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The Exploitation Of The Gig Economy In India




An emerging trend, yet not many know of the emerging term. A labour market where work is done through freelancers and contracts is termed as “Gig Economy”. This definition is in contrast with permanent jobs. Short-term engagements between organizations and employees are assigned a slang word called ‘gig’. The gig economy comprises part-time workers, freelancers, independent contractors, contract workers, and project-based workers. Additionally, there is a new entrant in the gig economy in India, namely internships. The gig economy has become popular in the United States. It has been projected by Intuit that by 2020 over 40% of Americans would be working independently on a contract basis. India is not far behind, it ranks 2nd in the global freelance workforce after the United States. 


The gig economy is soon to takeover a large labour market.


The rise of the gig economy is mainly due to the following reasons: there is a persistent competition in the labour market due to digitization, mobile and portable work, the millennial generation, changing lifestyles, work-life balance, and the notion of “India is a cheap labour market”. At an average the minimum wages for Indian freelancers is Rs. 10,500 per month. As opposed to China’s freelancers which stands at Rs.16,600 per month. The Government of India has also begun its initiative to push freelancers through the Digital India Program (DIP). But, does India’s economic situation support a gig economy?


The gig economy concept is helping companies reduce labour costs. Few freelancing work, internships, independent work done by Millenials remain unpaid. Unpaid work affects the labour market aggressively. The unpaid ‘gig economy’ falls under the secret cutting costs bracket. The paid work in the gig economy doesn’t prove to be ‘good enough’ for the workers. India’s current economic situation does not support a gig economy concept due to the fall in aggregate demand and fall in wages. The demand-side constraints that Indian economy is currently undergoing provides weak support to the gig economy. With 15 million freelancers in India who comprise of the temporary workforce both paid and unpaid, the gig economy may tend to be unfruitful for the country.


The Fair Labour Standards Act under United States Department of Labour has established norms for minimum wages and overtime pay for the private and public sector. Additionally, it prescribes at least the federal minimum wage for freelance or independent workers. According to a survey conducted by the Economy at Columbia University’s Teachers College and the Institute on Education the quality of paid internships remains higher than unpaid ones. 


The summer months, from April to July prove to be the time of seasonal employment in the labour market. The summer break for Millenials prove to be a boon for companies who want to introduce ‘stealth labour costs’ meaning, the labour costs which can’t be seen as they haven’t been incurred. 


Make in India initiative has added investments in industrial and domestic operations. This indeed boosts the technical jobs, factory, and assembly work. Most companies’ manufacturing units remain in two and three-tiered cities. These cities boasts of India’s skilled labour market. According to TeamLease, 1.3 million Indians have migrated to the top 5 cities namely, Hyderabad, Delhi, Bengaluru, Mumbai and Chennai. Close proximity to the skilled labour market and the gig economy helps companies reduce operational costs. But, are companies exploiting the gig economy?


Gig economy tends to be exploitative due to the overburdening and stress caused to the workers.


The availability of ‘cheap labour’ pushes the companies to draw the most work from what they consider their advantage. Indian start-ups employee most freelancers and unpaid interns. They hire 50% of freelancing workforce. Not only are the lower management employees freelancers and gig economy members, but also the CFO’s have been hired as temporary workers for organizing and auditing the company’s finances. This helps in increasing the operational savings by 70%. 


Therefore, the gig economy may not benefit the Indian economy to a large extent. Moreover, it is derived from the theory of ‘work more, earn less’. According to Payoneer, out of the many freelancers, women account for 22% and are paid less as compared to men. The level of income satisfaction across the world is 46% but India stands at 36%. According to TeamLease, Delhi has contributed 560,600 people to the gig economy. As of 31 March 2019. Bengaluru forks out 252,300 workers in the second half of 2019. 


The gig economy may not cater to the whole but to a part. It as a niche where it seems feasible for a few companies and employees. Most of the Indian firms that associate themselves to gig economy are Swiggy, Zomato, Ola, Uber, But, exploitation remains a cause of concern. According to experts like Lawrence Katz and Alan Krueger, the former being from Harvard University, said that there was a steep rise in gig economy in 2015. The reason being financial constraints of workers, and seasonal employments like internships. 


