BALANCING FLEXIBILITY AND SECURITY: REDEFINING THE GIG ECONOMY IN INDIA
- Legal Services GNLU
- May 16
- 6 min read
Updated: Jun 9
By Mohammad Samid Rahman & Pratiksh Sharma
1. Introduction
Since 2020, there has been a new term prevailing in the Indian economy: the Gig economy. It can be defined as a short-term flexible working work arrangement that helps in providing the work according to the choice of the Companies like Swiggy, Zomato, and Uber have transformed the traditional employment pattern in India, offering the workers independent working according to autonomy and flexibility of the person according to their own choice. In providing autonomy and flexibility, there lies the reality that gig workers do not get the fundamental protection against financial instability and exploitation. This article critically delves into the dichotomy between flexibility and security in the gig economy, emphasising the urgent need to provide benefits to gig workers while maintaining autonomy.
2. The Rise of the Gig Economy
Since 2020, all over India, there has been a rise in the number of gig workers because of the sudden disruption in the job market. The advancement in technology has helped to attract more people to work in this sector. Companies like Uber, Zomato, and Swiggy emerged because of the technology advancements. Due to technological advancement and disruption in the job market, a new sector has emerged that now gives employment to a large section of the people in India.
As per the report of NITI Aayog, the workforce in the Gig economy will reach 24 million by 2029-30, which is roughly 4 per cent of the total workforce. The growth is happening because of the rise in the use of smartphones, affordable internet prices, and the rise of app-based platforms. Worker gets the flexibility of timing, independence from the office setup, and the ability to supplement their income. However, this model poses the challenge of concern about labour rights and economic equity.
3. Flexibility: The Promised Boon
The biggest feature of the gig economy is the flexibility it offers to workers, allowing them to determine their schedule, choose tasks, and diversify their income. This model is beneficial for those who are unable to commit to traditional full-time roles, such as students, homemakers, and individuals who seek supplemental income.
The gig economy decentralised opportunities by reducing barriers to entry to enable people from diverse socio-economic and educational backgrounds to engage in the workforce. The lack of traditional employment protection, such as health insurance and retirement benefits, leaves the workers exposed to risks and instability. The flexibility comes at a cost, with limited bargaining power because the platform maintains unilateral control over work. Thus, what appears as flexibility often masks precariousness, necessitating systematic intervention to balance autonomy with security.
4. The Flipside of Flexibility Security
One of the most striking features of the gig economy is its flexibility, but this comes at the price of economic insecurity. One of the most pressing challenges faced by gig workers is financial instability, which in many ways perpetuates inconsistency in income, demand, and institutional protection that is absent from them. The income in the gig economy is highly volatile and is dependent upon market demand and the competition algorithms adopted by the platform. For example, Zomato and Uber riders who order Hailing drivers and delivery men wait for Peak hours’ incentives and bonuses. They are always in suspense because these incentives are affected and very subjective to the frequent changes based on the Policy in the platform. Proceeding in this manner, flexibility can make it more difficult for gig workers to devise a cut-to-spend plan.
Disparities in the gig economy increase economic inequality by failing to guarantee minimum wages. Unlike traditional workers, gig workers do not have a minimum wage safety net in low-demand times or during times of economic downturn. This exposure was glaring, particularly with the COVID-19 pandemic, as many workers found their revenues had dropped without a safety net to which they could fall back. Such instability will not only mean a reduction in earnings for a worker but might also roll back on other essential services like education and health. Addressing such an issue would require a robust framework that guarantees fair pay, reduces out-of-pocket expenses, and ensures the stability of income.
4.1 Lack of benefits
The most glaring disparity between traditional income and the gig economy is the lack of benefits for gig workers. Regular employees enjoy health insurance, paid leave, and workplace safety. Gig workers are typically classified as independent contractors, which leads to their exclusion from receiving such fundamental benefits, which leads to them vulnerable to risk and uncertainty. The COVID-19 pandemic has exposed the condition of gig workers who lacked health insurance, paid leave, and safety nets despite being essential for frontline workers. Without these benefits, they faced heightened risks and financial insecurity.
