Emerging Gig Economy: Opportunities & Challenges for Job Creation

Over the last few decades, internet and telecom connectivity spread across the world at a sustained pace. However, the COVID-19 pandemic has given technology solutions an unprecedented acceleration. In 2020, there were 622 million active internet users in India, and it is further poised to increase in the next three years, rising to 900 million by 2025. Pandemic related lockdowns brought gig and platform workers, an invisible but essential workforce, into the fore, as people the world over relied heavily on online platforms for essential services. Digital labour platforms have become integral to contemporary life. They have spurred once-in-a-generation innovation, competition, and productivity and created unprecedented opportunities for workers, businesses and society. At the same time, they pose new challenges to decent work and fair competition.

Globally, digital labour platforms have mushroomed in the past decade, from around 142 in 2010 to over 777 in 2020. Of these, eight per cent of all gig work platforms were based in India in 2020. The country’s digital economy, along with the information and communication technologies (ICTs) sector, contributes over 13 per cent to the GDP, while the government aims to enhance it to 20 per cent by 2025. Since the pandemic began, online retail, gig work and other forms of self-employment services have risen exponentially. The meteoric rise of these platforms has generated interest in policy circles, especially in the G20 and BRICS ministerial meetings.

Since 2015, the ILO has worked on gig and platform work-related issues. In 2019, the International Labour Conference (ILC) adopted the ILO Centenary Declaration for the Future of Work, which underlines the need to respond to challenges and opportunities arising in the world of work, especially those relating to the global digital transformation of which gig work is a part, for promoting sustained, inclusive, and sustainable economic growth, full and productive employment and decent work for all. This was further reaffirmed when in 2021, the ILC adopted the Global Call to Action for a human-centred recovery from the COVID-19 crisis. It acknowledges that safe and healthy working conditions are fundamental to decent work, including the new modes of employment brought about by the internet and teleworking.

The ILO’s 2021 flagship report, “The role of digital labour platforms in transforming the world of work”, provided a broad overview of how these platforms are restructuring work. Through extensive surveys and interviews conducted with 12,000 workers in 100 countries and about 85 businesses worldwide from multiple sectors, the report comprehensively covered the global opportunities and challenges workers and employers face. For example, skills utilization and inadequate availability of reliable digital infrastructure are some challenges workers and employers face, respectively. However, SMEs have particularly benefitted from location-based platforms, and digital platforms have also supported the growth of startups and even heralded the reorientation of some sectors.

A distinct difference between gig work in developed and developing countries has emerged in the varied research which the ILO has conducted on this topic. In developed countries, gig work supplements a worker’s primary income. However, in developing nations, it is the worker’s primary income source. In India, the two main reasons driving the rise of digital labour are the lack of alternative employment opportunities and the pay these platforms offer is better than other forms of employment.

ILO’s latest World Employment and Social Outlooks Trends Report 2022 presents that the rise in gig work is expanding the pool of self-employed contractors. Across several developing nations, self-employment already accounts for nearly 50 per cent of employment. The low barriers to entry and the domino effect of the job-loss crisis brought on by the COVID-19 pandemic are some reasons that will propel gig work’s further expansion. However, while these platforms have the potential to create new and tailor-made work arrangements, especially for certain workers, such as women, persons with disabilities or young people, they are replete with challenges.

Digital labour platforms offer varying levels of autonomy and flexibility in working conditions, but workers miss out on the benefits of traditional workplaces like wage protection and standardization, paid leaves, and collective bargaining, among others. Moreover, the work flexibility and variable wages that are initially attractive can translate into long hours and impact work-life balance as workers need to put in more hours to earn living wages.

The governance on these platforms is unilateral. Exclusivity clauses, a fee charged for accessing the platform, deactivation of workers’ accounts, performance management at the platform’s discretion based on digital tools and algorithms that run the risk of coded biases based on gender, ethnicities, and physical abilities can further disadvantage workers from accessing the labour market which is already precarious. The work and work processes are changing through these platforms, and they are shifting the responsibility of investing in capital assets and operating costs onto the workers. The lack of a physical workplace makes it near impossible to ensure workplace safety and puts workers in vulnerable situations. The lack of these traditional benefits makes gig work an insecure form of employment, especially in low- and middle-income countries. There is an urgent need to protect workers irrespective of their employment status, which requires a coherent and coordinated international effort.

Foremostly, the entire digital labour ecosystem will benefit from clarifying some of the regulatory uncertainties and reinforcing that universal labour standards apply to all workers, irrespective of their contractual status and of which country the worker is based in. Like all other workers, platform workers are entitled to basic human and worker’s rights, to access minimum and fair wages, to enjoy a workplace free from violence and harassment, to have good working conditions, to access social protection, and be protected against discriminatory conduct and unsafe workplaces among other benefits.

Digital labour platforms and the employment they offer will soon become a ‘new normal’. These challenges must be addressed to harness the fullest potential of technological advancement and digitalization to create a future of work that provides decent work for all and sustainable enterprises, as delineated in the Centenary Declaration and Global Call to Action. India’s Code on Social Security, 2020 envisages amending and consolidating the existing labour laws and extending them to a wider array of workers, including gig and platform workers. This is important as workers outside of traditional employee-employer relations will get covered under adequate social protection measures, keeping up with the changing world of work.

Globally, workers, enterprises, governments and the international community need to reach a consensus on ensuring the classification of workers’ employment status in accordance with national classification systems; ensuring transparency and accountability of the algorithms to workers; ensuring platform and self-employed workers have the freedom to enjoy collective bargaining without fear of reprisal; and ensure that all workers, including platform workers, have access to adequate social security benefits, by extending and adapting policy and legal frameworks where necessary.

The article is by Ms Dagmar Walter, Director, ILO Decent Work Technical Support Team for South Asia and Country Office for India and it was first published in the second issue of CII ARTHA, May 2022.

Latest Post

Share to...