Gig worker crisis following reduced earnings and flexibility points to need for legal protection

In June, Bengaluru witnessed a protest by aggregator platform Urban Company’s women workers in the beauty segment, categorised as “partners” or “independent contractors” by the gig economy.

The protest mostly stemmed from the company’s decision to bring in new terms of service without consulting workers which impacted their ability to remain flexible, a much touted benefit reiterated by the gig economy. Later the same month, following along the lines of Rajasthan’s legislation that was passed in July 2023, the state government invited suggestions on the Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024.

Varsha*, a beautician with the platform for over four years, was worried after her access to the platform – or her “ID” – was blocked when IndiaSpend met her in mid-July. A veteran with experience of more than a decade, she had earlier run a salon which she was forced to shut due to the Covid-19 lockdown and reduced footfalls. Now a gig worker, she was not sure how long she could sustain given the company’s decision to auto-assign jobs on behalf of workers without their approval or choice.

“We do not [presently] get leave like employees do. I had a few cancellations due to health and personal reasons, and now I have been blocked,” said Varsha, a premium Luxe category worker in the beauty segment who was worried about not getting work on the platform. Work-related tension and anxiety was a factor for her ill health, she said.

Two other colleagues from West Bengal, Seema* and Sindhu*, have quit the platform due to the difficulty they face in finding resolution to problems like ID blocking, and the prospect of being auto-assigned work. Seema is a single mother who joined the platform in 2016 when it was called Urban Clap while Sindhu, who joined in 2020, has a young child. The promise of flexible work hours and a decent living wage in an expensive metropolis like Bengaluru lured them into gig work.

While women partners in the beauty segment said that they were initially “very happy” with the earnings, they say it has become stressful to sustain work over the last 12 to 18 months. Women in gig work are earning more and are able to choose their working hours while working with online platforms, IndiaSpend reported in January 2021. But this comes with limited social benefits and less bargaining power as age-old issues of occupational segregation and gender pay gaps follow women into the new platform-based gig economy.

The lack of robust legislation on new forms of labour and employment like gig and platform work, which needs to go beyond issues of social security, have an impact on gig workers – particularly women who have to struggle to remain in the labour force and earn a living wage. With the gig workforce expected to expand to 23.5 million workers by 2029-’30, a three-fold increase from 2020-’21, experts feel that more states will have to regulate work which falls outside the traditional employer-employee ambit of the organised workforce.

Work around labour rights

The government’s eShram portal registers unorganised workers but it does not capture gig worker data separately. There are 1.2 million beauticians and related workers, per the portal’s data. Although this number may not represent the entire universe of workers in the segment, it indicates the scale of employment in a segment that primarily employs women. Urban Company says 40% of their partners are women, and almost all of them work in the beauty category.

A June 2024 blog post by the company mentions the “new order scheduling system” which includes auto-assigning customer orders to partners in their indicated available time slots. It includes three “emergency passes a month”. It also mentions additional flexibility for women partners. “To support them better, we typically offer greater flexibility to them, including offering a ‘flexi-partner model’ which allows a sizable percentage of our women partners to operate without the above restrictions,” it said.

After Sindhu’s mother-in-law passed away a few years ago, her husband decided to quit his retail job to take care of their three-year-old child. “I was earning more than him so we decided that I should work. But lately, earnings have fallen by half and what I finally got in hand after tax at source, payment for [Urban Company] products, travel cost etc. is simply inadequate,” she said. Her husband has started working again recently, after a relative decided to help out with the child, but they are worried about having to go back to one of them working when the relative decides to leave.

Sindhu had to cancel work during her child’s school admission, which eventually led to the company blocking her ID, she said. “They call us partners, but they do not treat us as partners. If we are a partner we should get some benefits [of a partner]. We are like employees, but without any benefits.”

Her friend Seema, who has joined another platform, admitted her pre-teen son to a school in West Bengal because there was no one at home to take care of him when she was away for work. “They told me that my ID would be unblocked, but there was no progress for a month even after I visited the office and contacted them multiple times. I had no choice but to leave as I was not earning anything and had no savings.”

According to a January 2024 analysis of government data by Ashoka University’s Centre For Data and Economic Analysis, 72.2% of men and 23.4% of women in the 20-24 years age-group were part of the labour force in 2022-’23. The gender gap in the labour force participation rate widens in the 20-29 years age-group, where women are most likely to get married and have their first child, it said.

