for example, the ride costs Rs. 100. Rs. 25-30 will go to the platform and the remainder Rs. 70-75 will go to the driver. Out of this Rs. 70-75, the driver has to pay for costs of maintaining the vehicle – like fuel costs and servicing costs and the remainder is what goes in their pocket. Often, the amount left after accounting for such maintenance costs is nominal and very often does not meet minimum wage requirements.
The Advent of Ola/Uber took place against a favourable background. Initially, both these platforms did not charge any commission in order to attract traffic to the platforms. This incentivised people across professions to enter the segment. Using a rather common skill which people already possessed or could learn at a nominal cost (driving), they were promised high earnings. Seeing this as an opportunity, many left their day jobs and began working for these platforms. The platforms require that drivers arrange for their own cars or vehicles to be driven. So, non-owners took loans both at reasonable as well as exorbitant rates to buy a car and earn their living. Over time, the pay received from these platforms was not high enough to be able to help with the loans. In fact, many drivers face hand-to-mouth existence today.
The Union Movement of Gig and Platform Workers in India holds high value in terms of the bargaining power it holds and the manner in which it challenges dominant narratives.
Policy, Reports & Evidence
Fairwork Project
A leading voice in the field of policy-making for platform labour welfare has been the Fairwork Project. The project operates across 30 countries[7] and evaluates the working conditions of digital platforms and ranks them based on their 5 principles of fair work[8]:
· fair pay
· fair conditions
· fair contracts
· fair management
· fair representation.
The Fairwork project is a purely academic, non-partisan project that aims to collect data, which will in turn be the tools used for demanding a decent living to platform workers. The aim is two-fold – to articulate problems and challenges of the sector and to publish reports which will trigger discussions in the public domain.
There are many obstacles and hurdles which lie in the way of collecting such objective data and then using it meaningfully. It is pertinent to note that not all platforms operate in the same manner. Sectoral differences reflect in scoring variations.
The Fairwork Project rates platforms on a scale of ten – 2 points for each fair principle. The first point is for meeting basic requirements while the second point is awarded if the platform goes over and above to meet the fair principle towards its workers. It is disheartening to note that both Ola and Ober scored zero in the Fairwork India Scores 2022.
NITI Aayog Report
As the government’s official Policy Think Tank, the NITI Aayog Reports reflect the government’s attitude on certain issues. While the 2022 Report on the Gig Economy makes important acknowledgments, it is silent on major policy decisions. There is no commitment on wages, industrial disputes, safety of workers, health hazards posed, application of relevant labour Acts. It remains silent on key issues of operational mechanisms. However, it must also be noted that the very fact that the Report has an estimate and not a defined value of the number of workers is reflective of the challenges faced in documenting the sector.
The Report is significant in terms of the fact that there has been a recognition of gig workers by the government’s Official Policy Think-Tank, but its real impact will be seen in implementation and how its recommendations play out.
Current Standing
Existing laws
Most existing laws granting social security benefits are for employers and employees. Recognition of platform taxi drivers as workers will make them eligible for the application of such laws to them. In the time period that the Social Security Code 2020 is not implemented, the existing laws will facilitate the benefits given to “employees”.
Efforts already made
Certain steps have been taken towards welfare of workers. This part outlines some of the key efforts and briefly analyses them.
Social Security Code 2020
The Code comes with its own challenges, the first of which is that it has not been implemented and operationalised. Only one set of rules has been notified under it and that in itself is grossly inadequate for smooth functioning. Not much can be assessed, when details vis-à-vis implementation remain to be introduced. The release of crucial details about operation and functioning of the Code is awaited. The Concurrent framework of the Constitution presents its own set of challenges. There have been efforts at the State level in Rajasthan, Maharashtra, and Tamil Nadu but these are nowhere near enough. Further, the definitions laid down in the Code present conflicting pictures. Platform taxi workers definitely lie outside the traditional employer-employee relationship and so will be “gig workers”. The driver works over the medium of an online platform, making him a “platform worker” too. Because of the nature of employment conditions, and the terminology of “partner” or any such equivalent term indicating independence, the driver will also be an “unorganised worker” because of the connotation of self-employment. Evidently, definitions overlap but there is nothing in the Code to clarify how the conflict will be resolved or how schemes applicable to multiple categories will apply to overlapping categories.[9] The 2019 Bill had similar provisions. Upon examination, the Standing Committee on Labour put forth the following recommendations:
a) the definition of “unorganised workers” be expanded to include “gig” and “platform” workers.
b) the definition of “gig worker” to be more specific.
c) the definition of “platform worker” to be expanded to include potential future models of work.
