It is passé to suggest that the internet has transformed our social and economic landscape: Led by the pervasion of cheap data packs, affordable smartphones and advancements in natural language processing, a variety of vernacular users are now online. This signals the ubiquity of the Fourth Industrial Revolution (4IR), which has radically altered the way we live, move and work. This feat of scale is unprecedented, and technology has pervaded every sphere of human activity including accessing livelihoods, where digital platforms are leading the transformation in moving away from traditional labour contracting to a demand-based work allocation system. Technology has radicalised even the labour market.
The question therefore becomes how participating in these platforms yields different, upwardly mobile outcomes for workers that are part of this service economy in Indian cities. It is well known that 93 percent of India’s workforce is in the informal sector, with no security of livelihoods or safety nets. Therefore, the ability to have assured work and incomes is itself a transformational step up, one being uniquely offered by the platform economy. Platform work is spread across sectors like mobility, delivery, logistics, home improvement and beauty services, and attracts a rich tapestry of workers across education levels, skills, geographies and dependencies.
Platform work is spread across sectors like mobility, delivery, logistics, home improvement and beauty services, and attracts a rich tapestry of workers across education levels, skills, geographies and dependencies
Platforms are at the heart of India’s digital economy revolution. Digitalisation of financial services, jobs and skills, agriculture, education, logistics, and retail are all expected to create a potential value of US $ 500 billion by 2025, from their current value of US $170 billion, as per a report by the McKinsey Global Institute. This is possible because platforms solve inefficiencies and low productivity in a system riddled by both.
The latest report from the Ola Mobility Institute (OMI), ‘Unlocking Jobs in the Platform Economy: Propelling India’s Post-Covid Recovery’, studies the experience of work in twelve Indian cities, from the perspectives of 5,000 respondents in the mobility economy associated with digital platforms (66 percent) and of those outside platforms (33 percent). The report examines an array of indicators to understand the aspirations, anxieties and attitudes of workers in India’s digital economy and suggests ways to promote this fast-growing segment to actualise its potential of providing 90 million jobs, as estimated by a BCG-Dell Foundation report.
OMI’s report finds that platform workers earned a variety of incomes commensurate to their hours of work, while non-platform workers’ incomes remain constant across hours inputted. The on-demand model of the former has allowed for flexible incomes, resulting in 57 percent of platform workers earning up to INR 1,000 a day, with 43 percent earning more than that. In contrast, no non-platform worker earned more than INR 1,000 a day. On an hourly basis, platform workers earn 25 percent more than non-platform workers. These are insights from late 2019, and with economic activity resuming, one would expect to see similar and even higher figures for this group.
Similar positive effects are found when considering the rate of asset ownership among platform workers, despite being younger on average than non-platform workers. This is changing the very composition of the asset owning class in India, resulting in a category of individuals who monetise assets and contribute to the economic dynamism of short-term leasing. Therefore, by promoting asset utilisation, platforms in India hold the potential to reframe the economy as a whole.
Platform workers support a higher number of dependents than their non-platform counterparts; in fact, the higher earning potential is a huge draw for individuals to take up platform work and support their families. The earnings from platform work are critical to this. Therefore, in addition to having an economic impact, the ecosystem-wide benefits of platform work extend to supporting the needs and aspirations of families of driver-partners, who can quit low-paying work and pursue further education, lucrative careers, or other necessary caregiving work.
Platform workers support a higher number of dependents than their non-platform counterparts; in fact, the higher earning potential is a huge draw for individuals to take up platform work and support their families
The report also finds that the challenges faced by workers in the platform economy (and outside of it) can be mitigated by a holistic approach of ensuring flexibility of work and incomes while achieving socialised security. The need of the hour is to design a compliance system that is cost-effective, needs-based and assures high coverage. This can only be achieved by a complete overhaul of the bundling of certain kinds of jobs with “benefits”. The first step in this direction is the Code on Social Security 2020, but a lot more needs to be laid out to realise the potential of a secured gig and platform economy.
Overall, the latest report from OMI is a data-based argument for why the platform economy in India can be the wind in the sails for our post-COVID recovery. In addition to unlocking jobs in the millions, the platform economy can be a useful outreach tool for providing essential services and secure livelihoods for all.
** This article is based on the latest report from the Ola Mobility Institute, “Unlocking the Platform Economy: Propelling India’s Post-Covid Recovery”. Read the full report here.
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Sreelakshmi holds a Master's Degree from IIT Madras in Development Studies and is Research Manager at Ola Mobility Institute. She is passionate about cities and ...
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