Among previously employed women who are now out of the labour force in the 365 days before the Periodic Labour Force Survey 2022-23, one in 10 women report child care as the reason for exiting the workforce, as IndiaSpend reported in August 2024. Among mothers with at least one child, two in five women report childcare as the main reason.

“Calling gig workers as ‘partners’ instead of ‘workers’ is a cunning sleight of hand and puts a warm and fuzzy feel-good cover to a new form of digital feudalism,” said Rajendran Narayanan, faculty at the Bengaluru-based Azim Premji University.

According to a 2024 International Labour Organization report on platform workers, even as the platform economy gets poised to catalyse economic growth and boost employment levels in the country, life in the platform economy for many workers continues to be precarious, without adequate economic and social security.

Workers said that since Covid-19, there have been financial constraints for the family. Varsha, who started as a Salon Classic Partner and moved to Prime and then Luxe category, said that she may have invested around Rs 1.3 lakh for training and products for each segment over the last four years. She has loans to repay, and even had to pawn her husband’s ring to meet costs. Her husband works as a driver. These categories do not provide any incentive for her, she claimed. Workers have to buy Urban Company brand products and scan it each time they use it to maintain a predetermined product score.

Despite guaranteed earnings, what workers get in hand is lower than before. Some said they have earned more than Rs 1 lakh a month earlier, but it is not the same anymore. “If I get a job lead [on the platform] for Rs 800, after my travel costs have increased since auto-assign, commission and TDS, I may get Rs 400,” said Varsha.

Grievances are not addressed

Gig workers often work more than the ILO-mandated eight hours a day or 48 hours a week. Extended work hours are fairly common in India where 90% of workers are informal. Women workers that IndiaSpend spoke to said that on weekends, they would work up to 13 hours, which includes travel time to customer’s homes or locations and providing the requested service. It is the busiest time of the week, and offers the most opportunity to earn.

But the pressure of maintaining ratings, accepting auto-assigned jobs, having to travel 10km-15 km at their own expense, and the possibility of last minute cancellations at customers' doorstep leading to loss of earnings were significant problems. Rude customers or demand for unreasonable and additional services at discounted rates or even free services are part of the problem. Refusal annoys customers, which translates into bad ratings, workers said.

According to Urban Company’s terms and conditions, workers’ rankings are based on the “descending order of importance”: ratings on the platform, location, number of leads that they have accepted or their response rate to these leads.

Urban Company beauticians said that they were ranked as Gold, Silver or Bronze, with each category requiring that the “partners” maintain a specific rating, limit to a set number of cancellations, maintain weekend hours and a product score. The rewards for each rank category include immunity from blocking for 30 to 60 days, loans up to Rs 40,000, and family health insurance of Rs 2 lakh for Gold partners.

But Nakshatra, who is a Gold partner in the Prime category and a beautician for over 14 years, had her ID blocked because she “had done offline booking”, said the platform application. The app prompts her to go to the training centre to book a training slot and get the ID unblocked. “My phone was switched off and they decided that I am doing offline jobs,” she said. If they switch off location, the app’s built-in voice prompt tells them to keep the GPS switched on to continue getting jobs. Workers said that this was intrusive, particularly when they travel for personal reasons.

Her colleague and friend Selvy, who also protested in June and coordinated with workers, said that grievance redressal was a problem that needed to be addressed, particularly because they work at customer’s homes. “I have had awkward experiences where the customer’s spouse was in the same room when we were waxing,” said Selvy. “If we complain, then customers are rude and give a bad rating that affects our ranking. And the helpline is not at all helpful.”

“Even if the client cancels, the fault is put on us because the company will not question the client,” said Nakshatra. “They casually ask me to do 50 jobs to reverse the cancellation – which means, if I have another emergency and [have to] cancel a job again, I have to do 100 jobs?”

All workers that we spoke to said that they have some form of loan that they have to repay, either acquired from the platform or from relatives. Returning to work in a salon was not viable anymore due to the limited flexibility and lower earnings for nine to 10 hours of work.