5. Balancing autonomy and protection.
The gig economy flourishes on flexibility and autonomy, but its long-term viability requires addressing workers’ vulnerability. Maintaining the balance requires providing essential protection like fair wages, health benefits, and social security, without compromising workers’ independence. Adopting innovative frameworks like portable benefits, transparent algorithms, minimum guarantees, and platforms can help foster equitable outcomes. This approach helps to ensure that gig workers enjoy both the freedom to choose their schedule and the security needed for a suitable and dignified livelihood.
6. Global Lessons for India.
India can learn from the global initiatives to regulate the economy. The bill aimed to benefit, but the benefit retained its contractual status with limited benefits. The European Union (EU) has led to proposed legislation to define gig workers as employees and statute and ensure algorithm transparency. To tackle the problem of the gig economy, the UK introduced a hybrid workers’ category, providing gig workers with the assurance of a minimum wage and paid leave without the full employee classification. India adopted the Social Security Code (2020), which helps to extend benefits such as accidental insurance to gig workers, due to inconsistent implementation and inadequate funding hindering its effectiveness. These provision shows the path for India to adopt balanced reforms in India’s gig economy.
7. Proposed Solution for India.
India’s gig economy needs a regulatory framework that balances workers’ protection with flexibility. A middle-ground classification like the UK workers category can provide basic benefits such as minimum wage, health, and paid leave. Portable benefits tied to workers, not employees, can ensure continuity across the platform. The platforms must guarantee fair minimum wages, implement transparent payment structures, and provide algorithm transparency to prevent exploitation. Strengthening the Social Security code by implementing public-private collaboration is crucial. Encouraging collective bargaining can empower gig workers to negotiate better conditions and compensation. These measures may create a fairer gig economy while preserving flexibility and dynamism.
8. The Road Ahead
To secure the future of the gig economy, systemic vulnerabilities must be addressed to build an equitable framework. Whilst advising the local authorities, the developers and influencers must strike a careful balance between innovation and global best practices. Flexibility, one of the defining hallmarks of the gig economy, has to be exercised alongside protection so that workers do not have to choose between autonomy and security. The goal should be to allow gig workers to earn a dignified living that is viable yet appealing. India stands an excellent chance of taking the lead in rethinking gig workers in the sustainability context for all stakeholders. Urgent action is needed to enable a balanced and inclusive gig economy.
9. Conclusion
The gig economy has been described as a potent force transforming the employment landscape despite the flexibility and independence it has brought. However, the model remains challenged by myriad problems, especially for gig workers without access to guaranteed paychecks, benefits, protections, and other forms of economic security. The appeal of flexible schedules often conceals the systemic vulnerabilities that workers face; many receive an irregular income with limited bargaining power as a result.
Despite this, a fair and sustainable gig economy must work out a middle-road solution towards creating a regulatory regime in India. Drawing from experiences, the UK’s hybrid worker definition and the EU-intended algorithmic transparency can help promote such goals, ensuring that while the gig worker is protected by minimum standards of earning, health benefits, and social security, they remain an independent worker. Measures such as portable benefits, guidance for direct application of the Social Security Code, and encouraging collective bargaining are priorities requiring due attention for equitable reforms.
The way forward requires collaboration with regulators and platforms, ensuring systemic gaps are bridged. India has a pioneering opportunity to be the model for a redefined gig economy that is not only innovative but also inclusive. Workers’ rights should be protected, and by ensuring dignity in livelihoods, the potential of the gig economy can be maximized for the mutual advantage of all stakeholders.
Keywords: Gig economy, labour rights, flexibility, economic security
References
7. https://www.americanprogress.org/article/raising-pay-providing-benefits-workers-disruptive-economy/.
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