Gig-worker platforms must learn from Urban Company

By: |
October 20, 2021 4:45 AM

Even as the govt does its bit to give gig-workers social security, platforms must ensure fair compensation and key protections

gig economy

For some time now, gig-economy workers have been complaining about unfair practices. It was in the fitness of things that employers should address their concerns but most companies have brushed aside the demands. One large player claimed its business model would collapse if workers’ demands were to be met. However, in a commendable initiative, Urban Company (UC) has stepped up to the plate to address complaints by its female beauty services partners (BSPs). These include unfair penalties, account blocking, allegedly high product pricing and commissions. If one cross-checks UC’s 12-point memo vis-à-vis the 13 demands raised relating to commissions, penalties, ratings, worker safety, and basic social security, the majority have been addressed.

The company has cut commissions charged from the top tier of beauty services from 30% to 25% and allowed partners one ‘no-penalty, no-show’ and two ‘no-penalty’ cancellations made 12 hours in advance per month. Moreover, it has extended free vaccination support till December 31. The ratings system has been changed as have the repercussions. UC has also said the cancellation fee, charged from the customer, would be transferred fully to the service partner. While the company’s practices were clearly not top-of-the-line, it is nonetheless creditable the management has come forward to meet the demands of the workers.

How vulnerable gig-economy workers are, has been highlighted by Tilman Ehrbeck of Flourish Ventures. Indian gig workers, Ehrbeck found, were hit the hardest by the pandemic; 90% of them were earning less than Rs 15,000 a month as of August 2020. While a good number—83%—were able to draw on their savings and 42% received government aid in some form, 47% of these workers were still not able to meet their expenses without borrowing.

The Indian gig-economy model is fairly new and as part of the e-commerce industry, it has been around in India for just about 13 years. As TN Hari, the HR head of BigBasket, points out, the model has actually done quite well for Indian workers as it has ‘industrialised’ already-existing services, including those of beauty parlours and plumbers. However, as he also notes, with the unprecedented growth of the industry, there are more responsibilities placed on its shoulders, which can result in rushed and unrealistic regulations.

Nevertheless, as a model which employed 15 million workers as of August 2021 and generated 56% of new jobs, it requires attention to ensure fair treatment of workers. The major problem arises when the status of such workers is questioned, as they are not on the companies’ payrolls, but they are not considered unorganised workers either. As per a PIL filed by the Indian Federation of App-based Transport Workers (IFAT) in September, gig workers should be considered as unorganised workers so that they can enjoy the protection provided under the Unorganised Workers’ Social Security Act (UWSS). The government is working to help these workers; in her FY21 Budget Speech, finance minister Nirmala Sitharaman announced extension of social security benefits to these workers; however, changes to the Code on Social Security 2020 are yet to be implemented, though 15 states have prepared the draft rules. Platform and gig workers can register on the e-Shram portal.

The government is also considering bringing gig and platform workers under the ambit of ESIC—Employee State Insurance Corporation. Even as the government does its bit, employers too must share a larger share of their profits with their employees and compensate them adequately for the long working hours and the harassment they sometimes face. They must take a leaf out of UC’s book.

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