Gig Economy-Managing productivity in India’s new age economy

A Gig Economy is a market system where in many jobs are temporary, contractual and paid for based on productivity; and organizations employ independent workers for short-term assignments.

The Indian Gig economy has arrived. Today, a young kid from rural Karnataka can land up in Bangalore or Mysore and start driving a cab. He doesn’t have to know the city streets, doesn’t even need to understand the commands being issued in English in his Google-Uber app. The user friendliness of the technology allows him to earn a living. He chooses his working hours simply by switching on his app. The money gets credited to his account every week.

Incredible!

Then there is a huge mass of bike-riders making a living from delivering food and packages ordered on Amazon, Flipkart, Swiggy, Zomato etc;And there is Dunzo now, making a living out of the need for convenience of the modern, stressed out Indian household. A Dunzo partner delivers anything from dropping off a document to your lawyer, to buying a ‘Meetha Pan’ from Prince after mid-night. All this frenzy is flowing to tier-2 and tier-3 towns now.

India’s journey to the Gig Economy

Through the 1970’s and 80s, case studies in business management used examples of Japanese companies making 100 year business plans. Employees were for life. India’s business houses behaved similarly. There was a parent-child relationship between the organisation and the employee. Tata’s set up a school TAS, for incubating management talent; DCM and Hindustan Lever’s Management Trainee Programs were more sought after than many MBA degrees in India. These were top employers and employees here stuck on for life. The trade unions looked after workers’ interest against unscrupulous employers.

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We saw this changing in India in the 1990s with the advent of the Information Age. First indications of this came during the global paranoia of the Y2K armageddon. A new breed of buccaneers emerged, calling themselves Body-Shoppers. Large companies were raided and their entire IT teams were stolen, to work on resetting the clocks on US companies’ systems. They worked on short-term contracts (the deadline was clearly 23.59.59 hours of 31st Dec 1999) and were paid three times their normal salary. That’s, probably the first time when the employer-employee relationship changed fundamentally. In the next few years the IT/ITES industry has changed this relationship forever.

The IT enabled boom as the precursor to the Gig Economy

The first decade of the 21st century was as if all the stars were aligned for India. The economy was spawning a vast middle class. Y2K had shown the prowess of Indian tech professionals. Telecom liberalisation ensured India was getting connected to the world through a large submarine cable capacity and satellites on the one end and massive mobile phone penetration on the other. New technology democratised skills and knowledge. The Dotcom boom was followed by a more solid IT/ITES revolution.

The IT industry needed thousands of coders, data-entry operators and managers. Employees realised their self worth and were keen to maximise it. Employers too realised that they could hire an exact fit from a vast pool of professionals across the country. This was the brave new world and organisations now had a different challenge – talent retention.

With export led software business growth giving way to a domestic market growth, employees are now beginning to move from one gig to another. Startups and Freelancers are changing the way technology development now happens, with outsourcing becoming a convenient way for businesses to move into a productivity linked model of engagement.

Another new  phase in the development of the industry and the economy is the rapidly evolving one of delivering IT enabled services to businesses and consumers. This has emerged as an employer of a large pool of non-IT manpower, to do the last mile connect; and has opened up more channels of the Gig economy in India.

New Gig Economy but no supportive regulations

In a piece on Dunzo’s runaway success (if you can call burning $1m per month that) in Bangalore, K.Ganesh, promoter of Big Basket says, “Supply of manpower is where Dunzo’s and Big Basket’s challenge will come from. In the second half of 2018 alone, salary of delivery boys have been doubled. Three deep-pocket players are vying for the same delivery boy and driving up costs. This will increase the burn.” While there is pressure on margins of these start-ups, there is no stopping the gravy train for these new age employees. There will always be a new player with a new idea and a new investor. The technology will ensure complete fungibility of manpower resource.

Earnings will keep rising, but the relationships will be completely transactional. There was a recent news item of a Swiggy delivery rider, Sariful Sheikh, who was caught in a head-on collision. The 31-year old had just bought a bike and started work as a rider two-and-half months earlier, to supplement his income as a tailor. He’s now on a ventilator. There is no insurance, no health benefits, no one to look after them in a strange city, for these youngsters who come from small towns for the lure of incentives.

Labour laws don’t apply. They work 14-16 hours every day, drive recklessly to meet the 30 min deadline, handle cash and cranky customers to make that extra daily incentive. If they fall ill or want to take a break, there is no recourse.There are over 40,000 riders delivering packages across India’s cities. They need to have access to working conditions, health cover, insurance and defined working hours.Typically, we may say  that it is about time regulators look at these gaps and provide the necessary support.

But we should also accept that an unregulated system is a happy ground for Entrepreneurship. It is therefore important, for the sake of sustainable growth, that the businesses themselves take on the onus of developing a supportive ecosystem.

Measures to manage productivity and commitment

While the more experienced and mature, technically qualified and aware manpower will find their solutions for risks and uncertainties in their entrepreneurial pursuits, it is the last mile labour category which may face serious issues. What therefore should be the management principles in this new paradigm to ensure consistent performance?

E-commerce companies need their full complement of riders every morning to ensure all deliveries; cab aggregators want their drivers to to maximise their time on the road; IT companies need the developers if they have to execute their projects on time.

Gig workers on the other hand are slogging it out. Without a humane connect, there will be burn out and resultant angst. We have already seen Uber/Ola drivers striking work in Bangalore demanding more money.

The business leadership’s role will be very important. When margins shrink (which must eventually), how will the managers motivate the Gig workers’ to keep their productivity up? Some steps that the industry could take in self interest, are

1. Self Regulation :

First, the industry should create an organisation that works towards minimum standards of employment of these workers. All the workers must be registered with this organisation. This will ensure their interests are protected and also provide law-enforcement agencies an opportunity to check unscrupulous elements.

2.Mandatory downtime:

Field hockey teams, with the new rolling substitution rules, continuously monitor the heart rate of all players and get players off the pitch after every 6 minutes. Uber/Ola drivers should be monitored for the number of kilometres they have driven (say every 6 hours or 60 Km) and then given a mandatory 2 hour rest. A similar norm for delivery boys and other such workers could be defined.

3.Mandatory leave:

A two-week off every year could be a mandatory norm. The regulatory organisation could enforce it across businesses employing the worker.

4.Face time with HR team:

Monthly face to face meetings with the HR team to listen to problems being faced by the workers will be very useful.

5.Self regulated savings and insurance :

Some steps that could help in improving the financial well being of this outsourced teams

• Provident Fund contribution from the company as well as riders/drivers could be planned. This could be a part of the fare cost/customer charges and should be automatically deposited into the PF account. The PF account must necessarily be portable from one company to another.
• Health, Accident and Life Insurance could be mandatory.
• Periodic health, psychological checks could be mandated.
• Education programs to increase qualification and a career path to either logistics management, back office operations or warehouse operations. (All the qualifications should be universally accepted)
• Savings and investment advice for riders/drivers

These steps will bring a measure of support to this fast emerging category of workers. We must ensure that the essential nature of their Gig-to-gig contract should be maintained, even while we put a structure in place to protect their interests.

This could then even become the template to untangle the tough maze of India’s labour laws and allow other industries to bloom as well.

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