Businesses have now taken advantage of the gig economy and have settled their liabilities in the balance sheet by adding independent workers as their assets. 


The gig economy is taking over due to the digital era. The gig economy pioneers the virtual workforce. The Millenials who will account for 75% of the workforce across the world will have a major role to play by being a part of the virtual labour market. The want for work-life balance, side-finance, portable work, and an obligation to comply for acquiring a degree may tend to be the reasons for Millenials. For companies, on the other hand, a cheap labour market, higher productivity, opportunity costs, operational savings, remain the major reasons to takeover the gig economy concept, and why not? It has been reported that 53% of telecommuters work for over 40 hours in a week as against the non-telecommuters. 


Though the gig economy is a collaboration, it tends to exhaust over time as it matures and the loopholes are capitalized on. 

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Judge rejects Prop. 22 backers’ attempt to change gig-work ballot language




A Sacramento Superior Court judge on Tuesday rebuffed backers of Proposition 22, a referendum aiming to keep some gig workers as independent contractors, in their lawsuit claiming California Attorney General Xavier Becerra wrote a slanted description of their measure.

The attorney general writes the title, summary and label of an initiative that appear on the California ballot and ballot pamphlet and are vital to communicating to voters.

The Yes on 22 campaign charged that Becerra was biased and wrote language painting the measure in a negative light because he is suing Uber and Lyft, two of the major backers of Prop. 22, over their driver classification. Becerra’s lawsuit says that Uber and Lyft drivers should be employees under AB5, California’s new gig-work law — which is exactly what Prop. 22 seeks to avoid.

Besides Uber and Lyft, the other backers of Prop. 22 are DoorDash, Postmates and Instacart. The five companies have put up $110 million so far in their quest to convince voters that drivers and couriers should not be employees, which the companies say would destroy the flexibility those workers rely on. It would also cost the companies hundreds of millions of dollars, and potentially increase the prices consumers pay for rides and deliveries.

Becerra’s language accurately informs voters about the initiative, wrote Judge Laurie Earl in a tentative decision that will become final unless Yes on 22 requests a hearing.

The campaign has until Wednesday afternoon to make that request. The hearing would occur Thursday morning with each side limited to 30 minutes of oral arguments. Yes on 22 did not immediately say whether it will request the hearing.

The title written by Becerra that Yes on 22 objects to reads: “Exempts app-based transportation and delivery companies from providing employee benefits to certain drivers.”

The Yes on 22 campaign charged that “exempt” was a prejudicial term.

But the judge disagreed. “Read as a whole, this is not false, misleading, or inaccurate, and the use of the word ‘exempt’ in the ballot title does not make it so,” Earl wrote. In fact, she wrote, the ballot measure would exempt the companies from complying with various state laws applicable to employees.

Earl rejected Yes on 22’s claim that Becerra’s case against Uber and Lyft meant he was not impartial.

“This lawsuit is irrelevant,” the judge wrote, pointing to precedents that elected state officers are entitled to take public positions on matters of public importance.

The Yes on 22 provided a written statement responding to the ruling from Doug Mead, a freelance writer and Uber Eats and Postmates driver from Palm Springs. The campaign said he was among thousands of drivers who support remaining independent workers.

“The Attorney General is playing politics with the jobs of nearly one million Californians and threatening the services so many families rely on,” Mead’s statement read. “His biased and prejudicial description of Prop. 22 only benefits his special-interest supporters while doing a disservice to California voters.”

The No on 22 campaign, which is backed by organized labor, applauded the tentative ruling.

“The judge’s thoughtful deliberation on this ruling ensures that every Californian will know the unbiased truth when they fill out their ballots in November: Uber, Lyft, and DoorDash are trying to buy themselves a special exemption to roll back drivers’ rights,” said Mike Roth, spokesman for the No on Prop. 22 campaign.

