Solving the issue of Urban employment through platform/gig economy

Synopsis– With no urban equivalent to the NREGA as yet, there must be a focus on supporting new forms of urban employment in the form of the gig economy.

Background- Debate around GDP contraction and V-Shaped recovery has ignored the prevalence of unemployment in India.

Data from the Centre for Monitoring Indian Economy points to a gradual slowdown in employment recovery which is evident from the fact that national unemployment rate has been increased from 6.51% to 9.06%.

How does the rural economy provide better employment compared to urban? 

For the labour population moving back to rural India, National Rural Employment Guarantee Scheme (NREGA) provided employment support, which witnessed a 243% increase in person workdays.

Whereas many Indian cities, during this pandemic, shut down the employment avenues for millions of workers, who either migrated to rural areas or took up new forms of platform work. Gig economy became their only source of employment. 

What is the Gig Economy? 

A labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.

Performance of gig/platform works   

The Fairwork Foundation published its report related to the gig economy and its annual review of platform labor gains prominence. It used the following metrics to evaluate the wellbeing of gig workers.

  1. Fair Pay 
  2. Fair Conditions
  3. Fair Contracts
  4. Fair Management
  5. Fair Representation


In this report platform giants, namely, Uber, Ola, Swiggy and Zomato are at the bottom of the ranking. Only Urban Company and Flipkart scored fairly.

How to increase urban employment? 

As in Urban India, there is no scheme like NREGA.  Government must focus on evaluating, regulating and supporting platform/gig employment.

  1. Issue of evaluation
    • Current understanding regarding the scale and impact of these platforms is only based on the limited disclosure by the companies themselves.  
    • Moreover, there exists no authoritative estimate on the total number of gig workers in India.  
    • There is a need to create a valid database regarding platform works and workers to facilitate evaluation.  

2. Issue of regulation– This step is significantly more sensitive as it revolves around the variable nature of gig work.  

    • As these platforms are used both as a “side hustle”, and primary source of employment.  
    • One-size-fits-all regulatory strategy further complicates the matter as regulations might also hurt the freelancing works that provided avenues to highly skilled workers during Pandemic.  
      • For that, Government can enter into partnerships with platforms like it did by flagship scheme. Swiggy’s Street Food Vendors programme under the PM SVANidhi scheme.  
      • Under this scheme, Swiggy employed 36,000 street food vendors and also ensured the registration of each vendor and their certification by the Food Safety and Standards Authority of India.  
      • The simultaneous creation of jobs, alongside the voluntary adoption of quality standards is an example of a mutually beneficial partnership between the state and a platform. 

3. Urban employment –  

    • Similar collaborations can be done by the government for urban employment, that require labour platforms to comply with disclosure norms and worker compensation standards to access government support.
    • It would not only bring down costs significantly (for both the state and their partners), but would also create an environment where firms would be more likely to cooperate with the state.

Way Forward 

India must take significant steps to tackle the challenge of urban unemployment in the present reality.

With Industry 4.0 platforms absorbing increasing numbers of the urban workforce, the government must focus on evaluation, collaboration, and regulation. 

By now, India must have its own understanding of the future of work. For that, the state needs to ensure that this future is defined not only by the quantity of jobs it creates but also by the quality of livelihoods they provide for.

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