Fast track social security for gig workers
The Indian gig economy has emerged in the past decade as a powerful engine of economic growth. Since the surge in the start-up and new-age platform companies over the past decade, many of them continue to provide economic opportunities to these gig workers. These gig workers are typically unskilled youth and benefit both monetarily and in skills through this employment. Large companies play a pivotal role in transforming the lives of millions of these gig unskilled workers, as these people get employment and wages commensurate with their tasks, with flexibility in work hours.
The gig economy encompasses a diverse range of work, including e-commerce, quick commerce, ridesharing, food and grocery delivery, urban services, freelancing, and other on-demand services. The current estimation for gig economy jobs in India is at eight to 18 million, which is projected to increase to over 90 million jobs in the non-farm sector in the next ten years. In the next decade, the gig economy in India will be $250 billion or almost 1.25% of India’s gross domestic product (GDP). Large companies and gig workers are responsible for each other’s success and growth, sharing a symbiotic relationship. The Code of Social Security should be implemented without further delay to provide clarity to both platform companies and gig workers.
Gig workers have low and inconsistent wages, no guaranteed income, lack of benefits such as ESIC and PF, no social security or job security, no paid time-off, sick leaves, maternity leaves and over-time payments. Hence there is a pressing need for a social security net for gig workers. Yet, more than two years after the Parliament approved a statutory framework for social security of gig workers under the Code on Social Security (CSS), not a single gig worker has received benefits under it. The new labour codes are soon to be implemented, and if India is serious about the future of platform-based work, the year 2026 must mark the shift from legislative intent to operational reality. Quick implementation of the social security net, created through contributions made by platform companies, is much needed. When the platform companies are keen, the government needs to move fast to create the social security fund.
Platform companies should be mandatorily required to contribute to a dedicated social security fund through a revenue-linked levy, ideally set at 1 to 2% of annual turnover. A turnover-based contribution, as already envisaged under the CoSS, is the simplest, efficient and enforceable mechanism, as it avoids complex worker-level, state-level or transaction-wise computations, significantly lowers compliance costs, and enables predictable fund mobilisation. Not to mention this is the right thing to do. Since platforms earn their revenues on the back of all the hard work done by gig workers, it is only right that they contribute a proportion of this revenue toward coverage of their social security benefits. To safeguard platform viability and prevent unintended impacts on employment generation, the contribution should be capped at 5% of aggregate worker payouts. This model must be standardised nationally, with uniform rules across states, to eliminate regulatory arbitrage, reduce compliance uncertainty, and provide the clarity necessary for platforms to scale while ensuring universal and reliable social security coverage for gig workers.
Gig workers must be registered on the e-Shram portal and eligible workers may be issued a Universal Account Number to track benefits. The National Social Security Board for Unorganised Workers shall be the board for the welfare of gig workers and platform workers.
Major platform companies, like Amazon, Uber, Flipkart, etc have not only welcomed the move of creation of a social security fund dedicated to gig workers but have stated they are ready to bear the financial burden by contributing 1 to 2% of their revenues. This stands in contrast to the traditional corporate push back to changes in labour regulations.
Ensuring the well-being of gig workers is crucial for the sustainable growth of the gig economy in India. Large companies are increasingly recognising the importance of providing a safe and supportive work environment. Initiatives such as health insurance, mental health support, and safety training are becoming more prevalent. For example, Uber’s Sulabh partnership and Zomato shelter rest points aim to combat worker fatigue. Amazon, Uber, Ola, Flipkart, Zomato and other platform companies have been working to get the people working at its sites enrolled under two key government programmes: E-Shram and Health ID.
Platform companies play a crucial role in transforming gig workers with training programmes, certifications, and access to online learning platforms, equipping them with in-demand skills and opening doors to higher-paying opportunities. Swiggy and Zomato have introduced skilling programmes to enhance the professional skills of gig workers. Similarly, Amazon and Uber provide training in safe driving, customer service, and efficient customer handling, empowering workers with valuable life skills.
As India’s gig workers are brought into the social security ambit, a focus on collaboration and shared responsibility by policy makers, central and state governments, and companies will be critical in ensuring its long-term success and positive impact on millions of lives. The earlier the rules are finalised and implemented, the faster the activation of the safety net for millions of gig workers. The future of India’s gig economy hinges on empowering the large companies to be transformative forces, ensuring worker social security, upskilling the workforce, fostering innovation, and propelling economic growth.
This article is authored by Shriram Subramanian, founder and MD, InGovern Research Services.
