A big part of India’s unfolding growth story is the digitisation of commerce and service-provision that has resulted in platformisation; an eco-system made possible by gig economy workers.

With a projected 23.5 million gig workers in India by 2030, it would not be an overstatement to term them the key economic players going-forward.

However, lack of adequate social security for these workers — considered outside the traditional employer-employee arrangement — punctures these prospects. We propose a three-pronged approach to extend social security to the gig workers on-demand via apps.

By adding a separate section on ‘gig economy’, the Code on Social Security (2020) took a significant step forward in adapting policy language to the reality of the labour market. It imposes an obligation on gig employers to contribute to a Social Security Fund to be handled by a government-led board. But the rules are yet to be framed by the States and not much has moved in terms of instituting the Board. These should thus be taken up expeditiously by the government.

Govt schemes

We have a well thought-out pathway of policies on social security for the underserved segments. With little tweaks, some social security provisions for informal workers can be extended to gig workers. Consider PM-Jan Arogya Yojana that automatically excludes people owning two, three or four wheelers. There is no consideration given to the fact that owning a vehicle is a work-necessitated measure for gig workers. The PM Shram Yogi Maan-dhan scheme too can be extended to gig workers if the income ceiling of ₹15,000/month is increased.

Strong support for these workers should come from the gig companies that themselves benefit from this agile and low-cost work arrangement. While the popular practice is to classify gig workers as self-employed or independent contractors, in practice, this may not be appropriate. For, companies use an array of performance-control measures ranging from simple didactics to deactivating their accounts and rules that forbid them from entering into direct contracts with clients. A similar precedent is set by the UK Supreme Court ruling that Uber drivers should be categorised as workers with rights to minimum wage and paid holidays.

Few firms in India provide on-work accident insurance. This should be taken up by all employers. With respect to health insurance, some apps provide options for workers to sign up with designated third-party insurers on a subscription model. This, however, does not seem to be enough given their low health coverage. Helping workers save for a rainy day or retirement should also be taken seriously by companies.

One way this could be done is through minimal voluntary contribution by customers per order/booking that could go into a corpus fund much like business trusts handling their Employees’ Provident Fund.

Innovative design

What, however, makes the roll-out of such provisions a herculean task is the nature of the sector. Blurred boundaries between self-employment and dependent-employment, and freedom to work for multiple firms or pull out at will, make it difficult to determine the extent of company obligations towards gig workers. Careful assessment will thus have to go into determining thresholds to make workers eligible for benefits.

If implemented transparently, these could also incentivise workers to put in a certain number of hours, or complete a stipulated number of deliveries, or contribute to a certain value of business, depending on the determined eligibility. Such an arrangement would also be in the interest of the employers.

Pokharna is associated with NITI Aayog. Abrol is a Doctoral Researcher at University of Bonn, Germany. (The author(s) thank Abhishek Modak for his inputs)