In 2023, Fairwork India’s analysis ranked 12 platforms for the work conditions of platform workers based on five principles: fair pay, conditions, contracts, management and representation. Big Basket was ranked at the top with six points of a total of 10, while four platforms including Urban Company received five points.

No platform ticked the second point of the Fair Pay principle, which requires platforms to provide sufficient evidence that workers earn at least the local living wage, said the report. “However, Urban Company has made a public commitment to ensure that its workers earn at least the local living wage after factoring in work-related costs,” it said.

“If you look at the protests, it is clear that the workers' issues are not individual grievances,” said Janaki Srinivasan, co-investigator for the Fairwork project in India. “Complaints pertaining to the process of escalating grievances, or about arbitrary changes to commission rates, are collective issues workers face.”

While platforms may have processes to address individual grievances, these can be onerous and don't always lead to resolutions that workers are satisfied with, she said.

In June 2024, Urban Company founder Abhiraj Singh Bhal is reported to have said, “We are always open to talking to partners one-on-one and explaining our rationale. But we will not talk to people outside the UC community. We don’t recognise them and have no relation with them.”

IndiaSpend wrote to Urban Company for their comment on the new terms and conditions for their partners, the issue of grievance redressal and consultations before making decisions, welfare support for women workers, blocking of IDs, and their response to the Karnataka draft bill on gig workers’ social security. We will update the story when we receive a response.

Fairwork India ratings showed that no platform scored a point for Fair Representation, which recognises workers’ collective voices and freedom to form an association. Despite multiple instances of workers’ protests and strikes across the country and the many legislative changes within the platform economy in 2023, platforms in India have remained unwilling to systematically recognise or negotiate with workers’ collectives, said the report.

Selvy feels that once the state legislation is passed, gig workers like her can demand labour rights better. “We go to people’s homes [unlike Uber or Ola drivers]. We depend on trusting customers and if there are issues, women find it difficult to discuss with family for fear of being asked to stop work.”

Legislation on gig work

As Covid hit the economy and impacted employment and labour, the Union government passed four labour code bills, including three on the same day, in September 2020. The Social Security Code, 2020 was the only one which made a mention of gig work-related social security. But as of now, none of the codes have been implemented.

Although the Social Security code has not come into force, it gives states scope to create a welfare board and register workers and aggregators. “The legislation [will] provide the right [of workers] to be recognised and not be a company’s database. Grievances will have to be addressed by a third party, which aggregators were unhappy about,” said Rakshita Swamy, founder and director of Social Accountability Forum for Action and Research, who was involved in consultations of the bill.

IndiaSpend has written to the labour ministry for their comments on the implementation of codes, their concerts about state legislations on gig work, and the support for women workers in the gig economy. We will update this story when we receive a response.

Rajasthan became the first state in India to pass a gig workers welfare bill. The law mandates a tripartite platform-based gig workers welfare board, tasked with social security for gig workers, registration of workers and aggregators, and ensuring welfare fee deduction mechanism is integrated into the aggregators platform, among others. Other states like Karnataka, Telangana and Jharkhand have also followed up with state specific draft bills and policy.

The Rajasthan Act and the Karnataka bill are futuristic, keeping in mind that the scale of gig work will increase over the next few years, said Swamy. The Rajasthan version has a tripartite board, automatic registration, transaction-based welfare cess, grievance mechanism and a central transaction information and management system, while Karnataka also added algorithmic accountability, fair contract, income security and occupational safety. “This enters regulation while Rajasthan is on social security. We made the remit narrow in Rajasthan instead of an omnibus legislation which would find resistance from aggregators,” she said.

But there have been concerns about the clarity on defining ‘employee’ and ‘employer’ in the case of gig workers who, as we said, fall outside the norm of traditional labour legislation.

“If employer relation is defined all existing laws become applicable. In addition to the welfare board, states can have dispute resolution, if possible through the Industrial Disputes Act which will solve a lot of issues,” said Kingshuk Sarkar, a labour economist and faculty at the Goa Institute of Management, who was a labour administrator in West Bengal for two decades.

Currently, the gig model is an exploitative model, said Sarkar, and added that the Karnataka bill is a small improvement over the Rajasthan Act. “The advantage for the company is that they can deny the employer-employee relation and the worker may not necessarily make an adequate income despite completing multiple tasks.”

