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Uber economy: Look beyond formal and informal jobs, say experts

What is important is these companies often keep changing the incentives and terms of work. There are enough stories of frustrated drivers who bought cars when the incentives at Ola and Uber were high but now are struggling to make ends meet.

Sonal Khetarpal   New Delhi     Last Updated: December 21, 2018  | 22:14 IST
Uber economy: Look beyond formal and informal jobs, say experts

There is a strong need to redefine new forms of jobs outside the binaries of formal and informal, says Shahana Chattaraj, Visiting Fellow at Centre for Policy Research. Formal sector in India constitutes a miniscule portion of the entire workforce with more than 90 per cent of jobs still being in the informal sector.

With the rise of gig economy, contract work and freelancers, this number is only set to increase, thanks to the large number of people preferring platforms such as Ola, Uber, UrbanClap, HouseJoy. Ola already has over one million drivers in India, said Aishwarya Raman, Associate Director at Ola Mobility Institute.

The downside is they are not covered under any welfare regulation or social protection for workers because of these companies' marketplace model, says Chattaraj. Currently, as per law, the platforms are seen as intermediaries. They are not obliged to provide protections and benefits to the people using the platform, who are considered 'self-employed' or independent contractors.

Even though these people are not full-time workers in a legal sense, they are not accessing it in the downtime but depend on them for their earnings. During her research, Chattaraj found that drivers using Ola and Uber typically worked 12 hours a day in both London and Delhi, some extending it to 18 hours too.

Also read: Gig work: India now contributes 1 in 4 freelancers

What is important is these companies often keep changing the incentives and terms of work. There are enough stories of frustrated drivers who bought cars when the incentives at Ola and Uber were high but now are struggling to make ends meet.

Often, the view of these companies is that most of the service providers don't use one platform but are registered on multiple aggregators. For instance, an Uber driver will switch to Ola anytime if the latter offers more incentives.

Also read: On-Demand Workforce

But, it calls for companies to look at social security differently. A case in point is Singapore-based ride hailing transport service Grab which in collaboration with AXA Insurance Singapore had launched AXA Pay-As-You-Grab (AXA PAYG) policy, which is essentially a usage-based commercial motor insurance for the car drivers where they pay insurance premiums calculated on a 'per kilometre' basis.

The question of whether drivers for Uber are workers or employees is now being debated in courts and by policy makers in cities around the world. In India, as the Government introduces social security for informal sector workers, platform aggregators may enable workers to access welfare schemes.

Raman says the company has been piloting a project where auto drivers that are part of trade unions can get social security from the state government. Currently, it is available only for taxi drivers. She adds, Ola also has a 'Chalo Befikar' insurance programme in partnership with Bajaj Allianz for its driver partners and a finance literacy programme to help them leverage loans as a tool for social mobility.

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