INTRODUCTION
The Gig workforce is bringing about a lot of global economic transformation.[1] Instead of long-term contracts with a single employer, gig workers take on short-term projects or “gigs” for multiple clients or companies unlike an employer. The gig economy in India, driven by digital platforms, has transformed employment patterns, offering flexibility in various commercial sectors. According to estimated from NITI Aayog, the aggregate amount of gig and platform workers throughout the nation exceeded 8 million, with projection indicating it could reach 23.5 million by 2030[2], which makes them a powerful economic force for the country.
THE HIDDEN CRISIS: WAGE THEFT IN INDIA’S GIG ECONOMY
The gig economy is a rising golden platform for future prospects in employment, industrialisation of digital economy and GDP growth, however, the level of job security environmental conditions and legal protection provided to employees is quite misleading and disheartening. The National Coordination Committee on Gig Workers (NCCGW), a coalition of various unions representing gig and platform workers, rallied in front of Parliament in 2023 to urge the government to create a model law that would provide these workers with social protection and job security.[3]
Recently in Delhi, a complaint was filed at Delhi’s Labour Department on behalf of 50 Zepto workers alleging that they were lured with promises of ₹30,000 per month, free accommodation, and food but when they arrived they found sub-par living conditions, reduced pay, and unpaid wages.[4] The Telangana Gig and Platform Workers’ Union (TGPWU), in May 2025, had written to the state’s Department of Labour while holding a “peaceful” strike as they remain deprived of basic labour protection and welfare which addresses drastic reduction in the per-delivery rate and no guaranteed minimum income despite long working hours.[5]
HOW PLATFORMS EXPLOIT WORKERS
According to a report from Fairwork India Ratings published in 2021, both Ola and Uber scored 0 out of 10 when assessed against the five fundamental principles of fair gig work, i.e., fair pay, fair conditions, fair contracts, fair management, and fair representation.[6] The 2022 report by NITI Aayog[7] titled ‘India’s Booming Gig and Platform Economy’ also documents systemic exploitation like employment precarity, financial uncertainty and their legal vulnerability. Beyond the fundamental misclassification issue, these platforms have created what amounts to modern-day digital exploitation through three major particularly dismaying practices:
- Demanding High Commissions –The workers only receive a fraction of their earnings after substantial hidden deductions from company commissions, which amounts almost 10% to 35% of their total income.[8] Also, a 2024 NITI Aayog report found that 90% of gig workers lacked savings and face high vulnerability.
- Opaque Algorithmic Manipulation – The use of complex algorithms for monitoring and evaluating the performance metrics of workers leaves no transparency in the system for checks of exploitation for the gig workers
Arbitrary Termination and Lack of Recourse Mechanism – Platforms frequently implement ‘ID blocking’, which leads to gig workers being unilaterally barred from accessing their platforms significantly impacting their ability to earn their daily survival wages. The PAIGAM Report indicated that 83% of drivers for app-based taxi services and 87% of delivery personnel faced issues with ID blocks or being deactivated.[9]
INSUFFICIENCY OF THE CURRENT LEGISLATIONS
The current legislative landscape consists of fragmented statutes with limited applicability. The Indian Contract Act, 1872[10] does not specifically mention about gig workers. While Contract Labour Act, 1970[11] theoretically extends welfare obligations like health, restrooms and equal wages etc. under section 12[12] and section 21[13], these protections rely upon identifying gig workers as “contract labour” and platforms as “contractors” thereby not addressing the actual picture. Customary regulations like Payment of Wages Act 1936[14], Industrial Disputes Act, 1947[15] and Minimum Wages Act, 1948[16] remain unfruitful as platform workers are not considered as part of the “employee” definition.
The 2020 Social Code[17] represents a commendable attempt to recognise and protect gig workers through adoption of a clear definition under Section 2(35).[18] However, the statutory framework exhibits significant structural limitations, with gig worker protections confined exclusively to Chapter IX of the Code, with substantive provisions restricted to merely three sections – 112[19], 113[20], and 114[21]. While section 114[22] confers upon the Central Government the requisite powers to implement specialized social security mechanisms workers, it lacks proper power divison between the Centre and the state governments. Furthermore, its weak implementation has hindered various prospective developments.
