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Is ‘Gig Economy’ Going To Dominate The Blue-Collar Job Sector?

Technology and internet has helped greatly to increase the prospects for the gig economy, but at the same time offline and personal references also played a crucial role.

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In the present pandemic situation, which is prevalent all over the world where almost all major sectors are still stuck with losses due to lockdown and slow demand in the economy, the one sector which somehow survived and flourished in India is the “Gig Economy”. There are basically two sides in the gig economy, one, where a service seeker i.e., a consumer who has a demand for a specific task, and the other, where a service provider i.e., a gig worker who can bring off that specific task. This new form of economy is primarily based on digital platform and has evolved in the past few years. Companies like Amazon, Zomato, Ola, Flipkart, Swiggy, Uber and many more strengthened their place in the industry through Gig Economy. The innovative initiatives taken by these companies is creating job opportunities for the young, flexible, and unskilled workers who want to support themselves while still in college and also for others who are seeking a different career path. Though the gig economy in India is still in its growing stage but it is estimated to triple its size in next three to four years according to Boston Consulting Group (BCG) and Michael & Susan Dell Foundation. 

Majority of the reports projected that within 8 to 10 years, the total gig job could reach to 90 million and will contribute 1.25% to India’s GDP. As per the report, in developing countries the engagement of gig economy is between 5 to 12% which is more than the developed countries (1 to 4%). India has emerged as the 5th largest country for flexible staffing after the United States of America, China, Brazil, and Japan. Indian states like Haryana, Madhya Pradesh, Andhra Pradesh, Gujarat, and Telangana have shown the maximum growth opportunities for the gig workers.

Basically, technology and internet has helped greatly to increase the prospects for the gig economy, but at the same time offline and personal references also played a crucial role. The nature of work is changing with the change in technology, advanced business models and new economic activities. The digital platforms abolished the middlemen and emerged as a superpower by which the job seekers can easily find the job providers and the job

opportunities. India emerged as one of the biggest countries for gig and platform workers as E-Commerce platforms created huge job opportunities even in the midst of the pandemic. According to ASSOCHAM, it is expected that the gig economy will increase to $455 billion by 2024 at a compound annual growth rate of 17%. The overall demand for job was 14 lakhs in 2020 within which 80% accounted for the gig economy. The report also says that, more the companies are undergoing business transformation with automation and artificial intelligence, the more the gig economy is fuelled.

The Covid-19 impacted India’s blue-collar sector drastically consisting of around 450 million workers which includes delivery boys and cab drivers engaged with different platforms like Ola, Uber, Zomato, Swiggy, Big Basket and many more. As a result, a huge digital transformation occurred within the ecosystem and it has been noticed that the future blue-collar sector is likely to be dominated by the gig economy work force which is based on the skills available and work flexibility across different sectors. This will allow the workers to maximise their earnings but with lower job security. However, the questions and concerns regarding worker protection, minimum wage requirements and consumer rights are also raised at the same time. The economy has started to experience its recovery stage, and the major three sectors of blue-collar workforce which comprises of health staff, logistics & delivery, and facilities & security management are already seeing an uptick which will surpass the existing job opportunities of the pre-covid levels and create massive employment options in tier 2 and tier 3 cities. The reforms could also encourage the expansion of the human resource management sector for the blue-collar employees.

Some challenges & concerns of the gig economy like minimum wages, retirement benefits, health benefits, etc needs to be addressed. As per Union Budget 2021, the government has proposed to launch a portal for collecting relevant information on gig workers to help and formulate social security schemes for them. The central government has passed a social security code to cover the gig workers, the main aspect of which is to create a social security fund which will be one percent of the total aggregator’s turnover per year and ensure that the amount will be used for the benefit of the unorganised gig workers. In addition to these, the government should also focus more on the regulations for protecting the gig workforce. The industries should also come together to create a common platform to increase the labour protection of the gig workers. There is an enormous scope for the gig economy in a developing country like India; so, the government should envisage a comprehensive legislation to motivate and empower many more unorganised labourers to follow this path. So that they could be brought under the purview of the Gig Economy.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house


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gig economy Mafruza Sultana abhinav singhal job sector

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