Policy and business perspective on the Gig Work in India
In this article, we take a look at the Gig or platform work related to food delivery and taxi hail platforms. We try to find out how businesses and government can solve the issues of these platform workers in India.
1.??????The algorithm economy
There was a time when managers used to manage workers and the output of an organization and used to report the progress at regular intervals to assess the productivity of the workers and the organization as a whole. With the advent of technology, this has changed drastically.
In the knowledge economy, the management[i] started using automated tools and processes to monitor the work being done and the productivity of an employee or a worker at the end of the day or a month or a quarter. This has matured to a higher level now that workers or employees are being driven to work by the automated tools or apps, especially driven by the AI algorithms to produce the desired results for the organization. The algorithms now drive the employees and organization to bring results to the stakeholders.
‘Free enterprise cannot be justified as being good for business, it can be justified only as being good for society,’ said Peter Drucker.
In olden times, employees used to contribute to the betterment of the organization's processes and improvements since they were closer to the shop floor. And industries learnt to use this advantage by providing “freedom” to the workers, at the same time maintaining the production levels on a day to day or month to month basis, without disregarding their suggestions. Some of the suggestions of the grassroots workers at the shop floor have led to wonderful innovations.[ii] However, we can imagine the minimal role of the mind of a grassroots gig worker today to contribute to the growth of a platform organization, except to conform to working for the algorithm to produce results that only a few in the organization are empowered to think is the best way to get the results.
It is akin to the industrial environment in the 18th century when industrialization had just started, and workers were considered as bodies or commodities. Easily replaceable and more the number, more the productivity of the organization! This is what exactly the Gig work has become, be it food delivery platforms or the driving taxi apps or any other. The irony is that all this is happening in the knowledge-driven economy, which is valued much higher than the industrial economy when it is said that the management has entered a new era of?empathy.[iii] Isn’t history repeating itself?
The platform companies think that the way these algorithms are organizing the work is the best way to get to where they want to be. But we see below, we may realize the real progress of a corporation may be completely the other way round. So here we are, in the economy that is driven by algorithms and AI and more of this is coming in future to disempower the people who are the building blocks of this algorithm economy. The basic premise of the algorithm economy is that the algorithm is supreme and the worker has to conform to it for delivering results. If that doesn’t happen, the worker is quickly kicked out of the system and even rendered jobless.
?2.??????Power of data
?Data is every algorithm’s food. No doubt, the real time data coming into the system on a minute to minute or hour to hour basis[iv] is huge and it is beyond any human capacity to figure it out or make sense of it and how to handle it. That’s why we invented algorithms and there is a great need for algorithms to handle such massive data. The algorithm crunches this data, analyses it, prepares work orders, predicts the projections, lists out the actions, prioritizes them and marks the actions to be taken by individuals to fulfil the action order book. The data is essentially vesting the algorithm with all power.
But how does the algorithm decide? That’s a big question. The human minds that develop the algorithms are the ones who decide how the algorithm processes the data, what information to take out, how to take it out and how to translate it into the action items. It is eventually a small team of programmers and developers, following the directive of the management, who are developing and deploying these algorithms that are controlling the work of lakhs of workers across the country or the countries. Currently, there are no laws or policies in any nation to explicitly govern the development of these algorithms to take care of the regulations related to worker safety, working hours and wages.
3.??????Driving humans on the platform
Per recent statistics, Uber has 100,000 drivers enrolled on its India platform[v]. Ola has 300,000 of drivers enrolled[vi]. Swiggy has 250,000[vii] platform workers working for it, whereas Zomato is working with 301,000[viii] platform workers. Recently the delivery promises of ten-minute grocery/vegetable delivery startups like Blinkit and Zepto, who have raked in millions of dollars of investors’ money copying the concept from developed countries, push the grassroots delivery workers to speed up and deliver the goods within ten minutes of receipt of the order, despite knowing very well the state of traffic chaos on the Indian roads. In India, approximately 1 million families[ix] are dependent on the income from the platform work.
Peter Drucker once said: ‘Work is an extension of our personality. It is an achievement. It is one of the ways that a person defines himself or herself, measures his worth and his humanity.’
