GiG Economy

Spread of a platform-enabled gig economy.

In India, there are about 3 million gig workers — temporary workers

including independent contractors, online platform workers, contract firm
workers and on-call workers. The number is small in comparison to India’s
500 million workers. However, an estimated 55% of new employment is
generated by gig world.

Delivery boys, cleaners, consultants, bloggers, et al are all part of gig

economy. As work is job-specific, workers have flexibility to work for more
than one contractor and choose hours of work. This has encouraged
women in labour force participation.

Women, for instance, comprise more than a third of 15,000 users of digital
platform, Souktel, in Palestinian areas of West Bank and Gaza in Israel,
compared to only 19% of entire labour force in same areas.

Capital platforms, such as Airbnb (lodging) and Quick Ride (car-sharing),

have provided better utilisation of fixed assets such as houses and cars.

There are other related benefits. The lower price of service associated with gig
economy has generated consumer surplus, which can be spent on other
sectors, with a multiplier effect on income and employment generation.

Taxi services by, say, Uber and Ola, have reduced taxi fares in major cities in
India. Carpool and car-sharing have environmental benefits, as they
contribute to a lower carbon footprint.

Growth of platform-enabled services has led to formalisation of economy, and

has provided means to bank India’s huge ‘un-banked’ population.

As there are no entry barriers, anyone and everyone can participate from
anywhere. There are also no barriers based on caste, religion, gender and
location.

A 2014 Harvard Business School study found that in US, before advent of
Airbnb, Afro-American rental hosts were getting 12% less rent than their
white American counterparts for same type of house in same location.

Government can intervene to complement this self-evolving gig

economy: It is important to ensure supply of skilled labour. British
government is promoting robotics, 5G wireless internet and smart
technologies.

Growth is supported through ICT, GoI should undertake investment in

telecommunications, cybersecurity and internet, and ensure widespread
access.
Investing in complementary infrastructure such as electricity connection,
lowering logistical costs for setting up a business, and enforcing contracts will
help.

From the consumption side, regulations related to data privacy have to be

formed, and have to be enforced. In a digital world, an enormous amount of
data about individuals and their activities captured by platform is bundled
and sold to various companies without taking consent from consumers.

At the same time, there is a need to formulate rules to protect consumers

from unscrupulous operators.