#19: Why 77% of India’s Gig Workers Still Have No Social Security?
Surveys show 85% of platform gig workers put in over 8 hours a day, and nearly one-third of app-based drivers work over 14 hours daily.
India’s gig economy is surging, but its workers face a stark reality: an overwhelming majority remain completely unprotected.
App-based platforms like Swiggy, Zomato, Ola, Uber, and Urban Company now engage millions of Indians in delivering food, ferrying passengers, or providing home services.
NITI Aayog released a report in 2020-21, as per which, about 77 lakh people were part of this gig workforce in 2020-21, and it’s projected to swell to 2.35 crore by 2029-30.
By then, gig workers could form around 7% of India’s non-farm workforce.
This isn’t a niche sector - it’s becoming a pillar of our economy.
Yet, over three-fourths of these platform workers are outside any formal social-security net, with no access to schemes like Employees’ State Insurance or provident fund - essentially no safety net at all.
The people driving our cabs and delivering our groceries remain, for the most part, invisible to India’s welfare system.
This gap in protection is not just a statistical quirk; it has life and death implications.
Gig work was sold on promises of flexibility and quick money, but the ground reality is grimmer.
When app-based gigs took off a decade ago, being classified as “independent contractors” - not employees - was marketed as a win-win: drivers and couriers supposedly had autonomy and high earning potential.
That illusion quickly evaporated.
Companies, in pursuit of profit, slashed payouts, and an oversupply of workers drove incomes down.
Many gig workers now grind through punishing hours just to make ends meet.
Surveys (links at bottom) show 85% of platform gig workers put in over 8 hours a day, and nearly one-third of app-based drivers work over 14 hours daily.
There is nothing “part-time” or leisurely about these jobs - for most, this is full-time toil.
Yet, unlike a formal job, there’s no overtime pay or paid leave.
In fact, more than 43% of gig workers manage to earn less than ₹500 a day (roughly ₹15k a month) even after those long hours.
That is barely a living wage in any big city in India.
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And remember, gig workers have to cover their own costs - fuel, vehicle maintenance, even accident insurance in many cases.
After accounting for work expenses, take-home earnings shrink further.
A recent study found that only a handful of platforms (notably BigBasket and Urban Company) ensure workers make at least the local minimum wage after costs.
Most others effectively pay below minimum wage once you factor in the petrol, bike repairs, or smartphone data plans that workers pay out of pocket.
Labour conditions on these platforms are often outright exploitative.
There is no consistency or security of income - one week might bring decent earnings, the next could be devastatingly lean if the algorithm decides so.
The work itself can be hazardous: speeding through traffic to hit delivery timers or driving exhausted late into the night just to hit daily targets.
Accidents are common, yet if a gig worker is injured on the job, they’re usually on their own.
No ESIC health coverage, no sick pay.
Nearly all gig workers in one survey reported health problems or stress due to their working conditions.
It’s easy to see why.
A food delivery rider who breaks a limb in an accident could lose months of income with no compensation or medical cover, pushing his family to the brink.
There is at best a patchwork of voluntary insurance some companies offer, but nothing like the guaranteed protections formal employees get.
One researcher aptly described gig workers’ status as ambiguous - they get neither the informal sector benefits some traditional unorganised workers do nor the rights of formal employees.
In other words, they are in a legal limbo - the worst of both worlds.
Platforms euphemistically call them “partners” or “delivery entrepreneurs,” but in practice these workers have almost no say in working conditions.
Algorithms have effectively become the new bosses in this economy, and they are unforgiving.
Workers are assigned rides or orders by opaque software; digital piece-rates can be cut without warning; and if the app’s algorithm flags a worker, they can be “deactivated” - effectively fired - with little recourse.
There’s no human HR department for a wrongfully penalised driver to plead their case; often, no grievance redressal mechanism at all beyond a faceless chatbot.
The Hindu editorial on Karnataka’s gig worker law noted how lacking formal employee status leaves gig workers “at the mercy of the aggregator and all-powerful algorithms,” with no safety nets or regulation.
This all-powerful algorithm can dictate their income and even their livelihood, and they have no bargaining power against it.
Unsurprisingly, a climate of fear prevails - many gig workers worry that any day they could be arbitrarily “blocked” from the app and lose their income source.
Such algorithmic management - automated and opaque - means workers are often punished or pushed to their limits by software settings, with no transparency.
It’s a 21st-century sweatshop, run not by a foreman with a stopwatch, but by an app on your phone.