Only the last suggestion seems to have been incorporated.
Filling the Gaps in the Code
After the erstwhile Unorganised Workers Social Security Act (UWSSA) came into force in 2008, multiple gaps in the system were highlighted but little has been done to address those problems in the Code. For instance, national and state advisory boards only play a facilitative, advisory role and do not have any real powers. Further, the district administration is tasked with registering unorganised workers, but a lack of enforcement mechanism gives little ground to hold them accountable. The Code talks about building Workers Facilitation Centres (WFC) to help with registration and information to identify beneficiaries of a scheme, but the lack of accountability stays.
At present, social security schemes have different minimum thresholds to be applied to workers. This implies that benefits accorded are heavily dependent on wages received. The Working Group on Labour Laws and Other Regulations suggested in 2011 that a national level “minimum benefit policy” must be formulated and implemented – that should be applicable to ALL workers. This is in line with international norms and the SDG targeting poverty eradication. ILO Recommendation 204 also recommends implementing “minimum social security guarantees to facilitate the transition from an informal to a formal economy.” Including something on these lines in relevant Rules will be greatly beneficial.
Rajasthan State Act
In the 2022 Budget Session of the Rajasthan Assembly, the State Government of Rajasthan announced a Rs. 200 Crore allocation for gig workers. Subsequently, in the Monsoon Session of the Legislature, the Assembly passed a Bill for social security for gig workers, passing “The Rajasthan Platform Based Gig Workers (Registration and Welfare) Act, 2023”. It accords certain rights to gig workers including individual registration and unique IDs, thus taking a right step in the direction of consolidating data for beneficiaries. Another key feature is the setting up of the “Platform Based Gig Workers Welfare Board”. Appointees to this Board will include two representatives each from gig workers and aggregators nominated by the Rajasthan government. The downside to this is that the government will enjoy too much control over the Board by way of controlling appointments. Another key feature of this Act is a charge (per cent of transaction amount) which will be levied on the aggregators towards a social security and welfare fund. The number (percentage) will be notified by the state government. While it is high time aggregators are charged for the welfare of their workers, there must also be a mechanism to ensure that this charge is not conveniently passed on to the consumers.
It must be noted that this is a state where State Assembly Elections are due later this year. Such a hurried action from the state government reflects the potential of hasty work in a bid to woo electoral vote banks, as labour remains a major vote bank in any country today. The existence of the Act in itself is promising but much remains to be seen as far as implementation mechanisms and implementation itself is concerned.
Delhi Policy Committee
An aggregator policy was released by the Government of NCT Delhi. It proposed legislation of bike taxis. It also had tight rules for aggregators of passenger services (like Ola and Uber) and delivery service providers (like BlinkIt, Swiggy and Zomato). The main objective behind this was to transition to electric vehicles (EV) by 2025. It must be noted that EV infrastructure is not too developed in India and running costs for the same would be very high. Further, this Policy faces uncertainty as all experts, consultants and advisers working on the project were terminated.[10] Moreover, these policies had been placed in public domain to seek comments but there has been no update on what suggestions have been put forth and which ones have been accepted.
Uber v. Aslam
In the recent 2021 UK case of Uber v. Aslam, the Court ruled that the test of supervision and control does not only imply that the supervision must take place by a person, but it can also be through an app. Uber as a platform was held to be an employer for the purposes of the corresponding Minimum Wage Act in UK. Although the case is not binding as precedent, it must be used as a guiding beacon. The Court, in the petition filed by IFAT, must recognise similar principles. However, it is also acknowledged that the Court has a limited role to play. The problems highlighted above are mostly societal in nature and so should the solutions be. The first step to securing any meaningful rights for platform taxi drivers is recognising their status as workers. It is illogical and absurd to purport that drivers working for a majority of their day, mostly for over twelve hours at a time are mere “partners”. The recognition of the worker status should ideally come from the platforms themselves but may require a policy or legal nudge in the right direction.
Proposed solutions- Assessment of Viability
Multiple solutions have been suggested in the recent past in order to deal with some of the problems highlighted above. This section aims to analyse the practicality of some of the main proposals and attempts to give feasible alternatives where viable.
