The gig economy is part of a crucial transformation occurring in India’s work landscape, and ride-hailing companies are examples of platforms on which “gigs” can be found. The Indian ride-hailing market was projected to grow by 15.5 percent until 2023; the COVID-19 pandemic, however, has disrupted the trajectory. The drivers of these companies—numbering approximately four million—are considered as “independent contractors” and thus lack basic social protections. Now the health crisis is threatening their livelihoods. We will look at the example of 2 ride-hailing companies OLA and Uber.
Introduction
Digital technologies fundamentally change how people work and one of the key transformations in the future of work is the rise of the so-called ‘gig economy’. Central to the gig economy is so-called “gigs”, i.e. temporary and often short-term jobs, which can be found through digital labor platforms that connect job providers and job seekers. The ride-hailing giants Uber and Ola are prominent examples of such platforms, with their on-demand taxi services have become widely popular. The US-based Uber began operating in India in 2013, while homegrown Ola, a few years earlier, in 2010. They are the two main competitors in the Indian market, which is worth around US$ 30 billion and was (before the pandemic broke out) projected to grow by 15.5 percent to US$ 54 billion until 2023. However, the COVID-19 crisis marks a caesura, as an entire workforce of drivers – estimated to be more than 4 million –lost huge parts of their income. A lack of labor protections pushes them to continue working, despite health risks for themselves and their passengers.
Risks of Informal Work Mirrored in the Gig Economy
Gig work deviates from the “standard employment relationship”, in which work is a full time, indefinite, and part of a subordinate relationship between an employer and an employee. Characteristic of the non-standard employment in the case of Uber and Ola is that drivers work on demand, and are referred to as “independent contractors” who are seen as operating their own business and then contracted to provide certain services.
However, this classification is highly controversial. The opposing view is that drivers need to be legally treated as employees because they usually carry out tasks for one or few clients (i.e. Uber or Ola), on whom they strongly depend for their source of income and who closely supervise their work (i.e. through the algorithms of the app). As drivers currently do not have the legal status of employees, they also have fewer employment rights (with regards to, for instance, minimum income, unemployment benefits, sick leave, and holiday pay). Indeed, gig work is associated with a higher degree of informality. With fewer employment rights, drivers lack adequate protections and are therefore more vulnerable. This section gives an overview of the risks that Uber and Ola drivers are being exposed to during the COVID-19 crisis.
Financial Risks
Drivers work on demand and get paid only when rides are booked and completed. Since India discovered its first coronavirus case on 30 January, offices, shops, restaurants, hotels, and other venues started to close and the public became increasingly wary of venturing out, bringing down the demand for transportation. The earnings of drivers, who mostly depend on their jobs as their primary source of income, plummeted. Beginning on 25 March, a nationwide lock-down was imposed and services of ride-hailing companies like Uber and Ola were prohibited.
During the lock-down, whose repeated extensions lasted until June, some cities and states allowed Ola and Uber to restart limited services to procure essential commodities and provide rides for medical emergencies. For instance, Uber partnered with the online grocery store Big Basket and e-commerce firm Flipkart for the delivery of essential goods, whereas Ola agreed to give 500 vehicles to the government of Karnataka for transporting doctors and for other coronavirus-related activities. Nevertheless, the demand for transportation – be it for people or goods— continued to below. During the lock-down months, Ola experienced a decline in revenue by 95 percent, while Uber had an 80-percent year-on-year decline in its global business in April.
As the country attempts to open up gradually, the demand for transportation remains low, as continued work from home is encouraged and rising infection numbers prevent people from making unnecessary trips outside their homes. As a consequence, drivers have lost substantial amounts of their income; with neither regular nor minimum income, nor access to unemployment benefits, drivers have little else to fall back on and therefore face severe financial difficulties.
Some drivers own the vehicles that they use to provide the taxi services, while others have purchased the cars on finance and pay the amount in installments over a certain period. Another option for drivers is to lease or rent a car, which means they have to pay regular loans and rents to whoever owns the car, which can be a third party or the ride-hailing company itself. For instance, in cooperation with financing partners and car manufacturers, Ola has a cab-leasing program where cabs are bought and lent to drivers. With the current drop in demand and therefore of income, drivers face further financial distress from not being able to pay their financial obligations from financing, leasing, or renting the cars, which they need to perform their jobs.
Health Risks
Drivers are exposed to the risk of getting infected with the highly contagious coronavirus. Passengers are potential carriers and transmission could occur during or after the ride, when they interact and exchange cash, or through touching of contaminated surfaces (e.g. door handles, buttons). The health risk is particularly high for older drivers and those with pre-existing health conditions. In addition, drivers who facilitate medical emergencies or deliver essential goods are also at high risk, because they might have to hand over-purchased goods to people who are home-quarantined with COVID-19 or drive infected people to a hospital.
In case drivers start to feel unwell or fall sick, they are unlikely to seek medical help, as they typically have neither health insurance, which would cover the cost of treatment, nor are they entitled to sick leave. Therefore, drivers face a dangerous trade-off between the risks to their health and that of not being able to pay for food, rent, and bills. Due to severe economic pressure, many drivers may be left with no option than to venture out on the roads and continue to drive as long as possible. Thereby, infected drivers would not only risk their own health but also endanger their passengers and the people, who they live with or care for.
-Article by Punit Chauhan , 3rd year Department of Mechanical Engineering