Faced with these conditions, gig workers find themselves without the traditional shields of labour protection or social security.
Unlike formal sector employees, they have no guaranteed health insurance, no provident fund or pension, no regulated hours, no paid leave, and no established channel for grievances.
In India, most social security benefits are tied to formal employment - for example, employers and employees each contribute to provident fund for retirement or to state insurance for healthcare.
Gig workers get none of these contributions since legally they are not “employees” of the platforms that dispatch their work.
The result is a huge social-security gap.
A gig driver or delivery person might work as hard as any formal worker, yet if they fall sick or grow old, they have nothing to fall back on.
It is telling that an estimated 77% of platform workers have no access to any formal social security scheme - essentially, nearly four out of five gig workers are on their own if things go wrong.
This leaves them extremely vulnerable to economic shocks and personal crises.
As one analysis observed, this exclusion from institutional social security makes gig workers prone to “economic instability and health risks.”
During the COVID-19 pandemic, for instance, many gig workers continued to deliver essential goods at personal risk, but if they caught the virus, most had no sick pay or health cover - some had to rely on sporadic company charity or mutual aid.
It’s an unacceptable trade-off: the convenience and low costs we enjoy from these platforms are essentially subsidised by the lack of basic protections for the workers.
Recognising this glaring problem, India’s policymakers have begun to stir - but progress has been halting and inadequate.
The Code on Social Security, 2020 was a landmark in principle: it was the first national law to formally acknowledge “gig workers” and “platform workers” as categories and envisaged social-security schemes for them.
The Code outlined that gig and platform workers could be covered for life and disability insurance, accident insurance, health and maternity benefits, old age protection, etc., funded through a combination of state and platform contributions.
On paper, this was a big step forward, suggesting that India didn’t intend to let this new workforce slip through the cracks.
But nearly five years later, those provisions exist only on paper.
The 2020 Code - along with three other labour codes - has not been brought into force; the central government has not notified the sections that would actually extend these benefits.
As a result, gig workers still cannot avail any of these promised schemes.
The law that could help them is stuck in limbo.
The delay in implementing the Code means a notional victory but a real defeat: workers remain as unprotected today as they were before.
In short, the government recognised gig workers’ plight in theory, yet hasn’t delivered any actual relief.
While the labour codes languish, the government has tried some stop-gap measures.
The biggest has been the creation of the e-Shram portal in 2021 - a national database for unorganised workers (which includes gig and platform workers).
The idea was to register every informal worker and issue them an e-Shram ID card, to eventually link them to social security schemes.
To date, this drive has registered over 28.9 crore unorganised workers on the portal - a testament to the sheer size of India’s informal sector.
Gig workers are among those registering, self-declaring their occupation and details.
This has certainly been a positive step in making these workers visible - an app-based driver or food courier with an e-Shram card is now counted in government data, which is better than being completely off the radar.
However, registration alone doesn’t pay hospital bills or pensions.
The e-Shram initiative has yet to translate into substantive benefits.
It’s like being listed in a phone directory - useful, perhaps, but not much comfort if you fall off your bike and break an arm.
For a long time, gig workers have essentially gotten an ID card and little else.
Only very recently have we seen hints of concrete support.
In the Union Budget 2025, the government finally announced a plan to extend certain social security benefits to platform gig workers.
It promised to formally recognise at least 1 crore gig workers and provide them with identity cards, registration on e-Shram (for those not already on it), and - notably - health insurance coverage under the government’s flagship scheme PM Jan Arogya Yojana (PM-JAY).
Providing access to PM-JAY (which offers ₹5 lakh of annual hospital insurance cover for poor families) to gig workers could be a lifeline for those eligible.
The Labour Minister hailed this as a “transformative step” for gig workers’ welfare.
Indeed, after years of talk, it is a tangible measure: giving gig workers a health safety net financed by the state.
This move acknowledges that gig workers, like other citizens, deserve healthcare security.
It’s a welcome step, no doubt - but it’s just one step.
For one, the target is 1 crore gig workers, while the total gig workforce is already around that number and growing fast.
Will the rest get covered later, or are we leaving millions still uninsured?
Secondly, health insurance alone is not a complete social security net.
What about old-age pension or provident fund, what about disability benefits if a driver is permanently injured, what about basic income security during lean times?
On those fronts, the budget was silent.
So while we applaud the government for addressing healthcare for gig workers, we must also call out that it’s far from sufficient.
It feels more like a pilot project than a full-fledged welfare net.
