India's Gig Economy: Long Hours, Low Pay and Missing Labour Protection

Chennai: While the gig economy is growing fast, the workers are not even recognised by the labour codes, except Social Security Code. However, code also has not been implemented and the health coverage under Ayushman Bharat also remains in paper. The algorithm-controlled gig work makes the workers toil for 12-14 hours a day for meagre average earnings of Rs 18,000 a month after the operating costs. While social security and labour law protection is needed, the government should also provide the youth opportunities for skill upgradation and career progress, finds Dharmendra Kumar, Founding Secretary of Jan Pahal, an organisation working for the rights of gig workers.

In your opinion, what are the main issues faced by gig workers in India?

The first question is whether gig workers are recognised as workers in the true sense. If they are workers, they should be entitled to the same labour rights available to other workers under Indian labour laws. Unfortunately, the traditional employer-employee relationship has been challenged in the platform economy. While the Social Security Code, 2020 recognises gig workers, the other three labour codes—the Industrial Relations Code, the Occupational Safety, Health and Working Conditions Code, and the Wage Code—do not. As a result, the debate has so far been limited to social security rather than comprehensive labour rights.

The Social Security Code recognised gig workers in 2020. What tangible benefits have they received over the past six years?

The implementation has been delayed because state governments first had to frame and notify the rules. That process has taken nearly six years. Although the rules have now been notified, implementation is still awaited. Even today, there is considerable discussion within the government on what kind of social security should be provided and how it should be delivered. These fundamental questions remain unresolved.

Will the Social Security Code solve most of the problems faced by gig workers?

The Social Security Code addresses only one aspect—social protection. It does not regulate working conditions or employment practices. Traditionally, workers in the organised sector received benefits through the Employees' Provident Fund Organisation (EPFO) and the Employees' State Insurance Corporation (ESIC), covering areas such as healthcare, disability, maternity benefits, unemployment support and pensions. However, these systems are contributory and assume a single employer. Gig workers often work for multiple platforms simultaneously, making the existing framework unsuitable without significant modifications.

One possible solution is the creation of a dedicated Social Security Board for gig workers, as envisaged under the Code. Such a board could design mechanisms for extending social protection while developing a sustainable funding model involving platforms and other stakeholders.

What are the biggest gaps in accident insurance, health insurance and pension benefits? What is the status of Ayushman Bharat coverage for gig workers?

Road accidents are a major risk for delivery partners and ride-hailing drivers. While many platforms now provide some form of insurance, these policies differ widely and lack standardisation. There is a need for a minimum national standard for insurance coverage.

The government's announcement to extend Ayushman Bharat health insurance to gig workers was an important step. However, implementation has not yet begun. Identifying eligible beneficiaries and creating an effective claims mechanism remain major challenges. The Labour Ministry has indicated that the e-Shram database will serve as the foundation for rolling out these benefits.

Millions of gig workers have registered on the e-Shram portal. Beyond registration, what benefits are they receiving?

At present, registration itself does not provide any immediate benefit. The government wants all gig workers to register so that their identities can be verified and future welfare schemes can be delivered efficiently. More than one million platform workers have already registered, but the real benefits, including Ayushman Bharat, are still awaiting implementation. Workers cannot afford to wait indefinitely for essential social protection.

How do platform algorithms work against gig workers? Should companies be legally required to explain how algorithms allocate work and determine incentives?

Algorithms control almost every aspect of a gig worker's life—from order allocation and incentives to ratings and even deactivation. The current system lacks transparency and often penalises workers without explanation. Ratings directly influence earnings because lower ratings can reduce order allocation and incentives.

The incentive structure also encourages excessively long working hours. Many workers remain logged in for 12 to 14 hours simply to earn enough to survive. If they work only eight hours, they often receive too few orders or fail to qualify for incentives. This is why there is a growing demand for a minimum wage guarantee, ensuring workers receive at least the statutory minimum wage for the hours they are available for work.

Can algorithms become more worker-friendly?

Yes, but only if they become transparent and fair. Today, customers can rate workers, but workers cannot rate customers. Accounts are sometimes suspended or blocked solely on the basis of customer ratings without giving workers an opportunity to explain their side. In any employment relationship, natural justice requires notice, an opportunity to respond and due process before termination. Gig workers deserve similar protections.

Do we need stronger labour laws specifically for the gig economy?

Absolutely. At present, India has no comprehensive central law governing the working conditions of gig workers. Among the four labour codes, only the Social Security Code mentions gig workers. The remaining three codes do not recognise them at all. As the gig economy expands rapidly, labour regulations must evolve to protect workers while supporting innovation.

What are the average earnings of gig workers? Should India introduce a minimum earnings guarantee?

Surveys show that more than 70 per cent of gig workers work for over eight hours a day. Many work between 12 and 14 hours every day, seven days a week, simply to earn between ₹25,000 and ₹30,000 a month. However, this is not their take-home income. They must pay for fuel, vehicle maintenance and parking charges themselves. After accounting for these expenses, many workers earn less than the prevailing minimum wage. In fact, many report monthly earnings below ₹18,000 despite extremely long working hours.

A minimum earnings guarantee that factors in operating costs would provide workers with greater financial security.

Most gig workers are young. How does this affect their long-term career prospects?

Most gig workers are between 18 and 40 years of age—the most productive years of their lives. Unfortunately, many become trapped in a cycle of long working hours and low earnings, leaving little time or opportunity for skill development. Some begin gig work as students but eventually become full-time workers without progressing into higher-value occupations.

India must ensure that this demographic dividend is not confined to delivery services and ride-hailing. Gig workers should receive opportunities for skill development, financial support and entrepreneurship so they can move into better-paying jobs or build their own businesses.

Who should take responsibility for this transformation?

The government must play the leading role. The objective is not to oppose the gig economy, which is an important and growing part of India's economy, but to regulate it in a way that benefits everyone. Affordable commercial spaces, easier access to finance and support for entrepreneurship can help gig workers transition into business owners, manufacturers or service providers. Many successful examples already exist where workers have become vendors for e-commerce platforms or established their own enterprises.

The gig economy is here to stay. The challenge is to ensure that it creates not only convenience for consumers but also dignity, security and sustainable careers for the millions of young Indians who power it every day.