The COVID-19 is infecting thousands of people daily amid a surge in cases in many areas. While the lockdown measures implemented by the government might have reduced the number of casualties, it is causing strain on the economy. One such category is the gig workers where digital companies face challenges of massive repercussions to the future of the gig economy.
The world is reeling from the effects of the pandemic, economically and otherwise. Indeed, economic experts are yet to quantify how much of a hit the global economy will take. However, the case of the Indian economy is peculiar. Before COVID-19, indexes for the Indian economy indicated an expected contraction. Therefore, whatever impact the pandemic has on the global economy, the Indian economy feels it more.
It didn’t take time for this to manifest as unemployment figures skyrocketed from 7.7% in February to a ground-shaking 23% in April, according to data collected by the Center for Monitoring Indian Economy (CMIE) after the government put the lockdown measures in place. CMIE’s report shows that most of these job losses occurred in the informal sector, which employs about 90% of the Indian workforce, lost their jobs.
You might also be interested to read: Gig Economy Rises as Freelance Work Supersedes Traditional Jobs
Gig workers in the Indian economy also form a substantial majority of the informal sector. The gig economy has generated over 56% of new employments and has become a viable alternative to the world of corporate business. It is a market that offers all kinds of services, such as delivery boys, independent contractors, consultants, and bloggers. Gig economy platform consists majorly of the young crowd who depend solely on this as their source of income.
However, the multifaceted nature of the freelance economy means it provides all kinds of services. So, as demand for some services is reducing, the reverse is the case in other areas. Since the lockdown started, demand for food and grocery items, among others, has increased. But the reality facing the digital economy companies is such that they cannot shift services from one location to another to take advantage of the increase in sales. These companies now face a situation where they have to cater to the supply side of their franchise (their workers) and the demand side as well (customers).
To deal with this situation, digital economy companies have started to explore avenues that bring a tweak to their business models. Companies have adopted the use of contactless delivery and payment methods to prevent the consumer and delivery person from spreading the virus. Aside from this, gig economy companies now realize how heavily dependent they’re on their workers.
To this end, they’ve taken steps to improve the work conditions of employees, including those on a contract staffing basis. Many of these companies now pay their workers hazard fees and offer paid leave of up to two weeks for staff members who get the virus. With these steps, gig economy companies can improve the social security for gig economy workers.
The gig economy is a vital aspect of the Indian economy, and, just like everything else, the coronavirus has caused a slow-down in the activities of some areas of the sector. The situation of things has brought new challenges to the fore, and how companies react can create a new gig economy post COVID-19.
You might also be interested to read: Gig Work is Gathering Steam But The Need Of The Hour Is To Have Regulations Protecting Gig Workers In Place
References:
- Covid-19 puts a burden on gig economy workers. But can they deliver without social protection? by Sangeet Jain||March 23, 2020
- Covid-19 hurts the backbone of the Indian Economy by FES India|| May 7, 2020
- What does the novel coronavirus mean for the gig economy? One brief|| April 15, 2020
Related Topics:
