Gig Growth, Rising Vulnerabilities

An innovative economic model has emerged in the last decade, redefining employment and the labour market to the benefit of both businesses and unemployed youth. It is the gig economy. The digital revolution facilitated the creation of numerous opportunities for freelance and project-based work, non-traditional employment in fields such as content creation, graphic design, marketing, software development, and consulting, etc., assuring a quick source of income with a choice of work.

The ‘platform economy’, as it is referred to, has made a tremendous contribution to the world economy through the creation of new markets, expansion of labour supply, optimisation of asset utilisation, and reduction of transaction costs. For example, according to Federal Reserve & BLS data, around 36 per cent of U.S. workers have done some gig work, and about 10 per cent rely on it as their primary income. Similarly, delivery platforms in India, Indonesia, Brazil, and Nigeria operating on low fixed costs and high scalability employ millions of gig workers, and the revenue growth is phenomenal. For example, Uber’s gross bookings grew from virtually zero in 2010 to over USD 140 billion annually by 2024. The LFPR has risen dramatically as the platforms have pulled into the workforce those who previously stayed away from active labour markets, such as students, retirees, stay-at-home parents, people with disabilities, and immigrants.

The gig economy, while accelerating digital transformation of business through mobile payments, GPS, and rating systems, has also provided a market for unutilized assets like idle cars, unused rooms, and personal skills in retail, hospitality, and professional services. Thanks to AI, automation, and mobile apps, when the youth from Gen-Z are getting flexible and short-term jobs, companies save costs by finding task-based workers online. Numerous digital platforms like Swiggy, Zomato, Blinkit, Dunzo, Uber, Ola, Urban Company, etc., have absorbed a huge portion of unemployed youth through jobs like food delivery partners, cab drivers, and quick-commerce workers. The additional income to households boosted demand. Experts opine that since the platform economy needs no regular offices, permanent employees, or huge capital requirements, it encourages entrepreneurship and can also work as a cushion in times of recessions and automation-driven job displacement. This was proven right during the pandemic.

The good news is, the gig economy definitely helped reduce unemployment in India as employment rose from 47.5 crore in 2017–18 to 64.33 crore in 2023–24: a net addition of 16.83 crore jobs over six years. In 2024, India had approximately 12 million gig workers, nearly double the 7.7 million noted in 2021, and projections indicate this could exceed 23 million by 2030, which again would expand to nearly 62 million by the Viksit Bharat era of 2047. The sector reportedly contributed 1.25 per cent to the GDP by 2023 (up from under 1 per cent pre-2020) and is valued at USD 556.7 billion in 2024, projected to hit USD 646.77 billion in 2025.

However, the downsides are a concern for the future, if not in the immediate run. According to Statista, almost 70 per cent of gig workers are not entitled to security benefits like insurance, pensions, or paid leave, leaving their future uncertain. Long working hours, ratings, penalties, and targets conditioned by algorithms, not to mention high commissions, take away the comfort zone of workers. A study by Animesh Sharma and Rahul Sharma (www.sciencedirect.com) highlights that the system externalises wage costs and pushes risks onto workers, and the problems are exacerbated due to non-intervention by the government.

On November 21, 2025, India enforced four new Labour Codes: the Code on Wages (2019), Industrial Relations Code (2020), Code on Social Security (2020), and Occupational Safety, Health and Working Conditions Code (2020), which specifically address issues related to gig workers by legally recognizing them for the first time and granting statutory entitlements such as social security coverage, minimum wages, and formalization. This is historic and a milestone in the labour movement of India. However, comprehensive protections like collective bargaining rights and algorithmic transparency remain grey areas. Moreover, the Codes, which are the consolidation of the earlier dozens of labour laws, still stand the test of implementation in the face of skeletal enforcement machinery in States, decriminalised penal provisions, and protracted trials.

There are some effective models on the other side of the globe. The EU’s Platform Work Directive (2024/2831), effective December 1, 2024, adopts a more comprehensive, worker-centric approach, prescriptive and enforcement-oriented, focusing on employment presumption, algorithmic transparency, and data rights to combat misclassification and exploitation. With regard to worker classification, the EU shifts the burden to platforms for fairer status, while India chooses the contractor model that may allow room for deliberate misclassification. In social security benefits, the EU links it to full employment rights, whereas India, while mandating contribution by the employer, caps it at 5 per cent of worker payments and also makes it voluntary for small platforms. Likewise, in wages and payment, no doubt, the Codes have stringent provisions on explicit overtime but are devoid of teeth when it comes to gig workers, whereas EU frameworks link it to full employment rights. In algorithmic management and transparency, India is silent, leaving workers vulnerable to opaque ratings and incentives, and according to experts, it is thus risking “glorified informalization.” The EU’s Platform Work Directive strikes at the root of the problem by addressing “black box” control. With regard to collective rights and bargaining, the EU empowers organisations (e.g., via works councils), while Indian laws grant no explicit union rights for gig workers and limit voice mechanisms in the gig sector. Importantly, enforcement and penalties in the new Indian Codes are limited to digital compliance; the EU framework in this regard is more robust with dedicated channels and higher penalties.

Apart from reducing unemployment, the most significant contribution of the platform economy, often unnoticed, is redefining the sociology of employment in India, which is traditionally governed by the criteria of ‘ascription’ on the basis of birth rather than ‘achievement’—a unique characteristic of Western societies. The gig economy, transcending the lines of caste, faith, or language, promoted ‘dignity of labour’ as the sole criterion for work. The inclusivity provides quick access for unemployed youth from marginalised classes to markets, ensuring equity, a necessary component of the growth narrative. According to M. Graham, I. Hjorth, and V. Lehdonvirta (‘Digital Labour and Development’, 2017), the gig economy will play a critical role in the economic growth of countries since it promotes innovation, boosts productivity, and increases digital labour force participation. India, with its huge working-age population, is better poised than most countries to leverage the opportunity, provided it enhances the pace of urbanisation—a precondition for the platform economy.

“Well begun is half done,” they say. A good beginning has been made by India in regulating the gig economy through the new Labour Codes 2025, and especially in addressing the issues of job security and social benefits of the youth workforce engaged in it. It would further do good to incorporate, in the Codes, sooner or later, some more effective provisions and best practices as seen in the EU framework.

Views expressed are personal. The writer is a former Additional Chief Secretary of Chhattisgarh