Law and the Gig Economy in India
Over the past decade, the gig economy has transformed the way we work. Whether it’s a Swiggy rider delivering food in Delhi, or an Uber driver navigating Bangalore traffic, these workers are part of a massive shift in labor markets. But a major problem is that India’s laws haven’t caught up with it.
In this article we try to look at the issues involved related to the gig economy and try to answer the question: how should the law regulate gig work?
Why gig work is not covered by existing laws
Traditionally, labor laws assumed there are only two types of workers: employees and independent contractors. Gig work, however, sits somewhere in between. These workers are managed by algorithms, paid per task, and often lack job security, insurance, or social benefits. Often, people do not know how these algorithms work, how they distribute the task of delivering an order from restaurant A to a customer in address B to the right delivery boy C.
Platforms like Swiggy or Uber typically classify gig workers as “independent contractors,” assuming they are running their own businesses and merely using the platform and paying the fee for the same. This frees the platforms from paying for benefits such as insurance and pensions, but leaves workers exposed. Imagine working full-time without paid sick leave or accident cover. That’s the reality for many gig workers today.
India’s Response in the Code on Social Security Law 2020
Unlike the U.S. or EU, which have debated classifying gig workers as employees, India took a different approach.
The Code on Social Security (2020) legally recognizes “gig workers” and “platform workers” as new categories, without making them employees. One can read the code on social security here: https://labour.gov.in/sites/default/files/ss_code_gazette.pdf
This allows limited access to welfare schemes like insurance and old-age protection, but since gig workers are not classified as employees, this still does not grant them rights such as minimum wage, maternity leave, job security or right to join a union. This solution is better than ignoring gig workers altogether, but still leaves many gaps.
How different countries are reacting to the gig economy
Different countries have legally protected the rights of gig workers, such as uber or deliveroo workers, in different ways.
- UK: In a landmark case (Uber v. Aslam, 2021), the Supreme Court ruled that Uber drivers are “workers” — a third category under UK law — entitled to minimum wage and holiday pay. https://www.supremecourt.uk/cases/uksc-2019-0029
- EU: The EU’s Platform Work Directive (https://eur-lex.europa.eu/eli/dir/2024/2831/oj/eng) creates a presumption of employment, meaning platforms must prove their workers are truly independent.
- California: The state tried to force platforms to treat workers as employees under AB5. But later it was watered down, after pressure from tech companies. One can read more at https://www.ftb.ca.gov/file/business/industries/worker-classification-and-ab-5-faq.html
- Australia: Still treats gig workers as contractors. But safety concerns have pushed regulators to consider reforms. https://sprintlaw.com.au/articles/gig-economy-in-australia/
Why Courts and Laws Aren’t Enough
Even when the laws change, their enforcement is tricky. Gig companies (which are often tech companies like Uber and Swiggy) have lawyers who often know how to exploit loopholes. And with work spread across borders, national laws struggle to keep up.
Algorithmic management, where an app decides your job, your pay, and even your rating, is another black box. Workers rarely know how decisions are made. Some countries, like Spain and the EU, are trying to regulate this, see https://www.eurofound.europa.eu/en/european-industrial-relations-dictionary/algorithmic-management . But most of the world still treats it as a tech issue, not a labor one.
What Might a Fair Future Look Like?
Some possible solutions to giving gig workers fair benefits are as follows:
- A Third Worker Category: Somewhere between employee and contractor, with basic protections but more flexibility.
- Portable Benefits: Benefits (like health insurance) that stay with the worker across gigs and platforms.
- Algorithmic Transparency: Laws requiring platforms to explain how their algorithms affect workers’ earnings and rights.
- Global Frameworks: Given the cross-border nature of gig work, we may need international standards, like ILO guidelines. See https://www.ilo.org/digital-labour-platforms
Conclusion
The gig economy isn’t going away. But if left unregulated, it risks becoming a race to the bottom for workers. Laws must evolve, in India and elsewhere, not just to protect rights, but to preserve the dignity of work itself.
India has the chance to innovate with smart, adaptive legal reform. It should focus on enforceable protections, not just good intentions. That includes clear rules on benefits, grievance redressal mechanisms, and contributions from platforms to social insurance schemes.
We need dynamic and adaptive legal frameworks that reflect the new realities of work. This is not about fighting technology as such, but about ensuring it serves people, not just profits.
