💎 200% growth by 2030 – the story of the 77 lakh people strong gig economy in India

Over the past week, I read a lot about the Zomato and Swiggy v/s ONDC (Open Network for Digital Commerce) debate and ordered from all 3 to see the cost difference for myself.

Amidst all the debate, one group of dedicated workers continue to lace up their shoes and rev up their bikes to deliver our meals promptly – the gig economy.

In this week's newsletter, we'll explore the growth of the gig economy and assess its impact on both the economy and the workforce.

What is the gig economy?

The gig economy refers to a labour market characterised by the prevalence of short-term or temporary positions, where organisations engage with independent contractors for limited-duration projects.

Who are gig workers?

Individuals who participate in the gig economy earn income from these activities beyond the conventional employer-employee relationship.

The emergence of the gig economy

The gig economy refers to the prevalence of short-term, flexible contracts or freelance work instead of traditional, long-term employment.

The term "gig" originates from the music industry, where musicians often played one-off shows or "gigs" rather than having a fixed engagement.

With the advent of technology and the rise of digital platforms, the gig economy has expanded to various sectors, including transportation, food delivery, and professional services.

Companies like Uber, Zomato, Fivver etc., have built their businesses around connecting workers with job opportunities on a gig-by-gig basis.

The gig economy began to take shape in India around 2010, with the entry of ride-hailing platforms like Uber and Ola, followed by food delivery services like Swiggy and Zomato. The increasing penetration of smartphones and affordable internet access further propelled India's gig economy's growth.

The gig economy in India: a growing phenomenon

According to a Mastercard report, worldwide gig economy transactions are projected to increase 17% annually, reaching approximately $455 billion by 2023.

India has approximately 77 lakh freelance workers engaged in projects spanning food delivery, ride-hailing, and other professional services. Moreover, India's workforce is increasing by around 4 million people annually.

Most of these individuals are young millennials, demonstrating a growing preference for gig contracts.

The driving forces behind the gig economy

Several factors have contributed to the growth of the gig economy:

Technological advancements: The widespread adoption of smartphones and the internet has made it easier for gig platforms to connect gig workers with potential clients, facilitating on-demand services.

Changing workforce preferences: Many people are attracted to the gig economy's flexibility, allowing them to choose when, where, and how much they want to work.

Economic shifts: The aftermath of the global financial crisis and the COVID-19 pandemic have led to job losses and uncertainty, driving people to seek alternative income sources through gigs.

The impact of the rising gig culture on the workforce

The burgeoning gig economy has brought about significant changes in the workforce landscape, such as:

✅Job flexibility and autonomy

The gig economy has allowed workers greater flexibility in their work hours and location. For instance, platforms like Pepper Content and Upwork enable freelancers to choose projects that align with their skills and interests, allowing them to manage their work-life balance effectively.

✅Skill development and diversification

A study by Upwork revealed that 69% of freelancers believe that skills training is essential for keeping up with industry trends. As a result, gig workers tend to invest in their skills and expertise, increasing their value in the market. For example, freelance graphic designers may work on various projects, from designing logos to creating promotional material, thus honing their skills and expanding their portfolio.

✅Employment opportunities

The gig economy has opened up employment opportunities for individuals needing help finding work in traditional settings. For example, individuals with disabilities can find remote freelance opportunities that cater to their specific needs and skills, ensuring they can participate in the workforce without facing accessibility challenges.

While the gig economy offers numerous benefits, it has its fair share of challenges.

❌Financial insecurity and lack of benefits

Gig workers often face financial insecurity due to the lack of a steady income and job stability. Moreover, they typically do not receive benefits like health insurance, paid leave, or retirement plans, which are common in traditional employment arrangements. In India, the Social Security Code 2020 aims to address this issue by extending social security benefits to gig and platform workers, but its implementation is still in progress.

Where is India’s gig population scattered?

In India, the role of gig workers is diverse and spans various skill levels, such as low-skilled, medium-skilled, and high-skilled. Here's a breakdown of the types of gig work within each category:

Low-skilled gig workers:

These workers contribute to 33% of the gig workforce. They typically engage in manual labour or basic service-oriented tasks that do not require extensive training or specialised expertise.

• Delivery personnel for e-commerce, food delivery, or courier services

• Rideshare drivers

• Housekeeping and cleaning staff

Medium-skilled gig workers:

These workers contribute to 47% — a majority of the gig workforce. They possess a medium level of expertise and training in their respective fields but may not have extensive experience or advanced qualifications.

• Electricians, carpenters, plumbers etc.

• Beauticians, personal cooks etc.

• Sales and marketing professionals working on a freelance basis

High-skilled gig workers:

These workers constitute 22% of the workforce. High-skilled workers have advanced qualifications, extensive experience, or specialised skills in their respective domains. They often engage in more complex tasks and projects.

• Software developers, engineers, and data scientists

• Independent consultants in management, finance, and strategy

• Content writers, copywriters, and translators

• Graphic designers and web designers

NITI Ayog's report stated that trends indicate a gradual decline in the concentration of workers with medium skills, while the number of low-skilled and high-skilled workers is rising.

Medium-skilled workers are anticipated to continue to dominate until 2030, but gig work opportunities for those with other skill levels will also emerge.

How much does an average gig worker earn?

According to a report called Gigpulse, gig workers, on average, earn INR 18,000, while the mean monthly household income is reported to be INR 40,000. The income of a gig worker typically contributes to 61% of the total household income.

The future of the gig economy in India

As I mentioned earlier, our country has over 77 lakh gig workers. According to NITI Ayog's report, this number is expected to balloon by 200%. India may have 2.35 crore gig jobs by 2030, offering a substantial opportunity for job seekers to capitalise on and adapt to the evolving work landscape.

In addition, according to Razorpay, there has been a 21.38% growth in demand over the last six months for skilled gig workers making more than INR 1.5 lakh per month, indicating a rising need for highly qualified gig experts.

In conclusion, the rise of the gig economy in India has significantly changed the country's economic landscape, creating new opportunities for millions of workers. As the gig economy continues to evolve, businesses, workers, and policymakers need to adapt and find ways to harness the full potential of this burgeoning sector.