SOME JUDICIAL PRONOUNCEMENTS ON GIG WORKERS
- The Indian Federation of App Based Transport Workers (IFAT) v Union Of India (UOI) (2021) – This landmark case, being the 1st Public Interest Litigation of its kind, with judgement still pending. It invokes Article 14, 21 and 23[23] of the Constitution demanding better working conditions and equality for the app based platform and gig workers recognised as “independent contractors” by the corporations, a designation that denies them access to social security or labour protection.
- The Food Corporation of India (FCI) Temporary Workers Union vs. FCI (2017): In this case, the Supreme Court ruled that temporary workers who were hired by the FCI through contractors should receive equal wages and benefits as permanent employees doing the same work. The court held that these workers were “employees” under labour laws and that the use of ‘contractors’ did not absolve them of their obligations to provide them with equal pay and benefits.[24]
- Uber BV v. Aslam – The court in this case stated that workers are entitled to “worker” status under employment law when a digital platform has significant control over them through unilateral fare-setting, performance monitoring, required routes, and restrictive contract terms. This is true even if the workers’ contracts designate them as independent contractors.[25]
- Dynamex Operations West, Inc. v. Superior Court[26]– This landmark case landed down by the California Supreme Court, established a new criterion known as the ‘ABC Test’. Under this test, companies are required to demonstrate that their workers qualify as ‘independent contractors’, who are not entitled to any social benefits, by satisfying all three conditions of the ABC Test. If not, the workers should be categorized as employees who are eligible for all social benefits and protections..[27]
THE ROAD AHEAD: LEGAL RECOMMENDATIONS
- Legislative Ambiguity – The 2020 Social code submit fundamental definitional flaws. It provides overlapping and ambiguous classifications for ‘gig worker’, ‘platform worker’ and ‘unorganised worker’. Additionally, the Code fails to recognize several other categories of platform-based workers, leaving significant gaps in coverage. The legislation also lacks enforcement deadlines and accountability mechanisms for implementing its provisions[28]. To address these shortcomings, the government should either take up a comprehensive revision of the 2020 Code or introduce a separate, focused national legislation for the gig workers.
- Algorithmic Transparency and Data Privacy – Platform companies must incorporate algorithmic transparency provisions be included in their agreements requiring them to disclose how their algorithms determine their pay rates, commissions breakdowns and cuts, work allocation parameters and performance ratings.
- State – Level Implementation Approach – Despite the shortcomings, the codification is critical to ensure that the informal workers receive due recognition and welfare. The Rajasthan Platform-Based Gig Workers Act, 2023[29] is a pioneer in developing a legal structure to tackle the insufficient protection and benefits for gig workers. The Karnataka government recently recognised gig workers as employees and curated a specific scheme providing social security as a life insurance and accidental insurance.[30]
- Specialised Redressal Forum – Owing to the substantial expansion of the gig economy in the future, the government must set up specialised redressal forums to address the challenges of the tech based economy for workers as well as other grievances.
- Social Security Fund for Gig Workers – In order to share the responsibility of the levy between the government and platform aggregators for the benefit of the gig economy, a specific social security fund should be jointly funded by the Union government and platform businesses.[31]
CONCLUSION
By 2030, without action, 23.5 million Indians will work without basic protections. The pursuit of digital innovation, free-market expansion, and economic progress from an industry representing 1.25% of GDP cannot excuse the systematic injustices exposed through persistent labour unrest and documented cases of harsh, dehumanizing conditions endured by vulnerable gig economy workers. The evidence of luring rural workers with promises of ₹30,000 wages, manipulating cuts through cryptic algorithms, arbitrary ID blocks and 0/10 score on fairness metrics are proof of systemic failure. The path ahead calls for coordinated effort from multiple fronts. The Parliament must prioritize long-pending IFAT v UOI case for a prompt legislative action or look into the revision of existing frameworks for a proper persual, collaborative social security funding mechanisms and establishment of redressal forums to move forward with India’s commitment to equitable development in the digital era.