Meanwhile, the central government says it is working on a broader social security scheme for gig workers, likely to be rolled out even before the full labour codes.
Reports indicate an imminent plan where platform aggregators will be required to contribute a small fraction of their revenue into a dedicated fund.
The government may match a part of this contribution, and the fund would finance benefits like health insurance, accident insurance, pensions, unemployment and maternity benefits, possibly through existing structures like the Employees’ State Insurance Corporation.
Essentially, this would operationalise the ideas in the 2020 Code: a platform-worker welfare fund.
Officials have hinted that such a scheme is in advanced discussions.
There is even a political urgency - as one news report noted, with general elections approaching, the government is eager to announce relief measures for gig workers, especially after seeing states like Rajasthan take the lead.
The Rashtriya Swayamsevak Sangh (the ideological ally of the ruling party) has also voiced concern that gig workers face exploitation and need protection, which likely adds pressure on the government to act.
All this has led to an expectation that national-level welfare measures for gig workers will roll out soon.
If and when that happens, it could be a game-changer - finally mandating that platforms put money into social security and establishing a basic safety net for gig workers across India.
However, waiting for the central government’s scheme hasn’t stopped individual states from taking bold initiatives.
In fact, some of the most significant moves to protect gig workers have come at the state level, creating a patchwork of experiments that deserve both praise and scrutiny.
The trailblazer was Rajasthan, which in 2023 became the first state to pass a law for gig workers’ welfare.
The Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023 set up a dedicated welfare board for gig workers and a fund to finance benefits.
The fund was to be financed by a surcharge - essentially, a small cut on each transaction or ride - charged to the platforms operating in the state.
This law was a landmark: it acknowledged app-based workers as a category that needs support and tried to institutionalise that support.
Provisions included registration of all gig workers in the state, measures for social security, and perhaps grievance redressal mechanisms.
It gave hope that gig workers don’t have to wait endlessly for Delhi to act - states can start somewhere.
But the Rajasthan story also highlights the challenges.
That law was passed by one government, and a few months later, a new government came to power and effectively put the law in cold storage.
The welfare board has not been set up, and the rules to implement the Act have stalled.
This whiplash shows how gig workers’ welfare can become a political football.
It’s a stark reminder that without sustained political will, even well-intentioned laws can wither on the vine.
Karnataka offered another case study.
Home to tech hubs and gig economy giants, Karnataka in 2024 drafted its own Platform-Based Gig Workers (Social Security and Welfare) Bill.
This bill was, if anything, even more ambitious than Rajasthan’s law.
It not only proposed a welfare board and worker registration, but also sought to prevent arbitrary dismissals and to bring transparency to algorithmic pay and work allocation.
It talked about human grievance redressal forums, attempting to rein in the opaque “black box” algorithms.
Gig worker unions and labour advocates welcomed the bill as it promised to address many ground-level issues beyond just monetary benefits.
Industry lobby groups, however, were not pleased.
As the bill was about to be tabled, platform companies and industry bodies cried foul, calling it a “duplication” of central law.
They essentially lobbied to pause the bill, arguing that Karnataka should wait for the central scheme rather than make its own rules.
But in May 2025, the Karnataka government decided it couldn’t wait any longer and promulgated an ordinance to enact the gig worker welfare law itself.
The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Ordinance, 2025 essentially put into effect the protections that the bill had envisioned.
It set up a framework requiring platforms to contribute to a state welfare fund and established a board to oversee gig workers’ welfare in the state.
Other states are moving in the same direction: Telangana and Jharkhand have drafted similar laws to protect gig workers, though those are still in the pipeline.
We’re witnessing a ferment at the state level, a recognition that gig workers can’t be left high and dry.
The positive side is that innovative policies are being tried, and gig workers’ issues are now on legislative agendas.
The downside is that a piecemeal state-by-state approach could lead to uneven protections - and companies might exploit loopholes or play states against each other.
Ultimately, a driver in Delhi and a driver in Bangalore deserve the same baseline protections; that will require a nationwide framework, or at least coordination.
Amid these policy moves, gig workers themselves are not sitting idle.
They have been organising and knocking on the doors of the judiciary for justice.
In 2021, a coalition of gig workers led by the Indian Federation of App-Based Transport Workers filed a public interest petition in the Supreme Court.
Their plea is straightforward: recognise gig workers as “workers” under law and give them social security rights.
Specifically, they argue they should fall under the purview of the existing Unorganised Workers’ Social Security Act, 2008, or that new provisions be actively implemented.
