If you have downloaded an app for food delivery, grocery delivery or ride-hailing, It’s likely that you have already experienced the impact of startups on the gig economy in India. This segment across industries provides brand-new, intriguing avenues for linking businesses, customers, and gig workers. India presently has 7.7 million gig workers, and NITI Aayog predicts that number would rise to 23.5 million by 2029 – 2030. Find out how this world of the gig economy is transforming as a result of startups.
Defining Gig Economy
The term “gig economy” may be simply referred to as a labour market where there is the hiring of project-based, hourly, or part-time employees, typically through an online platform. A multitude of variables, such as the growing use of mobile devices and the internet, rising disposable incomes, and the expansion of websites that link companies with independent contractors are all contributing to this growth.
Nowadays, the gig economy’s most popular employment avenues include door delivery with 22% in food and 26% in other services, 16% in household/vehicle repair, 10% in cleaning, and 7% in personal care.
Challenges for Workers
The concept of the gig economy definitely has its own drawbacks, which caused initial issues, and some of them are yet to be mitigated. Let’s have a look at some of these challenges:
- These jobs are mostly temporary or part-time, with no guarantee of consistent income or employment. It often leads to people working more than 8 hours a day to make up for the non-working days.
- Competition for gig economy jobs can be intense, particularly in densely populated urban areas where demand for services is high. This can lead to a situation where unskilled workers are unable to find work, even in the gig economy, due to the oversupply of workers or lack of demand for their services.
- Most freelance gig workers do not get access to health and other benefits as they are not covered under any labour code. Thus, they are more exposed to work-related accidents and injuries.
The Role of Indian Startups in the Gig Economy
Startups can respond more swiftly to shifting market circumstances and client demands because they are frequently more flexible and agile than established firms. This degree of adaptability is especially useful in a vibrant economy like India’s, where the market circumstances are ever-changing. Often supported by tech-enabled backing, startups are in a position to leverage this technology and create innovative solutions for streamlining the ecosystem of a sector.
Here are some ways in which Indian start-ups have contributed to the gig economy:
Job creation:
Startups are doing more than just creating marketplaces. They’re also providing financial services to gig workers, like digital payments and insurance. Moreover, the gig economy has created new job opportunities for people who may not have had access to traditional employment. This includes students, housewives, and people with specific skills or talents who can offer their services on a freelance basis. It is projected that gig workers in India, in the start-up sector, will rise up to 4% of the total workforce by 2024, up from 1.5% in 2020-21.
Platform-based models:
Many Indian startups have created platform-based models that connect freelancers or gig workers with businesses or individuals who need their services. Examples include ride-sharing, quick commerce and local services, which connect drivers, delivery personnel, and service providers with customers.
And let’s not forget about the flexible employment options that start-ups are creating. Other platforms are connecting freelancers with businesses and individuals looking for their services. This allows workers to have more control over their schedules and the type of work they do and creates a fresh breed of formal workers.
Startup Evolution: A New Era of Work
Startups have smartly leveraged the massive workforce present in India and introduced an employment opportunity for many. In fact, recent surveys show that India accounts for about 40% of the total freelancers worldwide, ranking second next to the US. Further, as demand ramps up in Tier-II and Tier-III cities, more employment opportunities will be created and workers can work where they live, instead of migrating to Tier-I cities. The Indian government is also keeping an eye on developments and seeking social security for workers. A combination of all these factors paints a positive picture for the future of gig work and is certain to contribute to the creation of a more resilient economy.