Introduction
In the crowded lanes of urban India, millions of young men and women weave through traffic on scooters and motorcycles, delivering food, groceries, or ferrying passengers at all hours. Amit, a 27-year-old from a small town in Bihar now working in Delhi’s outskirts. He starts his day before dawn with a quick-commerce app, chasing incentives to make ends meet for his family back home.
“The app lets me work when I want,” he shares, “but one accident, a low rating, or a sudden drop in orders, and everything falls apart.” Stories like Amit’s echo across cities from Bengaluru’s tech corridors to Mumbai’s bustling streets. They represent the human face of India’s booming gig economy “flexible work that powers modern convenience but often leaves workers exposed to uncertainty, risk, and isolation.”
Gig Economy Growth in India
India’s gig sector has grown dramatically. The Economic Survey 2025-26 notes that the number of gig workers rose 55% from 7.7 million in FY21 to 12 million in FY25. They now form over 2% of the total workforce. Projections suggest non-agricultural gig work could reach 6.7% of the workforce by 2029-30, contributing around ₹2.35 lakh crore to GDP. Platforms such as Swiggy, Zomato, Blinkit, Zepto, Uber, and Urban Company have reshaped urban services, turning smartphones and UPI payments into engines of opportunity. Yet this growth has come with a stark reality: many workers operate in a legal grey zone, lacking the protections that traditional employees take for granted.
Key Statistics on Gig Workers
| Metric | Data |
|---|---|
| Gig Workers in FY21 | 7.7 Million |
| Gig Workers in FY25 | 12 Million |
| Growth Rate | 55% |
| Workforce Share | Over 2% |
| Projected Workforce Share by 2029-30 | 6.7% |
| GDP Contribution | ₹2.35 Lakh Crore |
Understanding Gig Workers
Gig workers engage in short-term, task-based assignments, usually arranged through digital platforms. They include delivery riders, ride-hailing drivers, freelance professionals offering home services, and others who earn per job rather than a fixed salary. The Code on Social Security, 2020, formally defines “gig workers” as those outside the traditional employer-employee relationship and “platform workers” as those accessing work via online apps.
This classification marks a shift from older laws that focused mainly on organized sector jobs in factories or offices. Gig workers are often called “partners” or “independent contractors.” The term suggests autonomy, but in practice, algorithms control task allocation, ratings, and earnings. Workers enjoy flexible hours, It is an advantage for students, migrants, or those supplementing income but they also bear the full brunt of economic ups and downs, vehicle maintenance costs, fuel expenses, and health risks.
Key Features of Gig Work
- Short-term, task-based employment
- Work allocated via digital platforms
- No fixed salary (earn per job)
- Flexible working hours
- Algorithm-driven ratings and incentives
- High exposure to financial and health risks
The Instant Delivery Boom and Its Pressures
Technological advancement, affordable data, widespread smartphone use and seamless digital payments have fueled the “instant delivery” model. Companies compete fiercely on speed, sometimes promising deliveries within 10 minutes. Consumers appreciate the convenience of groceries or meals arriving almost instantly but this hyper-efficiency places enormous strain on riders.
Incentives tied to speed and volume push workers to take risks on congested roads. Long hours in harsh weather, skipping breaks, and navigating poor infrastructure become routine. A survey of platform workers across 10 cities revealed that nearly 25% work over 70 hours a week, 62% face near-miss accidents, and 27% have been in actual crashes. The pressure peaked in late 2025 when nationwide strikes by delivery workers highlighted unsafe conditions and declining real earnings. In response, the government urged platforms to ease rigid timelines, and several quick-commerce firms scaled back aggressive 10-minute promises in early 2026. While welcome, these changes underscore a deeper imbalance: platforms gain from efficiency and scale, while workers absorb the physical and mental costs.
Challenges Faced by Gig Workers
- Long working hours (often exceeding 70 hours/week)
- High accident and safety risks
- Unstable and fluctuating income
- Lack of social security and legal protection
- Pressure from ratings and algorithm-based systems
- Physical and mental stress due to work conditions
Core Challenges: Income Volatility And Beyond
Financial Insecurity
Financial insecurity tops the list of difficulties. Earnings depend on demand, weather, festivals, algorithm changes, and customer ratings. The Economic Survey highlights that around 40% of gig workers earn less than ₹15,000 per month. Platforms can alter commission rates or incentives without notice, making budgeting nearly impossible. Unlike salaried roles, there is no guaranteed minimum wage, overtime compensation, or paid leave.