Recent studies[x] on the plight of platform workers in India in various metros, Mumbai, Delhi and Bangalore have highlighted the following humane issues in the platform work:
1.??????Though they are treated as employees in terms of control but are classified as independent partners or contractors rather than employees of the corporate to avoid the compliance with government’s employee wage acts and rules.
2.??????Workers are being pushed hard by the platform to deliver beyond ten to twelve hours of stretch work for earning their nominal wages per day,
3.??????Workers being driven to deliver faster thus risking their lives and hence meeting with accidents / other injuries on the road during delivery or post-delivery to meet the pressure of delivering goods in time, failing which they face a penalty in their payments per order on fulfilment,
4.??????No explicit life insurance cover if they meet with an accident or are disabled. They are treated on a case-to-case basis, depending upon the fight with perseverance they put up against the system, and
5.??????No surety of leave to earn minimum wages
6.??????Their transaction records are instantly deleted from the platform and they are ousted from work in case of any protest or any complaint against the system, and they are not left with any proof of working for the platform
This is akin to somewhat of a forced labour scenario. Looking at this, the Government has brought a draft policy to improve the Gig workers’ plight, namely the Code of Social Security 2020, but that will take its own sweet time to get implemented. Meanwhile, the exploitation of labour continues.
Fairwork (Oxford Internet Institute) has laid out five principles of platform employment that constitute fair work for these workers[xi]:
Fair pay, Fair conditions, Fair contracts, Fair Management and Fair Contracts.
The annual ratings of the food delivery platforms and the taxi hail platforms in India by Fairwork in 2021 is dismal, ranging from 1 to 4 out of 10.[xii]
4.??????Dying young or old is a choice
While speaking to some of the delivery persons of these platforms, we notice a kind of frustration in most of them. It is clear that they had no other job options and that’s why they are in their current job to earn for their families. In the first instance of their getting a better job, they would quit. It is not surprising that the attrition rate of food delivery platform workers[xiii] in India is 40%, much higher than any other industry attrition rate average.
Every person, maybe young or mid-aged, does have the ambition to earn more and settle down in life. While many platform workers have been left disabled or have died in action while doing their work, many would like to get out of this work as soon as a better opportunity arises, as they do not want to die young. There is an analogy in this context. The average life of a worker in an organization decides the life of the organization s/he works for.
To continue to work, to continue to love what you do, is certainly a contributing element to one's longevity and health. - John Williams. ?
Let’s take the case of Indian companies that have survived doing business in India for more than 100 years and are still going strong. How are these companies different from the ones that die young, within a decade or less?
The answer lies in the following three things:
a.??????Innovation,
b.??????Industrial relations or employee welfare, and
c.??????Customer Satisfaction
Great lessons can be learnt from companies such as TVS group, Tata group and Kirloskar Brothers, to name a few. These companies know how to play the long game and thrive at it[xiv]. Compared to that, do we think Swiggy or Zomato or Zepto could sustain that long? Probably not, perhaps because of their policies and way of working.?If they continue to employ such policies, they are sure to be beaten by the ones who have the right policies in place. Market share is a money game in such platforms, entry of another startup that delivers results along with taking good care of its people or partners can uproot the incumbents in no time.
Also, if the government laws are implemented, the cost of compliance could be much more than the adoption of worker-friendly policies right now. The compliance costs as we know are high in the long run everywhere in the world.?While the regulations are meant to safeguard against risk, rising complexity and compliance costs?are putting immense pressure on institutions.[xv]
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5.??????Investing pennies to reap pounds
We did a small exercise to know the amount of investment available for putting worker-friendly policies in a company. Here are some numbers in relation to the data by Zomato in the public domain:
1.??????Number of platform workers: 301,000
2.??????Gross Order value of orders delivered FY 2022: Rs. 213 Billion
3.??????Number of orders delivered: 535 million
4.??????Average Order Size: ~ Rs. 398
5.??????Taking out Rs 5 (1.25%) from every order for worker welfare: Rs. 267 Crores
6.??????Potential contribution to the worker welfare fund for one financial year: Rs. 267 Crores
Even the platform may not have to spend it from its own account heads. Any platform business may just add Re 5 to their customer invoice for the platform worker welfare fund and the customers would happily pay. And the platform could easily provide for workers’ welfare in India. Since 2010, Zomato could have put Rs. 150 Cr (averaged over 12 years) x 12 = Rs. 1800 Crores (grossing to Rs. 2000 Crores if the interest income is included) to workers’ welfare fund without spending a penny from their own heads!?
