Expert Speak Digital Frontiers
Published on Mar 20, 2020
The coronavirus has left gig economy workers out in the cold

The coronavirus outbreak has caused life across the world to stutter to a halt and the barricades are now quickly going up. Borders are being shut down and people are increasingly seeking to isolate themselves as restricting social contact has been touted by the scientific community as the one measure that may work to decelerate the pace of the virus’ spread. However, in order for most of society to survive the isolation comfortably, we shall find ourselves increasingly dependent on a large fleet of gig economy workers operating at the frontline, ferrying people around and offering indispensable services door-to-door. This isn’t a small group of people, especially in India. About 80% of India’s workers are in the informal economy and the gig economy in particular is a booming employer, projected to grow to a staggering volume of $455 billion by 2023.

Consider this - about 1.5 million drivers work for ride-hailing platforms like Uber and Ola in India. Gig workers in India are mostly young, often dependent on these gigs as their primary source of income and bereft of access to any form of health insurance or social security cover. They can therefore scarcely consider taking time off work for any reason. This precariousness could now pose a massive threat to public interest as these workers tend to interact with dozens of people a day and could become the new “super-spreaders” of the coronavirus. Due to being a mainly young crowd, they are likely to exhibit only mild symptoms of the disease if they contract it, and due to financial insecurity would therefore be more likely to shrug off symptoms and carry on with work, imperilling others they come in contact with. Workers at the frontline must therefore be provisioned accordingly to make them more resilient, and also provided with a safety net robust enough to enable them to take time off work if they feel symptomatic or support them in the event of a total lockdown. How might corporations, governments and individuals work at their respective levels to enable this?

A number of companies have risen to the occasion and announced a slew of measures. These range from providing sanitisers and health advisories (Ola) to organising training and awareness campaigns (Swiggy, Flipkart). Swiggy has gone further and advocated “contactless deliveries”, where possible to minimise human contact, and has also offered free medical consultation to its workers. Uber suspended pool rides in the US and Canada and has offered financial assistance to workers in the event they test positive for the virus. These measures are useful but only go so far, they in no way provide a safety net for workers to stay home if they feel symptomatic. Also, most of these efforts are evidently meant to be transitory and almost deliberately piecemeal. This clearly isn’t a broader reckoning with the precarity of workers’ livelihoods, and this is because companies classify gig workers as “independent contractors”, not employees. They are therefore being very careful to not accidentally set a “wrong precedent” by providing benefits which may be misconstrued.

Constrained by revenue models built around the gig economy, most companies can’t realistically be expected to do the heavy-lifting here, though the sustainability of these models must certainly be open to debate in the long-run. However, those which have the resources could take a leaf out of the book of the likes of Microsoft - whose vendors must now provide contract employees with at least 15 days of paid holiday and sick leave. Collaborative efforts - such as those of Uber, Lyft and DoorDash who are venturing to set up a broader compensation fund for their gig workers - could also be useful. At the very least, workers must be made aware of the magnitude of the threat and trained accordingly.

It is governments, who inevitably must emerge as the heroes of this crisis and shoulder the major part of the effort to combat it. Charged with the double burden of coping with the health costs of managing the pandemic while also cushioning the heavy blow it has dealt to the economy, governments may now need to loosen the purse strings without worrying too much about the fiscal deficit ballooning. India faces a daunting task ahead - ours is an economy which is mostly informal and unable to work remotely and a shutdown would deal a tremendous blow to a large chunk of the population. Only about 8% of India’s workforce has access to social protection due to working in the organised sector. In recognition of this vast policy vacuum, the Indian state had circulated a draft social security code a few months ago, conceptualised as a comprehensive proposal stitching together existing labour laws and introducing social security frameworks including health benefits and insurance coverage for the informal sector, including gig workers. When in place, this may serve to plug the glaring gap that exists in social security coverage in India. However, there is presently no framework or even the skeleton of a welfare system the government can deploy and this shall present a formidable logistical challenge.

The key though will be not how much the government does but how it does it. Given tremendous strain on resources, disbursement must be targeted and leakages minimised. Economists Gabriel Zucman and Emmanuel Saez’s proposal in this regard has gained some traction among academics recently. They propose that in order to get cash flowing immediately to workers and businesses, the government must take on the role of “payer of last resort” and begin disbursing an unemployment insurance to “idle workers”. For gig workers, this would imply that workers could report themselves “idle” and claim this sum. They compellingly argue that this kind of arrangement wouldn’t waste resources as any excess payment made to workers/businesses could be converted into an interest-free loan when the crisis has passed. They stress that governments mustn’t try to shore up demand at this time by injecting cash into the economy (like Hong Kong's “one-time cash injection”) or offer incentives to spend (Taiwan), and must focus instead on supporting those who cannot or must not come to work. Governments around the world are experimenting with temporary social security arrangements for the crisis and India must learn its lessons quickly from these. The Indian government could also help through awarding forbearance on loans undertaken by workers - Uber and Ola drivers for instance, are often highly leveraged and are dependent on their daily wages to pay off car loans. Bangalore has seen a one-third dip in demands for rides due to the coronavirus, and the OTU Drivers and Owners Association has requested the state government to urge creditors to waive off their loan repayments at least partially in order to lessen their burden.

Finally, the gravity of this crisis demands a change in individual behaviour and social norms at their core. A massive awareness drive carried out responsibly by the media could sensitise people to the scale and magnitude of the problem and affect a shift in perspectives around the need to practice hygiene and exercise caution. Only a change in individual behaviour can eventually lead to the world overcoming this crisis. It is also crucial for us to be empathetic and look out for each other; we must fortify our communities even as we practice physical isolation. One person’s precariousness is now society’s problem.

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.


Sangeet Jain

Sangeet Jain

Sangeet Jain was Junior Fellow at ORF. Her research focus is on employment and the future of work

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