Estimation Research
The NITI Aayog Report is an illustration of the necessity for having reliable data points. The first step to effective implementation of any policy is making decisions based on measurable, tangible variables which show results. Currently, databases are maintained for each scheme by the government ministry responsible for its implementation. An effort must be made towards consolidation of such data. The Code proposes the establishment of Workers Facilitation Centres (WFC) for this purpose. The NITI Aayog in May 2023 released a Report on Best Practices in the Social Sector.[11] The idea behind this Report was to identify successful schemes across the nation, which are structured in a manner that they can be replicated at the national level. The Farmers Registration and Unified Beneficiary Information System (FRUITS) of Karnataka was one such recognised scheme for the registration of farmers. If replicated at the national level for gig and platform workers, it will help in bridging the gap that currently exists. Using WFCs as links in the supply chain for such registration drives will significantly fast-track the process.
Skill Development
Lack of skill due to initial attractiveness is a point of concern raised across the board. It is widely known that platforms conduct a training session at the beginning to train drivers to use the app. They can incorporate some basics of training at such a forum. Moreover, the Ministry of Statistics and Programme Implementation (MoSPI), which is tasked with tracking the implementation of Sustainable Development Goals (SDGs) has come up with a National Indicator Framework (NIF). SDG 8 is to “promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”. One of the ways to achieve this target is by skill-development, which the government at the State-level should take up, keeping in mind the specific local challenges.
Eradicate forced labour
Indicator 8.7 and 8.8 of the NIF read, “Take immediate and effective measures to eradicate forced labour, end modern slavery and human trafficking and secure the prohibition and elimination of the worst forms of child labour, including recruitment and use of child soldiers, and by 2025 end child labour in all its forms” and “protect labour rights and promote safe and secure working environments for all workers, including migrant workers, in particular women migrants, and those in precarious employment” respectively. These are promising indicators, and must be incorporated within policy in order to have an impact.
Fair deal agreement
In the recent years, the cosmetics and garment industry have implemented what is known as the “Fair Deal Agreement”. According to this, manufacturers outsourcing their production, particularly parts of production which involve manual labour, are directly responsible for ensuring that certain standards are maintained and exploitation does not take place otherwise they are held liable. A similar model must be worked out for Venture Capital Investors who invest in the platforms that are running operations in India.
Contract of agreement
Currently, there is no articulated demand for having a contractual agreement for fear of loss in flexibility. This can be tackled by having two sets of frameworks – one for full-time workers and one for flexible working hours. This contract should set out some basic things in writing like working hours, working conditions, wages, benefits like insurance and so on. Per Section 10, Indian Contracts Act 1872, “All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.” By this, any agreement that would be in contravention of legal protections granted would be void ab initio. The Labour Commissioner should notify the requirement of contracts of agreement at the earliest.
E-shram Portal
According to a Starred Question Answer in the Rajya Sabha in 2021, the Central government launched the e-shram portal in August 2021 in order to create a registry of unorganised workers in the nation. This is done on a self-declaration basis. As on 2nd December 2021, a little over 7 lakh workers had been registered. While it may be a good start to data collection and collation, it is just about 10% of NITI Aayog’s estimates. Moreover, this same statement acknowledges that no scheme has been introduced for the implementation of the Code.[12]
Cost Compensation
The operational costs should be compensated by the platforms. In most industries, it is standard practice for the employer to bear operational costs. In the beginning, there should be a formula for sharing these costs in some ratio, which should eventually move to 100% costs being borne by the platforms.
Platform Fee
Swiggy, a food and allied services delivery giant, has recently begun including a Rs. 2 “platform fee” on its food delivery service in major cities including Bengaluru, Mumbai and Delhi. However, this fee is levied to “operate and improve our (Swiggy’s) platform and enhance app features to deliver a seamless app experience”[13] and not for worker welfare. As a giant delivering 1.5 million orders per day, Swiggy will have a significant corpus at its disposal for business development. This is yet another example of exploitation – charging an excess fee to consumers for developing business when working conditions remain deplorable.