6.??????Way forward
As mentioned earlier, either the business can wait for government acts, rules and regulations and comply with them OR introduce the worker-friendly policies in the workplace and move ahead of the competition and gain an advantage in the market. The choice is wide open. Which way the policy drifts within platform companies, only the future can tell. Some platforms have started working on this, though in piecemeals.[xvi]
As far as the policymakers are concerned, they should be working ahead of the platform companies instead, and may focus on the following aspects:
a.??????Definition of the Gig worker and define his / her role wrt the organization engaged with
b.??????Rights of a Gig worker to be complied by the organization s/he’s working for
c.??????Obligations of a Gig worker to be complied by the worker
d.??????Welfare schemes for the Gig workers to be instituted by the platform organizations
e.??????Wages/salary and other allowances to be offered to the Gig worker to be complied by the Platform company
The Central Government of India has recently declared that all sorts of (unorganized sector) workers would now be subject to minimum wage regulations and that insurance under the Employees State Insurance Corporation, or ESIC will apply. To reap the benefits of these incentives, the government has created an online platform e-Shram (https://eshram.gov.in/) for all unorganised sector workers in the country. It’s mandatory for all gig and platform workers to register on this portal.[xvii] As of Dec 2021, the number of gig and platform workers registered on the e-Shram portal has reached 7,29,477.[xviii]
Another aspect of Policy that needs serious attention is for making the algorithms humane. For this the AI and the Internet policy of the country need to be relooked and reframed so that the developers of the algorithms do not intentionally or unintentionally violate any of the laws of the land related to worker safety, working hours and wages while developing and deploying these algorithms and the compliance of such a policy needs to be submitted to the relevant authorities at regular intervals. More on that later….
References:
[v] https://www.livemint.com/companies/news/uber-commits-rs-100-crore-towards-driver-welfare-initiatives-11635762142922.html
[vi] https://economictimes.indiatimes.com/tech/startups/ola-gmv-has-crossed-pre-pandemic-levels-ceo-bhavish-aggarwal-says/articleshow/86005653.cms?from=mdr
[vii] https://www.business-standard.com/article/companies/swiggy-food-delivery-revenue-up-56-in-h1-doubles-from-level-before-covid-121112300279_1.html
[viii] https://economictimes.indiatimes.com/tech/startups/zomato-q2-revenue-surges-to-rs-1024-crore-firm-invests-in-curefit-magicpin-and-shiprocket/articleshow/87632474.cms?from=mdr
[ix] https://economictimes.indiatimes.com/tech/newsletters/morning-dispatch/gig-workers-shortage-hits-startups-delhivery-raises-rs-2347-crore-from-anchor-investors/articleshow/91480505.cms?from=mdr
[x] Is Platform Work Decent Work? A Case of Food Delivery Workers in Karnataka, Occasional Paper Series 10/2020, National Law School of India University, (NLSIU), Bangalore, www.mpp.nls.ac.in, and Studying Platform work in Mumbai and New Delhi, The Centre for Internet and Society, August 2021
[xi] Fairwork (2021), Fairwork India Ratings 2021: Labour Standards in the Platform Economy, Bangalore, India; Oxford, United Kingdom
[xiii] https://economictimes.indiatimes.com/tech/newsletters/morning-dispatch/gig-workers-shortage-hits-startups-delhivery-raises-rs-2347-crore-from-anchor-investors/articleshow/91480505.cms?from=mdr
[xiv] https://www.businesstoday.in/magazine/cover-story/story/companies-that-have-completed-100-years-in-india-22772-2011-06-26
[xv] https://www.forbes.com/sites/servicenow/2021/10/21/the-creeping-cost-of-compliance/?sh=79bb705c56cc