The petition goes further to claim that the government’s failure to provide social security to these workers is a violation of fundamental rights - the right to equality and the right to a life of dignity under the Constitution.
After all, if two people are doing similar work, why should one have social protection and the other none?
The petitioners highlight that denying gig workers basic security while benefiting from their labour is tantamount, in their view, to exploitation and even forced labour.
This case has slowly progressed and put the spotlight on the government.
The Supreme Court has not issued a final ruling yet, but in hearings it has shown notable concern for gig workers’ plight.
By early 2025, the Court told the government to “pull up your socks” regarding implementing the Social Security Code’s pending provisions.
The judiciary’s impatience sends a clear message: justice delayed is justice denied for gig workers.
The government’s response so far has been disappointingly defensive.
In a filing to the Court, the Union government claimed that gig workers’ fundamental rights were not violated by the current framework.
It pointed to the e-Shram portal as evidence of steps taken for gig worker welfare, and noted that the Social Security Code has provisions - albeit dormant - for them.
Telling a gig driver who has no health cover or accident insurance that his rights aren’t violated because a database exists is tone-deaf.
The government is clearly trying to avoid a court mandate that could force immediate, concrete action or potentially even a reclassification of gig workers as employees.
From the workers’ side, the litigation itself is an act of desperation and activism.
They’re using the courts to achieve what collective bargaining or legislation hasn’t yet.
It has already scored a moral victory by drawing public attention.
Now, with the case ongoing, there’s pressure on the government to show real progress - perhaps one reason why the 2025 Budget and recent policy plans have something to show.
All these developments have exposed a tension between different stakeholders - platform companies, workers (and their nascent unions), and policymakers - each with their own perspective on the gig economy’s future.
From the industry’s viewpoint, any move to increase labour protections is often seen through the lens of cost and flexibility.
The platforms argue that the flexibility of gig work is its defining feature.
They point out, not incorrectly, that a section of gig workers are students or others looking for supplementary income, who value the ability to log in and out at will.
Imposing a formal employment model could, in their narrative, destroy this flexibility and the jobs themselves.
Some industry-aligned commentators even suggest that participation in social security schemes should be voluntary for gig workers, given the heterogeneity of their commitment.
The subtext is that too much regulation will make platforms less agile and possibly force them to cut jobs or raise prices.
Industry players also tend to prefer a single nationwide policy, to avoid a patchwork of state rules, and they want clarity and limits on their obligations.
But let’s be frank: platforms are lobbying hard to ensure any social security scheme remains modest.
between profit and welfare.
The pushback against state laws in Karnataka, the attempts to stall legislation by calling it duplicative, all indicate that companies are nervous about anything that substantially raises their costs or grants workers stronger rights.
They have a vested interest in maintaining the status quo of classifying workers as independent contractors.
It’s no surprise that even globally, gig economy firms fight legal attempts to recognise drivers or couriers as employees.
In India, companies have largely operated without having to publicly justify their labour practices until recently.
Now that the conversation has shifted, they tread a fine line: accepting the idea of social security in principle, but lobbying to shape it on their terms.
The rhetoric of “choice and flexibility” is part of that strategy.
On the other side, workers’ groups and unions dismiss the flexibility argument as a red herring.
For them, what’s at stake is fair treatment and basic security.
Yes, flexibility is good, they say, but what’s the use of flexibility if it comes with poverty wages and zero benefits?
A key point unions make is that gig work today is full-time work for a huge number of people - it’s not just a side gig.
These workers don’t feel “empowered” by being outside labour laws; they feel cheated.
Unions thus call for employee status or at least equal social security.
They argue that a delivery person working 12 hours a day is no different from a contract worker in a factory, so why shouldn’t they get provident fund, ESI, or the protection of a minimum wage?
In the Supreme Court petition, gig workers explicitly argue that excluding them from social security while others enjoy it is a violation of equal rights.
That captures the essence of the workers’ stance.
They are doing real, hard work - society even calls them “essential workers” now - so they deserve real worker rights.
From their vantage, platforms have been allowed to profit from labour without the responsibilities that every other employer in a formal business has.
It’s a structural injustice they want corrected.
Many gig workers also voice that the so-called freedom of the gig economy is illusory when you’re struggling to make rent.
They would gladly trade some flexibility for a stable income and benefits.
Another aspect workers emphasise is dignity and voice.
Currently, gig workers have almost no say in algorithmic policies or terms of service which can change overnight.