Carolyn Said is a San Francisco Chronicle staff writer. Email: Twitter: @csaid

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IWGB wins workers status and rights for gig economy couriers at CitySprint




CITYSPRINT couriers’ status as workers with rights was confirmed once and for all today after the company was dragged back to an employment tribunal for the third time.

The Independent Workers Union of Great Britain (IWGB) claimed victory in its battle to gain basic employment rights for five gig-economy workers at the company. 

CitySprint had changed workers’ contracts rather than comply with a previous ruling that they are entitled to holiday pay and the legal minimum wage. 

The company could now be forced to give them thousands of pounds in lieu of the holidays they were denied once its financial liability is established at a final hearing in October.

Claimant Phil Weber said: “This victory over CitySprint shows what strength there is in being part of an active front-line union like the IWGB. I hope it gives others courage. 

“So many ‘gig economy’ courier companies wrongly classify their workforce as self-employed independent contractors. 

“We all know they’re playing the system to deny basic rights like holiday pay and pension contributions, but most workers are afraid to stand up for themselves because, as it is, there’s not enough work to go around and so little job security. We’re left fighting for scraps. 

“But when we are united and fight together, things can turn out very differently.”

The IWGB said it was appalled that it had had to take the company to an employment tribunal three times because the company “was so determined” to deny workers basic protections. 

But yesterday’s victory shows that even when terms of contracts are manipulated, union organising can still win the fight for workers’ rights, the IWGB added. 

General secretary Dr Jason Moyer Lee said: “CitySprint and other ‘gig economy’ companies are making a mockery of the British legal system.  

“If the law were enforced and sanctions were real, CitySprint wouldn’t have dreamed of simply acting like it hadn’t already lost a tribunal claim over its couriers’ workers’ rights. 

“In the absence of the state enforcing the law, the IWGB will continue to hold these cowboy companies to account.”

A separate £43,668.86 holiday pay claim is being made against Royal Mail-owned eCourier on behalf of three couriers transferred from CitySprint.

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Gig-Workers Across CA Protest in Advance of Judge’s Ruling




Gig-Workers Across California Protest on Thursday 8/6 in Advance of Judge’s Ruling

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Gig-Workers Demand That Uber And Lyft Obey AB 5

This Thursday, August 6, gig-workers across the state of California will be participating in actions demanding that Uber and Lyft obey AB 5 and immediately reclassify their workers as employees. Workers will also be demanding that the companies drop their Prop 22 Ballot Initiative (which the company’s have committed to spend $110m on) which would roll back gig-workers’ rights. This statewide day of action comes in advance of a judge’s ruling on the preliminary injunction motion filed by the California Attorney General in the state’s lawsuit against Uber and Lyft, which will come down at 1:30 PM on Thursday.


“Surreal doesn’t even begin to describe this moment,” Seth Klarman noted in his second-quarter letter to the Baupost Group investors.  Commenting on the market developments over the past six months, the value investor stated that events, which would typically occur over an extended time frame, had been compressed into just a few months. He noted Read More

In Oakland, drivers from Gig Workers Rising, Rideshare Drivers United & We Drive Progress will be holding a rally titled “Workers Can’t Wait” to demand the employee status they are legally owed under AB 5. Workers will gather at the East Oakland Lyft Hub and, starting at 11:30 AM, various drivers will speak about the grave mistreatment by the companies and demanding that voters vote no on Prop 22.

In Los Angeles, Mobile Workers Alliance and Rideshare Drivers United will host a joint press conference at a Lyft hub. The action is scheduled to begin at 10:30 AM.

California Attorney General Xavier Becerra and a coalition of city attorneys filed an injunction in June to require Uber and Lyft to immediately begin obeying AB 5, which took effect in January. AB 5 requires the companies to reclassify their drivers as employees. Uber and Lyft argue that they shouldn’t be required to follow the law until after voters vote on Prop 22 in November. Becerra argues the harm currently facing drivers is so great that it would be neglectful to wait until the end of the current litigation. The law is clearly on the workers’ side.

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