While the entire world is facing an economic slowdown with the coronavirus and the war in Ukraine, India’s gig workforce is expected to grow to 24 million by 2029-30. Our in-house expert Nigel Pereira is here to take us through the highs and lows of gig economy.
The gig economy refers to an exchange of short-term labor, based on ‘standardized’ outcomes, for money through a transaction facilitated by a digital platform. Examples of digital platforms where you can find a gig include Upwork, Fiverr, TaskRabbit, Handy, and Freelancer. In addition to labor, asset-sharing platforms make up a big part of the gig economy. For example, an Uber driver is sharing his asset which in his case is his car, a food delivery person from Swiggy is sharing his asset which is his motorcycle, homeowners share their assets on Airbnb, and so on.
Disrupting Industries
The gig economy has already disrupted some of the oldest industries in the world like the taxi and hotel industries, and it’s done this by tapping into resources that already exist. By allowing anyone with a car to download an application and become an Uber driver, Uber effectively disrupted private transportation permanently. If you were to tell someone 10 years ago that the biggest taxi company in the world wouldn’t own any taxis, they would think you were having a laugh. Similarly, Airbnb, which is now more valuable than the three largest hotel chains combined, doesn’t own a single hotel.
That’s the power of connecting people, which is essentially what these digital platforms do, they connect suppliers and customers on a short-term basis with a pay-as-you-go model. The pandemic followed by the migration of most employees to a work-from-home setup was a major game-changer in terms of the mindset of employers.
Once everyone realized that there’s virtually nothing that can’t be done remotely, a lot of MNCs turned to flexible hiring options in order to reduce operational expenditure. Since gigs are primarily outcome-based with solid rating systems, there is little to no risk associated with hiring gig workers.
Millennials and Gen-Z
People born between 1981 and 1996 are generally referred to as millennials while those born between 1997 and 2010 are called Gen-Z. Both these generations are known for going against the grain and doing pretty much the opposite of what previous generations expected them to. For example, studies show that both millennials and Gen-Z are a lot less likely to get married or buy a home when compared to previous generations. With reference to the gig economy, in particular, studies show that 4 out of 5 millennials and Gen-Z prefer gig work to 9-5 jobs.
This isn’t really surprising when you think about the nature of 9-5 jobs pre-pandemic and just the struggle associated with getting to work on time, not to mention the traditional interview process which typically has multiple rounds and loads of paperwork. Gigs, on the other hand, are pretty much hassle-free where your work and your ratings speak for themselves and you don’t have to go for an interview, hat in hand. Additionally, since gigs are outcome-specific, workers have the option of working for multiple employers on multiple platforms at whatever time and space suits them.
Job Security
Now it isn’t all sunshine and roses in the gig economy (as with any industry) and there are a lot of questions surrounding job security, benefits, labor laws, pensions, insurance, and the like. While the upside for workers is the fact that the work comes quick and easy with minimum red tape and paperwork, you don’t really get any of the benefits that regular employees get. For example, a delivery person for Swiggy won’t get paid if he falls sick and decides to stay home, or an Uber driver won’t make any money if he has to attend a family member’s funeral.
Additionally, gigs don’t come with health insurance or pensions, or even a PF, which isn’t making it any less desirable since the numbers keep going up. 56% of new employment in India is generated from the gig economy and there are now over 15 million gig workers in India including designers, consultants, coders, cleaners, drivers, bloggers, delivery personnel, and more. While the entire world is facing an economic slowdown with the coronavirus and the war in Ukraine, India’s gig workforce is expected to grow to 24 million by 2029-30.
The Nature of Work
What we’re seeing with the gig economy is a fundamental change in the way we look at work. From a contract that demands you show up every day on time and basically dedicate your life to your job, to an outcome-based short-term exchange of labor.
You obviously can’t have your cake and eat it too and the trade-off between “having a life” and “having a pension” is something most people seem to be happy to make. The global gig economy is expected to grow from $204 billion in 2018 to $455 billion in 2024 which is an incredible leap in an incredibly short period of time.
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