Unions and worker collectives are pushing for representation - whether through works councils, or representation on the welfare boards being set up by laws.
They want an end to one-sided conditions set by apps.
The nascent strikes and protests by gig workers all signal that they are no longer content to be treated as disposable gig cogs.
They are demanding to be heard.
Policy experts and think tanks have added a more neutral analytical voice, often underscoring that without intervention the gig economy’s promise could turn into a trap.
Even bodies like NITI Aayog, which generally celebrate the gig economy’s growth, have acknowledged the necessity of social security for sustainability.
Many economists point out that a workforce without safety nets is more likely to be inefficient and a drain in the long run.
There is also the argument about a level playing field - if traditional businesses bear labour compliance costs but platform businesses don’t, it might encourage a race to the bottom in work standards.
Forward-looking experts thus advocate finding a middle path: preserve the flexibility that genuinely benefits some workers and the innovation of the platform model, but build in baseline protections so that gig work is not exploitation.
Some suggest tailoring social security schemes specifically for gig workers, benchmarking them to what formal workers get.
Others point to India’s own experiments with welfare boards for informal sectors.
What’s heartening is that unlike a few years ago, no one denies the problem now - not even the platforms publicly deny that gig workers need social security; the debate is on the modalities.
Given this backdrop, one might ask: what is the way forward to truly address India’s gig-worker gap?
The answer requires both bold policy action and vigilant implementation.
First, the government must quit the delays and implement the laws it has already passed.
The Social Security Code of 2020 needs to be brought into force - every year of wait is another year that millions of workers remain in limbo.
Second, any national scheme that is rolled out must be truly comprehensive.
Healthcare insurance is a vital component, but gig workers also need protection against income loss.
A pension or provident fund system for gig workers is essential.
Third, grievance redressal and regulation of working conditions have to complement monetary benefits.
Social security alone doesn’t stop a company from exploiting workers through unrealistic algorithmic demands.
There must be guidelines on fair work practices for platforms.
Fourth, India could consider establishing sectoral boards or unions to give gig workers collective voice.
One promising idea is to have a Gig Workers’ Welfare Board at the national level, with representation from workers, platform companies, and government.
This board could oversee the social security fund, adjudicate disputes, and set evolving standards.
Finally, public pressure and consumer awareness have a role.
When we as consumers understand that our quick cab ride or instant delivery is coming at the cost of worker welfare, we can push for change too.
In crafting solutions, we must also resist half-measures disguised as help.
There is a worry that companies might push for voluntary schemes or one-off covers to stave off deeper reforms.
But voluntary schemes often lead to low uptake - the very workers who need social security most are often least able to sign up.
So it’s imperative that any framework automatically covers all gig workers by default.
A worker’s protections should not depend on the benevolence of a particular company’s policy which can change tomorrow.
It must be grounded in law.
In summary, India’s gig economy sits at a crossroads.
One road leads to digital feudalism - millions of workers powering new-age services while remaining precarious and voiceless. The other road leads to a more equitable digital economy, where innovation and worker welfare grow in tandem.
The current efforts indicate that we are at least recognising the problem, but recognition is not enough; we need resolve.
As it stands today, too many gig workers wake up every morning knowing that if they crash their bike, tomorrow their family may have no food on the table.
This precariousness is unacceptable in a nation that aspires to be a $5 trillion economy and a Vishwaguru. Our economic growth cannot be built on the backs of exploited, unprotected labour - that model is neither morally nor economically sustainable.
It’s time for strong, enforceable action.
The government must expedite the rollout of the promised social security schemes with clear timelines and accountability.
The state initiatives should be supported, not stymied, and perhaps scaled up into a unified national framework.
Platforms must be made to contribute their fair share - and if their current model truly can’t function while giving workers basic protections, then perhaps that model doesn’t deserve to continue.
Unions and civil society organisations should continue to exert pressure.
As customers, we should also be willing to accept that fairness might mean paying a slightly higher price for services.
A gig economy built on rock-bottom prices and worker misery is not a legacy we should be comfortable with.
As things stand, 77% of India’s platform workers remain outside formal social security - that is a huge swathe of the workforce left to fend for themselves.
This is not an inevitability; it’s a policy choice that can and must be changed.
The government’s recent moves are a start, but they must go further.
We need to close this gaping protection gap with urgency.
Anything less is too little, too late for the millions who drive our progress every day on two-wheelers and cars, with apps in hand but no safety net beneath them.
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Best,
Jayant Mundhra
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