Lag between Introduction to implementation: Why gig economy needs a human touch

First Post

29-07-2025

An International Labour Organisation report defined the gig economy as 'labour markets that are characterized by independent contracting that happens through, via, and on digital platforms.' This sector boomed at the onset of the Covid-19 crisis and has continued to grow exponentially globally with a compounded annual growth rate of 16.18 per cent between 2025 and 2033.
Most digital labour platforms classify gig workers as 'independent contractors' or 'freelancers'. This means they shift the risks associated with labour onto the workers themselves and reduce labour costs. Most importantly they represent the company they work for but they are not on their payrolls. Workers, in return, theoretically gain flexibility and autonomy over their working hours. This fundamental model has been adopted worldwide by platforms like DoorDash, Uber, Glovo, and Swiggy among others. However, as the gig economy has grown, so have its problems.
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Dark side of the gig boom
In 2025 the Human Rights Watch published an article titled The Gig Trap: Algorithmic, Wage and Labor Exploitation in Platform Work in the US, which detailed the condition of the gig economy in the United States and the exploitative practices workers are forced to endure. Those deliveries within minutes from food to books to apparel display the might of the digital but hide the miseries of those that land on your doorstops to deliver. These digital platforms shadow their workers constantly more to monitor rather than secure and collect data on everything they do from 'office badge swipes, email exchanges, browsing histories, keystrokes, driving patterns, and rest times' to social media usage and health and fitness habits.
Mobile usage is a phenomenon in India and the apps that make daily lives easier for the people whether you are based in a Tier-1 or Tier-2 city or even a Tier-3 area are being used daily at madding pace. There is no doubt that the gig trend has increasingly generated jobs over the years but unfortunately even India is not free from the algorithmic management of the workforce who live under constant pressure to perform and maximise on deliveries. Gig workers are perennially caught in the nightmarish thoughts that their IDs will be suspended or their accounts will be deactivated if they don't fulfill the unknown requirements of the algorithm.
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Additionally, aggregators have begun to take higher commissions with companies like Uber and Ola taking 40 per cent and 30 per cent commissions, respectively, from their drivers. Long shifts, unsafe working conditions, and dangerous driving have grown to be a part of every Indian gig worker's life. The gig economy is a sector with massive potential in the Indian context, with the ability to provide up to 90 million non-farm jobs and an additional 1.25 per cent to the GDP in the long-term. However, as platforms become ambitious and workers become frustrated, the widespread labour rights issues could overshadow the economic boom.
Global push for platform regulation
A pioneer in gig economy legislation, Spain's left-wing government passed the Rider's Law in August 2021. This law reclassifies Spain's food-delivery 'riders' from freelancers to employees, thus giving them access to rights such as fixed pay and sick leave. However, platform companies in the Spanish market such as Deliveroo and Uber Eats have found it easier to face the fines incurred by non-compliance rather than reclassify their delivery riders as employees and raise operational costs. Three years after the law passed, facing legal challenges, Glovo announced its decision to switch to an employment-based model. This switch is predicted to lose the company €100 million in profits over 2025. Spain's story is a key example in the progress of gig economy regulation: the introduction of laws with lagging implementation.
India is one of the largest contributors to the global gig economy and, according to Niti Aayog, is projected to grow to 25-35 million gig workers by 2029-30. Unfortunately, this gross expansion comes at the cost of the workers themselves. Rajasthan, under the Congress chief minister Ashok Gehlot, pioneered gig economy regulation in 2023 when it passed The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023. However, two years and a change in governance later, the Act is still to be implemented. In May 2025, Karnataka passed The Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025 in an attempt to regulate the gig economy after an increase in strikes in the Bengaluru region. Implementation of the measures detailed in the Act are said to begin six months after passing, and thus only time will tell.
Both the International Monetary Fund and World Bank have recognised the labour rights issues of the gig economy as an important one. The IMF recognises that regulating gig economy platforms as employers is a central public policy issue. This would enable the gig workers to formally engage in collective bargaining and create a grievance redressal mechanism. It also emphasises the need for regulations that address income instability, lack of job security, and the absence of social protection for gig workers. The World Bank has noted that inclusive legal infrastructure is considered crucial for sustainable gig work and consequently recommends an incremental, data-driven approach. By using regulatory sandboxes to innovate and experiment with social insurance, collect gig worker data, and build a regulatory framework, the World Bank presents a model that can allow stakeholders to keep pace with digital labour markets.
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When interests collide
The gig economy is new. New for consumers, for labourers, for business, and for the government. It is ultimately a game of satisficing where companies look for profit, workers look for salary and the government looks for policy. As the gig economy and digital labour markets dynamically evolve and change, countries around the world attempt to regulate them. The problem, however, will not be the introduction of laws but rather the implementation of them. For a country like India, where digital is the newfound soul to function, the government must ensure that the hearts that beat behind this revolution are not caught in an unending tale of despair. From labour-friendly policy formation to ensuring companies follow them to the tee or else face strict penalties, the government can make a huge difference in the way the country's gig economy functions. Unlike Spain, where profit-driven businesses stand in defiance of increasing regulatory pressures that have been mounting since 2021, India can script a hopeful and helpful gig economy future.