Author(s) Name: Shivangi Raj Verma (Dr. Ram Manohar Lohiya National Law University)
References:
[1] NITI Aayog, ‘India’s Booming Gig and Platform Economy: Perspectives and Recommendations
on the Future of Work’, (NITI Aayog, June 2022) <https://www.niti.gov.in/sites/default/files/2023-06/Policy_Brief_India%27s_Booming_Gig_and_Platform_Economy_27062022.pdf> accessed on 5 June 2025
[2] Ibid
[3] ‘Gig workers demand model law, labour rights, social security’, (The Hindu, 27 July 2023) <https://www.thehindu.com/news/national/gig-workers-demand-model-law-labour-rights-social-security/article67128510.ece> accessed 06 June 2025
[4] Avantika Tewari, ‘‘Zepto workers’ strike: In India’s gig economy, the continuing struggle for dignity’, (The Indian Express, 20 May 2025) <https://indianexpress.com/article/opinion/columns/zepto-workers-strike-in-indias-gig-economy-the-continuing-struggle-for-dignity-10033599/> accessed 06 June 2025
[5] ‘‘Low wages, unreasonable work pressure in Zepto; Telangana gig workers’ union writes to labour dept’, (The Print, 23 May 2025) <https://theprint.in/economy/low-wages-unreasonable-work-pressure-in-zepto-telangana-gig-workers-union-writes-to-labour-dept/2635711/ > accessed on 04 June 2025
[6] ‘Ola and Uber score 0/10 for gig worker conditions in new report’, (The Economic Times, 30 Dec 2021) <https://economictimes.indiatimes.com/tech/tech-bytes/ola-and-uber-score-0/10-for-gig-worker-conditions-in-new-report/articleshow/88572332.cms> accessed on 4 June 2025
[7] Ibid at 1.
[8] ‘Calling out exploitative labour dynamics on platforms’ (Civilsdaily, 21 Nov 2024) <https://www.civilsdaily.com/news/calling-out-exploitative-labour-dynamics-on-platforms/> accessed 03 June 2025
[9] ‘Prisoners on Wheels: Report on Working and Living Conditions of App-based workers in India’, (Paigam, 2024) <https://tgpwu.org/2024/03/13/prisoners-on-wheels-report/> accessed on 6 June 2025
[10] The Indian Contract Act 1872
[11] The Contract Labour (Regulation and Abolition) Act 1970
[12] The Contract Labour (Regulation and Abolition) Act 1970, s 12
[13] The Contract Labour (Regulation and Abolition) Act 1970, s 23
[14] Payment of Wages Act 1936
[15] Industrial Disputes Act 1947
[16] Minimum Wages Act 1948
[17] The Code on Social Security 2020
[18] The Code on Social Security 2020, s 2(35)
[19] The Code on Social Security 2020, s 112
[20] The Code on Social Security 2020, s 113
[21] The Code on Social Security 2020, s 114
[22] Ibid
[23] The Constitution of India 1950
[24] Gokul Prasad, ‘The Economic Uncertainty of Gig Workers and their Welfare in India: A Need for New Law’ (IJLMH, 2023) <https://ijlmh.com/paper/the-economic-uncertainty-of-gig-workers-and-their-welfare-in-india-a-need-for-new-law/#> accessed on 4 June 2025
[25] Uber BV and others v Aslam and others, [2021] UKSC 5
[26] Dynamex Operations West, Inc., v. The Superior Court of Los Angeles County and Charles Lee [2018] 4 Cal.5th 903
[27] Haini Tayal, ‘Regulating the gig economy in India: How secure are gig workers?’ (Supremo Amicus, January 2022) <https://supremoamicus.org/wp-content/uploads/2022/01/Haini-Tayal-.pdf> accessed on 5 June 2025
[28] Divya Shekhar, ‘Why the Code on Social Security, 2020, misses the real issues gig workers face’ (ForbesIndia, 15 October 2020) <https://www.forbesindia.com/article/take-one-big-story-of-the-day/why-the-code-on-social-security-2020misses-the-real-issues-gig-workers-face/63457/1> accessed 05 June 2025
[29] Rajasthan Platform Based Gig Workers (Registration and Welfare) Act 2023
[30] Sandeep Moudgal, ‘Despite lack of funds, Karnataka government issues order on gig workers’ welfare’ (Times of India, 11 September 2023) <https://timesofindia.indiatimes.com/city/bengaluru/despite-lack-of-funds-karnataka-govt-issues-order-on-gig-workers-welfare/articleshow/103583436.cms> accessed 05 June 2025
[31] Akshat Sogani, ‘Legal Ambiguities Ensure the Gig Economy Continues to Let Down Indian Workers’ (The Wire, 30 January 2025) <https://thewire.in/labour/legal-ambiguities-ensure-the-gig-economy-continues-to-let-down-indian-workers> accessed 06 June 2025
