GIG ECONOMY SUCCESS BASED ON EXPLOITATION NOT TECHNOLOGY WORKERS CLAIM VIOLATION OF FUNDAMENTAL RIGHTS

The basic premise of the business model of a gig economy is having a large pool of workers at
all times. This large supply of workers is then matched with fluctuating demand for services. The
ever-expanding supply of workers then leads to increased competition and willingness to work at
a low remuneration. The platforms can then provide services at low prices, which helps them
undercut their competitors and create its own monopoly in the market.

The mode of engagement being in the nature of “freelancing”, the workers are not considered
employees of the company. Hence, they can be assigned a task as and when the demand arises.
In situations of low demand, the workers can keep themselves logged in to the platform, which is
virtually of no cost to the company.

Members of the civil society, who are generally unaware of how the gig economy operates, may
now have the advantage of a report which explains this and makes other revelations as well. The
report was released by The Peoples Union for Democratic Rights (PUDR) on Wednesday, titled
“Behind the veil of algorithms: Invisible workers”. Prepared in view of the growth of the gig
economy and gig workers engaged by companies such as Swiggy, Zomato, Ola, Uber, Urban
Company and Amazon, the report is based on a fact-finding investigation conducted over
September to November this year.

The report examines the business model of the gig economy and examines the issues that affect
gig workers in Delhi NCR. The PUDR team spoke to workers in Ola, Uber, Swiggy, Zomato,
and Urban Company; consulted technical experts and official company publications as well as
independent academic studies and reports; examined judgments by courts in India and overseas;
and spoke to organisations attempting to mobilise gig workers across the country.

Of late, demonstrations have been carried out by gig workers against their work conditions, such
as the Swiggy workers’ strike in September 2020 and the Urban Company women workers’
strike in October. An anonymous Twitter account, @DeliveryBhoy, also interviewed by The
Leaflet, was using the social media platform to highlight the plight of gig workers.

A public interest litigation (PIL) was filed before the Supreme Court in September, urging the
Court to direct the Union Government to extend social security benefits to “gig workers” and
“platform workers” engaged by Uber, Ola, Swiggy and Zomato. Filed by the Indian Federation
of App-based Transport Workers (IFAT) along with a taxi-driver working for Ola and an
unemployed former Ola and Uber worker, the petition was admitted by the Supreme Court on
December 13.

In the next three-four years, India’s gig economy is all set to triple and has the potential to touch
up to 90 million jobs in the next eight to ten years, in the non-agriculture sector alone. In terms
of volume, it could transact over USD 250 billion worth of work and hence, contribute at least
1.25% to India’s gross domestic product (GDP) in the long term. According to the trade
association and advocacy group Associated Chambers of Commerce and Industry of India, India
is expected to have 350 million gig jobs by 2025.

Further, the company is also not responsible for the number of hours of waiting time between
orders. Additionally, the tools required for a task (such as vehicles, appliances, devices) as well
as the skills (such as knowing how to ride a motorcycle or drive a car, or the skill set required for
professional services from coding to cleaning and beauty services) is a prerequisite. This
significantly reduces the costs incurred by the company.

The low wages, coupled with low costs, enable the company to offer services at attractive prices
to the consumers. Consequently, more and more customers end up logging in to avail the
“cheap” and “speedy” services, which makes it worthwhile for the large number of workers to
on-board themselves on such platforms.

A well-known tactic employed by the companies is to provide considerable incentives initially –
to the customers and the workers. Once a large number of workers are on-boarded in the
business, these incentives, especially those extended to the workers, start being reduced. This
was confirmed by almost all the gig workers interviewed by PUDR as well as media reports (on
Uber, Swiggy, and others). Another important component of the business model is the
structuring of the contracts. First, although the company executives arm themselves with control
similar to that of an employer, or a factory manager, they present themselves as “brokers” or
“mediators”. This enables them to escape labour regulation and shirk responsibility and liability
towards the workers.

Second, the narrative of the business model of a platform economy is to fix the “personal
responsibility” on the gig worker. Even when the customer rejects the completed service, gives
poor ratings or negative comments, or even cancels the booking, the burden may be borne by the
worker.

Third, many of the companies incorporate clauses preventing the workers from contacting or
servicing the customers directly. Fourth, a percentage of the workers’ earnings are deducted as
“commission” by the company. This practice exists even though the company decides the
charges for providing services to the customers, and most gig workers have no control over the
pricing.

Fifth, there is extensive use of technology, algorithms and ratings used to monitor and control the
performance of the gig workers. Such workers are constantly under continuous surveillance and
control of the application, digital and physical. Non-compliance or even refusing tasks can often
lead to deactivation from the application, akin to a “termination of employment” in the
traditional sense.

In the recent PIL filed by IFAT before the Supreme Court, the workers have claimed a violation
of their fundamental rights to equality and life, and their right against forced labour. The PIL has
also prayed for gig or platform workers to be considered as “unorganised/wage workers” under

the existing labour laws, and seeks health insurance, pension, education and housing allowance
and disability allowance, among other welfare and security benefits for the workers.

The report concludes that the success of the gig economy is not based on the oft-claimed
technological innovation, but on “age-old exploitation of labour”. The three key elements of the
model can be summed up as (1) mis-definition of workers as freelancers to evade labour laws
and shirk off responsibilities, (2) ensuring a large reserve of workers to enable competition and
lower prices, and (3) charging of commissions for “matchmaking” services provided by the
companies.