India’s gig economy, expected to grow at a rate of 17% and reach a gross volume of $455 billion by 2024, presents both a substantial economic opportunity and a pressing challenge for policymakers. The sector has the potential to generate 90 million jobs and contribute 1.25% to the country’s Gross Domestic Product. However, robust frameworks are necessary to balance the interests of independent workers, platform companies, and the broader economy. Predominantly focused on e-commerce, transportation, and delivery, these jobs provide alternative income opportunities and foster workforce inclusion. Yet, they also leave workers vulnerable to issues such as income instability and limited access to social security. To ensure the sector’s growth is inclusive and sustainable, a comprehensive approach is needed to incorporate social protection measures, industry best practices, and fair regulations.
The plight of gig workers in India has garnered significant public attention, particularly following the introduction of gig workers’ bills in Rajasthan and Karnataka. During 2020-2021, approximately 7.7 million individuals participated in the freelance economy, accounting for 2.6% of the non-agricultural workforce and 1.5% of the overall workforce. These figures underscore the critical role of this sector. While these legislative developments signal progress, addressing flexible workers’ core challenges remains essential.
Who is a Gig worker?
Gig workers are currently recognized under the Code on Social Security, 2020, marking their first inclusion in Indian Labour Laws. However, there is still ambiguity regarding the exact characteristics of a gig worker.
Chapter I, Section 2(35) of the Code defines a gig worker as “a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship.” Notably, this definition does not categorize gig workers as employees under the Code. Additionally, Section 2(61) defines a platform worker as “someone engaged in or undertaking platform work,” but this description lacks operational clarity. While platform workers are generally gig workers, as they are compensated on a task basis, not all gig workers qualify as platform workers. Some companies engage gig workers on short-term contracts without relying on digital platforms.
In 2021, the Indian Federation of App-based Transport Workers (IFAT) filed a petition with the Supreme Court, seeking recognition of gig workers as “unorganised workers.” Presently, the contracts between gig workers and the companies that engage them label these workers as “partners” rather than “employees.” In its petition, IFAT contends that excluding gig workers from social security benefits violates their Right to Equality, as it denies them access to the same protections available to other workers in similar circumstances.
Why does the Gig Workers Union Seek Transparency?
When an employee feels disheartened with her boss, her instinct may be to confront him—whether to negotiate or even quarrel. But what happens when the boss is not a person but an algorithm? How can she challenge the decisions of a boss whose methods are beyond her understanding? It is the reality faced by platform-based gig workers today. These workers are aware that algorithms control their livelihoods, yet they find themselves powerless to contest the outcomes. Decisions made by these systems often result in significant material losses, such as reduced earnings or complete deactivation from the platform. When workers seek accountability, aggregator companies often deflect responsibility, claiming the decisions are machine-driven.
Acknowledging these challenges, the IFAT recently presented key recommendations during a meeting convened by the Secretary of the Ministry of Labour and Employment to discuss social security for gig and platform workers. The IFAT emphasized the urgent need for algorithmic transparency and data protection. They proposed that workers’ personal and performance-related data must be safeguarded and called for aggregator companies to share comprehensive information on payouts. Furthermore, they demanded transparency in the algorithms that determine pay, task allocation, working hours, and worker deactivations, ensuring this data is accessible to the workforce.
Algorithmic transparency for gig workers involves making the algorithms used by companies open and understandable. These algorithms significantly impact critical aspects of workers’ jobs, such as pay, working hours, task assignments, and account deactivation. According to the IFAT, workers should have the right to understand how these decisions are made. Transparency enables gig workers to grasp how their performance is evaluated, as well as how their earnings and tasks are distributed. It also helps them detect potential biases or errors in the system, ensuring they are treated fairly and consistently. In a novel effort to promote transparency in aggregator algorithms, Karnataka government introduced the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill, 2024. The bill requires aggregators to disclose, upon request by workers, details about the parameters used for work allocation and denial, worker categorization, the aggregator’s rating system, and the processing of workers’ data.
Effects on Gig Workers’ Fairness and Predictability
The issue of algorithmic transparency is deeply tied to the concepts of fairness and predictability, particularly for workers in the gig economy. Employees in this sector often operate in an opaque environment, where they have a limited understanding of how algorithms determine critical aspects of their work, such as ride or order allocation.
For instance, a recurring challenge for gig workers, such as drivers or delivery personnel, is the lack of clarity regarding the allocation of tasks. One worker might receive a long-distance order, which often results in financial losses because they are responsible for the fuel or other travel expenses. Conversely, another worker might consistently be assigned short-distance orders, which are more financially viable. This inconsistency raises questions about the fairness of the system. What exacerbates the issue is the penalty system embedded within these platforms. If a worker refuses a task—perhaps due to financial impracticality or logistical concerns—they are penalized by the algorithm. This could manifest as reduced task assignments in the future or lower visibility in the system. Such practices leave workers feeling constrained and disempowered, as they cannot make informed decisions without jeopardizing their future earning potential.
From the workers’ perspective, algorithmic transparency is not just a theoretical demand but a practical necessity. They seek to understand the rationale behind task allocation to ensure that the process is equitable and does not unfairly disadvantage some over others. Transparency in the algorithmic decision-making process would allow workers to trust the system and reduce perceptions of bias or favouritism.
Moreover, algorithmic transparency significantly affects the predictability of a worker’s day. Currently, gig workers often face uncertainty about the volume and type of tasks they will receive, making it difficult to plan their workday effectively. Transparent algorithms would provide insights into expected workloads, task allocation criteria, and potential earnings, enabling workers to better organize their schedules and finances. In essence, algorithmic transparency serves as a bridge between workers and the platforms they operate on, fostering trust, fairness, and predictability. By shedding light on how decisions are made, platforms can address workers’ concerns, create a more equitable work environment, and ensure long-term sustainability in the gig economy.
The Urgent Need Is…..
The initiative of the government of Karnataka to introduce transparency in the algorithmic management of platform work is not only commendable but also a groundbreaking step in India. Similarly, the central government must follow suit by enacting strong legislation. The government of India should adopt progressive measures inspired by the Platform Work Directive, which was implemented by the European Union in 2024.
For example, the directive ensures that platform workers cannot be dismissed solely based on algorithmic decisions, requiring human oversight for key decisions that impact workers. It also prohibits platforms from using personal data to infer sensitive information such as racial or ethnic origin, migration status, political views, religious beliefs, or union membership. In line with the EU directive, a central law in India should mandate regular assessments of the impact of algorithms on workers’ conditions, conducted jointly by platform operators, workers’ representatives, and labour experts.
The core goal of algorithmic transparency is to empower workers to collectively negotiate their rights by addressing the information imbalance between them and the platforms. The central law must include provisions to establish a clear collective bargaining process, enabling workers to effectively negotiate issues like pricing, work distribution, rating systems, and working conditions. Despite the growing strength of the gig workforce, the debate over regulation has remained stagnant, with few tangible steps taken to address workers’ concerns. With robust central legislation, the government has the opportunity to introduce nuanced regulations that will improve platform work in the country. Workers deserve access to the information that directly affects them, and legislation that guarantees this is urgently needed
