Nitin Pai: Don’t overburden the gig economy—it offers millions of Indians their first job

Subscribe to enjoy similar stories. The public debate over the gig economy over the past week has centred around the tough working conditions and sharp management practices of the delivery-platform industry. Personal anecdotes and newspaper reports have highlighted how despite working hard and long to satisfy performance algorithms, gig workers earn just enough to eke out a living.

This was rebutted by one major platform with data that showed gig workers made a net income of around ₹21,000 in a typical work-month, and that delivery times were optimized by increasing store density, not by incentivizing risky riding. Still, after the Union government’s intervention, platforms have stopped promising 10-minute delivery. Unfortunately, the anecdotal and emotional framing of the debate does a disservice to the very cause it seeks to promote.

Government intervention is not the answer: we are still trying to untangle the labour laws that prevent Indians from working in manufacturing industries. Labour regulations tend to create more jobs for labour inspectors while employers replace labour with capital. Therefore, we must be careful what we wish for.

So, what is the public interest in the gig economy? There are three big issues: raising income levels, smoothening income volatility and addressing negative externalities. None of these calls for imposing regulations on the gig economy platforms, but rather implementing public policies that make everyone better off. Let’s consider each of these in turn.