Just in Time Employees – The Gig Economy

Recently India’s Finance Minister Honorable Nirmala Sitharaman made a statement on the sluggishness of the automobile sector. The statement reflected the report from Deloitte 2019 titled Global Automotive Consumer Study which states that the Young Indian consumers are not averse to the idea of shared mobility leading to the condition of taking a ride in hired taxis like Ola and Uber than buying cars for their disposal.

Ola and Uber are platforms that employ people who can work at their convenience and can sign in and sign out any time based on their convenience, generally called as Gig Economy. Some of the famous Gig Economy platforms in India are Ola, Uber, Swiggy, Zomato to name a few.

The concept of Gig economy is changing the way ‘work’ is seen. Even students who are into professional education are involving themselves into these Gig Economy platforms to earn easy money.

But this Gig economy is not a new concept. In the earlier days in India, people were self-employed. The concept of “Government Job” and later ‘Software Professionals’ changed the perception of the society and self-employment lost its lustre and became less fancy. Everyone wanted to be working under a corporate house. Be it TATAs to Infosys, one’s pride was associated with the place where he / she is working.

The employment in Gig Economy is of two types (De Stefano, 2015).
Work –on-demand
Crowd work
The ‘work on demand’ concept is about the work that can be channeled through App using a smartphone. These corporate owned Apps enroll workers who like to participate in the platforms on part time basis based on their convenience. Based on the need of the customer and nature of work, these apps will assign the tasks to the work people who are enrolled. The earnings from the service is shared between the platform owner and the employee for every specific task.

In contrast, the Crowd work deals with jobs that are performed through interconnected computers through internet connecting numerous workforce and companies. The tasks performed in these types of jobs are small tasks that cannot be automated but still require some human judgement.

The Gig Economy offers both advantages and disadvantages to a nation’s economy.
This pattern of job and work are well received by new generation entrepreneurs as it offers the convenience to start the business. The cost of operation in this business model is very low as there is no additional burden related to the employee’s benefit to the company.

The scalability of the business is also high as the app or the crowd work can be extended across locations, geography and even nations.

The workers (Not to be read as Employees) who are associated with the platforms in Gig Economy are having the freedom of selecting their own time and convenience of performing the task.

Image Source: Strategy-business.com
The main disadvantage of this model is that it actually leads to a decrease in economic value addition as it removes the usual spiralling effect associated with the conventional employment. Although this decrease in economic effect may last for a short span of time, but the effect will be significant.

Another important flop side is that the data on the employment generated will not be available to the authorities. Government authorities use various mechanisms to capture the growth of employment rate in the economy. Organised employment is an important source to the authorities to capture the data. But, in a Gig Economy, checking the pulse of employment becomes difficult as the employment becomes plug in and plug out.

There are chances that a person may be associated with multiple Gig Economy platforms. It was not compulsory for the corporates in these platforms to share the real details with the authorities as the workers are not full time. In these conditions, it becomes difficult for the government authorities to ascertain the employment details of the economy.

India cannot simply ape the free market economy followed by developed countries like USA. There are many social compulsions are to be considered before the government while deciding a policy. Government regulates numerous industries/sectors keeping this obligation in mind.

It’s time for India to decide whether these technological developments are to be left to its logical conclusion or to intervene and bring in regulations?