WageIndicator - Social security in India's platform economy

Author: Martijn Arets (Website - LinkedIn - Twitter)

In a largely informal labor market, platform work could actually give workers more social security. I discovered this during my trip to India, where I talked to Prakash Gupta Apoorv Kulkarni. They are respectively lead and head of the Centre for Inclusive Mobility at the policy research and social innovation think tank OMI Foundation. In The Gig Work Podcast from the WageIndicator Foundation we talk about their research on social security in India's platform economy.

More inclusive, secure and valuable

In countries like North America, Europe and parts of East Asia (‘Global North’), social security is usually linked to an employment contract. Since platform workers often work as freelancers, they have little or no security. In developing countries (‘Global South’), the labor market is different. In India, for instance, nearly 82% of the workforce engages in the informal sector, and nearly 90% is informally employed. This means that most workers hardly have any social security.

Kulkarni and Gupta examine how platform work can be more inclusive, secure and valuable for Indian workers. On the basis of their studies, they provide recommendations to policy makers, civil society, and other international development institutions. Kulkarni: "Our ultimate goal is to be able to help public policy shape up in a way, that's going to be enriching for the ecosystem."

Gupta and his research team studied the working conditions of 10 work platforms in four different sectors: passenger mobility, e-commerce, local delivery and home services. The aim was to discover what social benefits the platforms currently provide and what could be done to provide more safety and security. The researchers also compared the working conditions of other countries.

Platformization as stepping stone to formalization

Although the Indian government has a clear definition of gig work, there is still no formal policy for workers in the gig economy. Since a large part of India's population works in the informal economy, social security is traditionally linked to  formal employment. "That is how we adopted it from countries in the Global North", says Gupta. "But because so much work is informal, over time we have made sure that certain social security benefits also apply to workers without formal  employment."

In Europe, politicians worry that platform work leads to fewer permanent contracts and fewer securities, in other words, they ‘unbundle’ social security. In countries like India, the opposite is happening. ‘There is some kind of formalization. At least in the administration of the business operations has happened in the informal economy through platforms,’ says Gupta. ‘As a result we see accidental insurance, and health benefits being provided to the workers. We have taken the first step towards formalization. One of our research goals is to extend security for platform workers without having to classify them as employees. That way, platform work can actually contribute to more protection.’

Platforms offer more working benefits

Many people now working via platforms used to work in the informal sector. As platform workers, they now tend to have more benefits and protection, the survey shows. Most platforms in India at least offer accident insurance. Other common forms of social security include life insurance, health insurance, educational support for children and access to credit .

In addition, there are apps with benefits specific to the needs of their target group. For example, to get more women into work, food delivery apps offer extra protection from sexual harassment, menstrual leave and maternity health insurance. The platforms are now doing all this on their own initiative. These initiatives are being taken by the platforms independent of any government support.

‘The digitisation of work is unstoppable, so we need to think about new ways to manage the flexible labour market,’ says Gupta. ‘This is an international issue. A traditional solution simply does not fit platform work. Think of the taxi driver who recruits customers via five different apps. In this case, who is his employer?’

Bringing employers and securities together

Furthermore, some social securities in India are covered by the national government, others by the state, and some are shared. "Social security is too complexly regulated", says Kulkarni. "It should be a shared responsibility between governments, platforms and workers. The government should encourage innovation to make this happen. Our research shows that tech companies such as platforms can help."

How do you organize social security without a worker having one responsible employer? One solution, for example, would be a ‘worker ID’, a digital, personal portal for social security. Workers could link all their different sources of income to this. All those clients, platform businesses and government organizations together contribute to their social security. 

Conclusion

I found it interesting to learn that there are alternative ways to regulate social security for workers. You don't need an employment contract to protect workers, it turns out in India. Platforms could become an ideal distribution partner for these securities, as they have an all-seeing eye on a highly fragmented market. In addition, platforms could help disseminate information to workers not normally visible to formal bodies such as governments and trade unions. An example is the Colombian platform for domestic cleaners Hogarú.

At the same time, there are still a lot of questions and challenges, such as: who pays for what? And how do we organize such a ‘worker ID’ in an institutionally fragmented country like India? In addition, as in other countries, the balance of power between platform and worker is also out of balance in India and there is ambiguity in algorithmic processes and decisions and pricing. Another problem is that platforms change their terms regularly. In the previous episode of this podcast, I spoke to journalist Varsha Bansal. She explained that platforms in India initially lured workers with high compensation and pleasant working conditions. As a result, workers who were previously in permanent jobs decided to work in the platform economy. But over time, conditions changed. Profit motives came at the expense of compensation for platform workers. And this is not only happening in India. To improve the working conditions of workers and contribute to a fair labor market, platforms need to become more reliable partners. This is only possible if they are open to cooperate with government and trade unions. After all, a company's goals never entirely match the needs of workers. To move society forward, it is therefore important to bring all stakeholders together. Studies like the one conducted by the OMI Foundation contribute to this.

Want to know more about the survey? Listen to the full podcast episode here.