The rise of app-based gig work — epitomised by ride-hailing platforms, food delivery services, and freelance marketplaces — has been heralded as a revolutionary shift in employment. Promising flexibility, autonomy, and economic empowerment, these platforms have drawn millions into their fold, particularly in countries like India, where the informal workforce dominates. As of 2025, India’s gig economy is projected to employ over 12 million workers, a number expected to swell further with urbanisation and digital penetration. Yet, beneath the glossy veneer of “be your own boss” lies a stark reality: gig work is not the economic boon it claims to be. Instead, it traps workers in a cycle of long hours, meagre earnings, and zero social security, offering no pathway to skill development or formal employment. This precarious model is a ticking time bomb, poised to burden governments with a dependent population over the next 30 years. Are our policies and systems equipped to shoulder this cost?
Gig work’s appeal hinges on its promise of quick cash and flexible schedules. However, data paints a grim picture. A 2023 study by the Fairwork India project found that gig workers, such as delivery agents and drivers, earn an average of ₹15,000-20,000 per month — below the national minimum wage when adjusted for hours worked. These workers often clock 10-12 hours daily, six or seven days a week, to meet basic needs. In contrast, formal sector employees, even at entry levels, enjoy shorter hours, paid leave, and benefits like health insurance and pension. The gig economy’s “flexibility” comes at a steep cost: financial instability.
A 2024 NITI Aayog report estimated that 90 per cent of gig workers lack savings, leaving them vulnerable to emergencies — a sharp departure from the economic security formal jobs provides.
No safety net, no future
Unlike traditional employment, gig platforms classify workers as “independent contractors,” absolving companies of responsibility for social security. This means no provident fund, no health insurance, and no pension — protections that form the backbone of a stable workforce. The International Labour Organization (ILO) warned in 2024 that gig workers globally face a “social protection gap,” with India’s 12 million or so gig workers among the most exposed. For context, a salaried worker contributing to India’s Employees’ Provident Fund (EPF) could retire with a corpus of ₹50-60 lakh over 30 years, while a gig worker, with no such scheme, might retire with nothing. As life expectancy rises — projected to hit 75 years in India by 2050 — this gap will leave millions dependent on government handouts.
Gig work’s repetitive nature — driving, delivering, or performing micro-tasks — offers little scope for skill upgradation. A 2023 World Bank report highlighted that only 5 per cent of gig workers in India acquire transferable skills, compared to 40 per cent in formal sectors like manufacturing or IT. Without training or career progression, gig workers are locked out of formal employment, where demand for skilled labour is rising. India’s ambition to become a $5 trillion economy by 2030 hinges on a skilled workforce, yet the gig economy is churning out a generation ill-equipped to contribute. Over 30 years, this skills deficit could stagnate economic growth, widening inequality as formal workers thrive while gig workers languish.
With India’s working-age population projected to peak at one billion by 2050, the gig economy’s growth is alarming. If 12 million workers today expand to 50 million by 2055 — plausible given current trends — a significant chunk will age out of gig work with no savings or skills. The fiscal burden of supporting this population through welfare schemes could be staggering. For perspective, Budget 2025 allocates ₹2 lakh crore for social welfare. Supporting 50 million ex-gig workers at a modest ₹10,000 per month would cost ₹6 lakh crore annually — triple the current outlay. Are policymakers prepared for this strain, especially as tax revenues hinge on a shrinking formal workforce?
Government responses have been tepid. The 2020 Code on Social Security mandated platforms to contribute to worker welfare, but enforcement remains weak. A 2024 audit revealed that only 15 per cent of gig platforms complied, citing “operational challenges.” Without stringent regulation the gig economy will continue to exploit workers under the guise of opportunity. Countries like Spain, which reclassified gig workers as employees in 2021, offer a blueprint, but India lags.
Policymakers must act now: enforce social security, incentivise skill development, and integrate gig workers into the formal economy.
The writer is Executive Director, Indian Staffing Federation