India’s Gig Workers: Short-Term Contracts, Long-Term Questions

Image Source: Getty Images

Following the COVID-19 pandemic, which was also accompanied by technological advancements, the labour market has undergone an unprecedented global transformation. The Indian economy is no stranger. With the emergence of digital platforms offering novel avenues and a broadening scope for producing and delivering goods and services, the demand for online gig workers/freelancers is rising gradually. Gig platforms have become a critical component of India’s urban and rural infrastructure, blurring the traditional binaries of the conventional employer-employee relationship. From supplying groceries, domestic help, and care services to public transport and working remotely as independent consultants for private and public organisations, gig workers have been shaping access to resources and scaling service delivery for everyone. While gig workers are embedded as an indispensable factor in India’s economic landscape, the lack of adequate policies on regulation, accountability, labour laws, and appropriate legislative tools is still ambivalent.

India could work towards aligning its frameworks with emerging movements in other countries that seek to protect workers, ensure algorithmic transparency, and formalise the employment status of gig workers. 

Defining Gig Workers in India

In 2020, India’s Ministry of Labour and Employment described a gig worker as ‘a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship’. Further in 2022, NITI Aayog released a report titled ‘India’s Booming Gig and Platform Economy’, highlighting that the size of the gig workforce in India accounts for 7.7 million in 2020–21 and is projected to rise to 23.5 million by 2029–30. Despite contributing significantly to vital urban services, such as doorstep delivery and daily commutes, 98 percent of this workforce earns less than INR 500,000 annually. Out of this, nearly 77.6 percent of gig workers earn INR 250,000 or less on an annual basis. However, their earnings also greatly depend on the algorithmic control imposed unilaterally by online platforms, which decides their performance rating, work appraisal, and earnings. Under the guise of offering flexibility, a lack of assured basic rights, such as minimum wages, paid leave, medical insurance, and other associated health benefits and perks, persists. Despite acting as frontline responders during the pandemic, gig workers continue to lack social and economic protection. As both urban and rural areas increasingly depend on platforms for last-mile services, governance is shifting—from public institutions to opaque algorithms.

Existing Policy Frameworks for Gig Workers in India

In 2020, Indian gig workers were included in the domain of labour laws for the first time by the Ministry of Labour and Employment through the Code on Social Security, which mandates social protection schemes for them. In this context, the Rajasthan government passed a landmark initiative in 2023—the ‘Rajasthan Platform Based Gig Workers (Registration and Welfare) Act’—constituting a Welfare Board and setting up a Welfare fund for regularising their work norms and environment. While these are important steps, they fall short in both design and execution. Moreover, critics have also laid out certain limitations, in terms of definitional clarity between a ‘primary employer’, ‘aggregator’, and ‘gig worker’; a platform cess to be collected from the primary employer and aggregator to support the Welfare board; lack of rights for the platform workers to ensure compliance by the aggregator; and an ambiguous grievance redressal mechanism allowing the gig worker to lodge grievance against the Board and not the aggregator. Despite marking a significant step in the betterment of gig workers, Rajasthan’s Platform Act also underlines the existence of a top-down model inadequate to address the engrained power asymmetry, in terms of control, pricing, and unilateral rule-making.

Gig Workers in the Global Landscape

Globally, governments are working towards the protection of gig workers and curbing the exploitation meted out by digital platforms. Legislatures and courts are moving towards reclassifying gig workers as ‘employees’ or ‘dependent contractors’. In the landmark Uber v Aslam (2021) case, the United Kingdom (UK) Supreme Court held that Uber drivers—classified by the company as independent contractors—were in fact ‘workers’ under UK’s legal fabric and were therefore entitled to core protections such as minimum wage and paid leave. The judgement thus affirmed that legal classifications ought to reflect the lived realities of gig workers, not the labels imposed unilaterally by companies. Several other jurisdictions have followed suit. Spain’s Ley Rider mandates food delivery platforms to offer formal employment contracts, disclose algorithms, and recognise rider rights. The European Union’s (EU) draft directive proposes a presumption of employment unless platforms can prove otherwise. South Korea’s Fair Trade Commission recently penalised ride-hailing firms for algorithmic bias.

Though gig workers are embedded as one of the indispensable factors in India’s economic landscape, lack of adequate policies on regulation, accountability, labour laws, and appropriate legislative tools is still ambivalent.

India could work towards aligning its frameworks with emerging movements in other countries that seek to protect workers, ensure algorithmic transparency, and formalise the employment status of gig workers. Sector-specific regulations could help govern pricing, working conditions, and data-driven control, bridging the disconnect between fragmented state labour laws and national tech oversight.

Policy Recommendations

Having a cross-sectoral approach interlinking technology, labour rights, and urban governance is key.  Blurring the line between technology and public utility, gig workers should be integrated as an essential component of the larger urban infrastructure. As last-mile service providers, their functionality warrants regulation on par with public utilities.

Furthermore, a key potential policy step could be to establish a dedicated regulatory authority, a Platform Utilities Commission (PUC), similar to existing utility commissions such as the Central Electricity Regulatory Commission (CERC) or Telecom Regulatory Authority of India (TRAI) to administer pricing, algorithmic accountability, service delivery, and worker rights. Additionally, gig platforms should be legally obligated to disclose how jobs are assigned and earnings are determined, as algorithmic transparency remains to be the key to fairness. This information must also be auditable and accessible to both regulators and workers to prevent data-driven discrimination.

The need of the hour is to shift from fragmented welfare schemes to structured regulations, grounded in rights, transparency, and public oversight whilst enforcing fair pricing, accountability, and worker protection. The missing factor is not intent, but a regulatory architecture with grit and teeth. India’s current approach towards gig workers falls short in institutional authority and policy imagination to govern platforms as critical infrastructure. In this context, India must reimagine platform work as core infrastructure, not just a tech-driven convenience. A rights-based and robust regulatory framework is essential to ensure the digital economy works for those who sustain its core. By governing platforms through law rather than goodwill, India can house a more inclusive, accountable, and globally relevant model for the future of work.

Swati Prabhu is an Associate Fellow at the Centre for New Economic Diplomacy, Observer Research Foundation.

Prisha Basu is a Research Intern at the Observer Research Foundation, Kolkata. 

• Developing and Emerging Economies
• India
• gig economy
• gig platforms
• gig workers in india
• gig workers policy
• gig workforce in india
• online gig workers
• regulation of gig work

The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.

PREV NEXT