Independent App
For quite some time now, there have been calls for a government-run app – similar to platforms like Ola and Uber, but which do not charge a commission. In November 2022, something on these lines was launched in Bengaluru – Namma Yatri – for ride-hailing of autos. It has been funded by Juspay and is an app that connects drivers to commuters directly. Because it is direct, no commission is charged and the payment goes directly to the auto drivers. While this eliminates the problems that come with middlemen, it still faces challenges of its own. For example, the price per ride is higher than the prices charged by Ola and Uber and many consumers, especially the ones travelling farther distances have cost as a key consideration in deciding their preferred platform for ride-hailing. The connectivity across the city is still not established. The availability of drivers remains a problem. There is chatter that Juspay will introduce a subscription model for the drivers in order to grow the app. That is not likely to yield desirable results. In 2016, a union of “kaali peeli” taxis in Mumbai decided to launch an app. They even offered discounts but failed. Around the same time, a few taxi drivers in London had the same idea to save their black cabs. They asked drivers to pay a subscription fee. It failed too. These are just two prominent examples that come to mind. Neither is to support the argument that Namma Yatri or a similar app for cabs will not succeed but both are examples to illustrate that in case of apps like these, sustainability is a challenge with no solution in sight.
A new app in the market is “In-Drive”. The app currently charges no commission. However, it must be noted that after adverse experiences with Ola and Uber, there exists a general mistrust towards any new apps which even though claim no commission currently, are estimated to do so in the future, that too at rapacious rates – whether that is true or not. Moreover, the app works on a model where the customer offers a price for a ride and the driver suggests a rate as well. When the two match or come reasonably close, a ride is provided. However, this comes with an additional task of bargaining – often seen as a burden.
Concluding Remarks
Uber entered the Indian market as a wolf in sheep’s clothing. This reeks of a colonial hangover mindset. The East India Company too entered presenting an opportunity and the British went on to rule India for nearly two centuries. There is no doubt that platforms have generated employment opportunities for people from all walks of life. However, the working conditions that have been created as a result are deplorable and unenviable. A balance needs to be struck between the two because the current conditions are practically modern-day slavery perpetrated by modern-day neo-colonialism.
Change can be effected only when the three prongs – social movement, policy and legal – work together. At present, neither prong can independently come up with a solution because they are each working with different considerations as their end-goals. Coming together will ensure efficiency, avoid repetition of work and provide a more comprehensive outlook. There are many alternatives but their feasibility needs to be assessed against practical considerations. The Social Security Code 2020 is a first step but there is a very long way to go to secure the basic dignity and rights of platform taxi workers in India. Both the government and the employers – platforms – must treat the wellbeing of the workers with high priority and not look at it merely as a compliance cost. When workers are satisfied, they will work at their full potential and ultimately help the employer (platforms in this case). This along with other psychological factors should be kept in mind while trying to formulate a policy that is effective and meaningful.
[1] “India’s Booming Gig and Platform Economy: Perspectives and Recommendations on the Future of Work”, NITI Aayog, 25 Jun 2022, niti.gov.in/sites/default/files/2022-06/25th_June_Final_Report_27062022.pdf
[2] Keith Hansen, Fred Matiang'i, and Lutz Ziob, “Human Capital: The Greatest Asset of Economies on the Rise”, The World Bank | Opinion Piece worldbank.org/en/news/opinion/2017/04/03/human-capital-the-greatest-asset-of-economies-on-the-rise
[3] Rajah Augustinraj, Vikash Jain, Seema Bansal “Unlocking the Potential of the Gig Economy in India”, 30 Mar 2021, Boston Consulting Group Report media-publications.bcg.com/India-Gig-Economy-Report.pdf
[4] Point 5, REPORT OF THE SECOND NATIONAL COMMISSION ON LABOUR WITH EMPHASIS ON RATIONALIZATION OF LABOUR LAWS AND UNORGANIZED LABOUR, Ministry of Labour and Employment, labour.gov.in/sites/default/files/39ilcagenda 1.pdf
[5] Nick Horney, “The Gig Economy: A Disruptor Requiring HR Agility”, 2016, https://www.shrm.org/executive/resources/people-strategy-journal/Summer2016/Pages/gig-economy.aspx
[6] Balwant Mehta, Arjun Kumar, Journal of Development Policy Review (JDPR) Vol. 1, Issues 1 & 2, January-March/April-June 2020 ISSN 2693-1427
[10] Delhi’s cab, bus aggregator policies hit as experts, consultants removed | Delhi News - The Indian Express
[11] NITI Aayog, “Best practices in social sector: A compendium 2023”, 1 May 2023, Best-Practices.pdf (niti.gov.in)
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