Safety Concerns
Safety concerns compound the issue. Riders often lack employer-provided insurance or protective equipment. Accidents, injuries, heat exhaustion, and exposure to polluted air in major cities take a toll. During the COVID-19 pandemic, many continued essential deliveries without adequate safeguards or extra support, revealing how quickly gig income can vanish in crises.
Dignity And Voice Remain Limited
- Arbitrary account deactivations can end a worker’s livelihood overnight with little recourse.
- Grievance mechanisms are frequently platform-managed and opaque.
- Customers or authorities sometimes treat riders with suspicion or disrespect.
Despite powering a vital part of the urban economy, many feel marginalized but are essential yet undervalued.
Additional Vulnerabilities
- Absence of health coverage
- No pension contributions
- Lack of maternity benefits
- Occupational hazards borne individually
Long-term financial security feels distant for most.
What Needs To Change: A Roadmap For Reform
Fixing this requires actions from all sides like government, platforms, and workers.
Stronger Policy Backbone
Universal registration is the starting point. The E-SHRAM portal, with its aggregator module launched in December 2024, is building a national database. Union Budget 2025 promised identity cards, mandatory registration pushes, and health cover under Ayushman Bharat (PM-JAY) for up to one crore gig workers. Platforms should be required to enroll workers automatically. Minimum per-task earnings, transparent algorithms, and portable benefits (that move with the worker) would bring stability.
Platform Responsibility
Companies must contribute meaningfully. The Code on Social Security, 2020, already envisions aggregators paying 1-2% of turnover (capped at 5% of payouts to workers) into a Social Security Fund.
| Contribution Aspect | Details |
|---|---|
| Aggregator Contribution | 1–2% of turnover |
| Cap Limit | 5% of payouts to workers |
| Fund Usage | Insurance, health schemes, old-age support |
This fund can finance accident insurance, health schemes, and old-age support. Transparent grievance redressal, safety training, and fair deactivation policies are non-negotiable. Some platforms have begun offering voluntary insurance, but mandatory, uniform standards are needed.
Legal Clarity And Worker Voice
- Recognition of gig workers as a distinct category
- Tripartite model (government, platforms, workers)
- Encouragement of collective bargaining
Rajasthan’s 2023 Platform-Based Gig Workers Act was pioneering. Karnataka’s 2025 law goes further, creating a dedicated welfare board, fund, and even the right to refuse tasks. Other states like Telangana and Jharkhand are following. These experiments offer practical lessons for the Centre.
Learning From The World
California’s AB5 law and the EU’s platform work directive push for reclassification where control is high. India doesn’t need to copy them wholesale but the principle of protecting workers without stifling innovation also applies here.
The Code On Social Security, 2020: A Milestone With Room For Improvement
Passed as part of the four Labour Codes, the Code on Social Security, 2020, consolidated nine earlier laws into a unified framework. It became effective nationwide from November 21, 2025. For the first time, it explicitly recognizes gig and platform workers and authorizes schemes covering key risks. A Social Security Fund, supported by contributions from government, employers/aggregators, and potentially workers, aims to sustain these benefits.
Draft rules released in December 2025 are under consultation, with provisions for unique identities and eligibility thresholds (such as minimum days worked on a platform). The four Labour Codes overall seek to modernize regulation while extending coverage to non-traditional work arrangements.
Challenges And Gaps
- Many provisions are enabling rather than immediately enforceable
- Dependence on detailed schemes and state-level implementation
- Funding mechanisms need strengthening
- Compliance monitoring gaps
However challenges persists, Many provisions are enabling rather than immediately enforceable, depending on detailed schemes and state-level implementation. Funding mechanisms and compliance monitoring need strengthening to move from intent to impact.
Renowned leader Raghav Chadha has welcomed aspects of the draft rules as a “small but important win” for legal recognition and protection, while continuing to stress the need for concrete, guaranteed benefits rather than reliance on future executive actions. His parliamentary interventions have highlighted gaps in accountability and the risk that symbolic recognition may not translate into tangible security on the ground.
