Gig economy got a boost in India with the introduction of internet-based aggregator services like Ola and Uber.
For a country with a population of over 1.2 billion, and a majority of them below the age of 35, relying on the "gig economy" is perhaps the only way to create employment for a large semi-skilled and unskilled workforce.
Gig economy got a boost in India with the introduction of internet-based aggregator services like Ola and Uber. In Bengaluru, where burgeoning population and lack of public transport have been a perennial challenge, Ola and Uber came as a whiff of fresh air.
Young people, mostly in their 20s and 30s, and mainly from five to six districts surrounding Bengaluru, found employment in the big city as partners of Ola and Uber. They needed to have a driving licence, after which banks offered them easy loans to purchase cars. With an estimated 1.5 lakh Ola and Uber cabs plying in Bengaluru, even on a conservative estimate, around 2 to 2.5 lakh young people were able to get employment in this sector.
When Ola and Uber entered Bengaluru in the early part of this decade, incentives were quite attractive. It is said that some drivers earned close to Rs 1 lakh a month then. This brought in hordes of drivers along with their cabs into the city and suddenly Bengalureans felt their transportation woes were finally coming to an end.
Everything was hunky-dory for some time. But as the aggregators started to gain market share, the partners began to feel the heat. Incentives started coming down and the partners had to make more number of trips per day and work longer hours to meet their targets. EMIs on vehicle loan had to be paid and money had to be repatriated to families who mostly remained in the hinterland. Added to that was the rising fuel prices and the high cost of living in Bengaluru. Also, the snail pace of Bengaluru's traffic meant fewer trips per day.
These challenges are compounded by the crimes that take place on these cabs from time to time, particularly with women passengers. Ola and Uber should particularly tackle this aspect urgently since this is a matter of passenger safety as well as their brand image.
The inference from this experience shows that the gig economy depends on a two-way street to succeed. Aggregators and partners must have a harmonious and professional relationship with a commitment to help all the stakeholders flourish. The information technology industry has done quite well on this score. While the IT industry employs about 3 million people directly, almost thrice this number have found employment in the industry's ecosystem through the gig economy model.
Another sector that is making fast inroads into the gig economy is home delivery. A recent study revealed that floor space in fine dining restaurants around the world is coming down owing to more people ordering food online. This is true in India as well. Aggregators like Zomato, Swiggy and Foodpanda have provided indirect employment to thousands of people across the country and one can see more people getting into this ecosystem in future.
This brings us to the point whether there has to be more regulation for the gig economy to thrive in India. It is important that we should hand-hold this sector and help it grow. We need policies and processes that give clarity to the way the sector should function. A general awareness has to be created that this is the way forward for India to thrive. We need to protect the gig economy with all our might.
KS Narahari is a senior consultant with The PRactice
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