Swamy said that the issue of employer-employee terminology is that we are not operating on a clean slate given that we have a Social Security code. “The Union government has defined gig work as those outside the traditional employer-employee relationship,” she said. “So definition in state laws had to be written in a way that it did not conflict with the Union government laws.”

Labour laws are on the concurrent list. While states and the Union government can frame laws, certain matters are reserved for the Union.

Industry was not pleased with parts of the Karnataka bill. National Association of Software and Service Companies, Nasscom, the apex tech industry body, responded to the bill, highlighting that the assumption the bill makes that gig work is like the traditional employer-employee system “risks unsettling the conceptual and legal basis of gig work”.

It also said “onerous and prescriptive obligations” like minimum notice period for termination, algorithmic disclosures, monitoring and tracking mechanism and laying down terms of template contract etc. are “incompatible with the functioning of gig platforms and can adversely impact their operations in the state”.

G Manjunath, additional labour commissioner (industrial relations) in Karnataka, told IndiaSpend that industry has always fought for their requirements and agenda, and a few aggregators cannot manoeuvre hundreds of thousands of gig workers. On the criticism that it explicitly does not define ‘employer’ and ‘employee’, he said that “Under Industrial Disputes Act, an industry is a systematic activity carried by the employer and employee. Gig economy is also a systematic activity carried out between aggregators and gig workers. Can anyone deny it?.”

IndiaSpend has previously reported on issues faced by gig workers and highlighted the precarity of work and lack of social security. You can read some of the stories here, here and here.

Global recognition of gig workers

In 2021, the UK Supreme Courr decided that Uber drivers were entitled to rights as workers, including minimum wage and paid holidays. In January, Reuters reported that the US had issued a rule that “will force companies to treat some workers as employees rather than less expensive independent contractors”.

The European Union Parliament voted to improve gig workers' work conditions, including a new directive where workers “cannot be fired based on a decision taken by an algorithm or an automated decision making system”. Platforms will be obliged to inform workers about the use of algorithms and automated systems in decisions regarding their recruitment, their working conditions and their earnings among other things, said an April 2024 EU Parliament post.

In a 2019 interview with IndiaSpend, Nobel Prize-winning economist Joseph Stiglitz said while there are efficiencies that the gig economy can bring, “...the business model is driven by exploitation and circumvention. We have to maintain the advantages the model offers but at the same time restore more bargaining power and regulate the bad aspects.”

In 2021, a Public Interest Litigation was filed in the Supreme Court by the Indian Federation of App-based Transport Workers (IFAT) to recognise gig workers as unorganised workers so that they can be entitled to benefits under the existing legislation for unorganised workers. It is still pending.

Algorithmic transparency for gig workers has so far been discussed by the EU, and transaction-based welfare fee and tripartite welfare boards for gig workers are unique to the Rajasthan and Karnataka legislations, said Srinivasan. “How an algorithm is decided on, or how it is made transparent to workers, are not easy questions to answer. Algorithms operate as a black box,” she said.

However, the workers have a right to know the factors that lead to them being allocated specific jobs and the factors are dynamic and vary between platforms. “Additionally, if the algorithm blocks a worker's ID, or if it affects a worker’s rating, she often will only have a call back option for getting the issue resolved,” she said.

Narayanan feels that the UK verdict was a landmark and India should aim to emulate it. Gig workers are subject to enormous digital surveillance and control, and having a law with a welfare board involving representation from various workers organisations, trade unions, civil society organisations, government, is of utmost importance. “Importantly, the algorithms used by the aggregators must be subject to a ‘fairness audit.’” he added.

Legislation will help in establishing conditions for women, said experts, including Prevention of Sexual Harassment at the Workplace, PoSH, maternity benefits, creche etc. “Gig work does not come under any labour jurisdiction including PoSH. Aggregators believe customers are right and there is no challenge to it. Self regulation does not work,” said Swamy.

For women gig workers in Bengaluru, it is business as usual for now. The state government has put the bill for consultation with other departments after two other labour bills – on reservation in the private sector and increasing daily work hours to 14 hours in the IT sector – faced backlash from the industry and IT workers.

*Names of workers have been changed to protect their identity.

This article first appeared on IndiaSpend, a data-driven and public-interest journalism non-profit.