Contrasting Old And New Frameworks
Traditional labour laws primarily targeted the organized sector, leaving informal and gig workers largely outside their scope. There was no specific definition or targeted welfare for platform-based work. The new Code adopts a more inclusive, flexible approach suited to digital realities. It promotes portability of benefits through tools like Aadhaar-linked Universal Account Numbers and broadens the definition of who qualifies for support.
Yet the shift is not complete. The framework still leans heavily on scheme-based delivery rather than automatic, enforceable rights. Administrative coordination between central and state agencies remains crucial for effective rollout. Critics argue that without robust enforcement, the Code risks becoming another well-intentioned but under-delivered reform.
Key Differences: Old Vs New Framework
| Aspect | Traditional Labour Laws | New Labour Code Approach |
|---|---|---|
| Coverage | Focused on organized sector | Includes gig and informal workers |
| Worker Definition | No specific recognition of gig workers | Broader and more inclusive definitions |
| Benefits | Limited and non-portable | Portable benefits via Aadhaar-linked systems |
| Implementation | Rights-based enforcement | Scheme-based delivery |
Judicial And Global Perspectives
Courts worldwide are increasingly examining the real nature of platform-workers relationships and starting focusing on control exercised through algorithms, economic dependence, and supervision. In some jurisdictions, rulings have reclassified workers as employees where dependency is high, extending full labour protections.
India’s Supreme Court has not yet delivered a definitive verdict on gig worker status, but lower courts and tribunals are seeing more cases. Future judgments could interpret the Code expansively, considering the practical realities of algorithmic management. This evolving jurisprudence may push platforms toward greater responsibility while preserving innovation.
Global Legal Developments
- California’s AB5 law established a strict test for classifying workers as independent contractors.
- The European Union’s Platform Work Directive (effective 2024, with member states implementing by 2026) introduces a rebuttable presumption of employment status.
- Transparency rules for algorithms and protections against unfair treatment are gaining importance globally.
Internationally, lessons abound. California’s AB5 law established a strict test for classifying workers as independent contractors. The European Union’s Platform Work Directive (effective 2024, with member states implementing by 2026) introduces a rebuttable presumption of employment status based on control criteria, alongside transparency rules for algorithms and protections against unfair treatment. India need not adopt these models verbatim, but they illustrate ways to balance worker safeguards with the flexibility and growth potential of platform economies.
Towards An Equitable Digital Future
The gig economy offers genuine opportunities in a young, urbanizing India. It provides entry-level work, supplementary income, and entrepreneurial avenues for millions. Yet unchecked precariousness threatens long-term sustainability. Workers powering convenience for millions deserve dignity, safety, and basic security in return.
Recent Developments And Progress
- Labour Codes’ rollout
- Budget 2025 announcements on registration and health cover
- E-SHRAM integration
- Pioneering state laws
- Increased public discourse and worker strikes
Recent developments show momentum: the Labour Codes’ rollout, Budget 2025 announcements on registration and health cover, E-SHRAM integration, and pioneering state laws. Strikes and public discourse have also spotlighted worker concerns, prompting dialogue and some policy adjustments.
Key Reforms Needed
- Full implementation of welfare schemes
- Strict yet practical compliance by platforms
- Widespread worker registration drives
- Transparent algorithmic management
- Portable benefits across platforms
- Regular tripartite consultations
- Minimum per-task or per-hour earnings
- Compensation for waiting time
- Occupational safety standards
True progress requires sustained action—full implementation of schemes, strict yet practical compliance by platforms, widespread registration drives, transparent algorithms, portable benefits, and regular tripartite consultations. Minimum per-task or per-hour earnings, compensation for waiting time, and occupational safety standards could address immediate pains without stifling the sector.
Conclusion
Flexibility in work should enrich lives, not undermine them. As India embraces its digital transformation, ensuring gig workers share equitably in the gains is both a moral imperative and sound economics. Platforms that profit, the state that regulates, and the public that benefits all share responsibility. By bridging the legal and welfare gap thoughtfully, India can build a gig economy that is innovative, inclusive, and humane—one where workers like Amit are not just surviving the ride, but thriving with security and respect.
Written By:
- Vansh Tanwar, 4th Year Law Student MAIMS, GGSIPU Delhi. &
- Era Bharadwaj, 4th Year Law Student MAIMS, GGSIPU Delhi.
