Written by Himanshu Verma & Nishka Shah students at Gujarat National Law University (GNLU), Gandhinagar
INTRODUCTION
As of 2025, there are over 12 million gig workers in India, working for companies such as Zomato, Swiggy, Uber, and Ola, primarily as delivery partners and drivers who are not in a typical employee-employer relationship with the companies. Many workers remain uncertain about their legal status, do they have rights like healthcare, sick leave, or minimum wages.
- Who are gig workers?
Gig workers are people who work in the gig economy, an economy that is characterised by temporary jobs rather than permanent jobs. The individuals here earn income by performing part-time, flexible or rather freelance jobs usually through digital platforms. Employed on a temporary, contractual basis, they lack rights like minimum wages or paid sick leave. This blog will further delve into the labour laws and the rights to which the gig workers are entitled.
UNDERSTANDING THE NUANCES OF THE GIG ECONOMY IN INDIA
The rapid rise of digitalisation and widespread internet access has transformed the economic landscape worldwide and has determined the future of labour and employment by laying a solid foundation for the gig economy. The rise of start-ups and increasing consumer demand for quick services like food delivery has created many opportunities for gig workers in customer service roles. The “2021 World Employment and Social Outlook Report”, published by the International Labour Organisation,suggested that the number of digital labour platforms has increased fivefold over the past ten years. As E-commerce is expanding in India, it has become one of the biggest worldwide gig hubs according to the Economic Survey of 2020-2021. By the end of 2029-30, it is projected that the gig workforce in India will rise to 23.5 million including a mix of low, medium and high-skilled jobs, accounting for 6.7% of the non-agricultural workforce and 4.1% of the overall workforce according to the official report of “NITI Aayog (2022)”.
The Gig Economy in India is divided into two categories: platform workers and non-platform workers. Platform workers usually provide services to those companies that use online algorithms in order to connect with their customers, such as Zomato, Swiggy, Amazon, etc., working as Delivery partners. Non-platform workers are those who are engaged in temporary or short-term employment, which does not use digital platforms such as daily wage labourers at construction sites.
- Why do workers choose gig jobs?
There are many advantages that the gig economy work offers, attracting individuals to such arrangements primarily due to its flexibility and independence. The workers have the right to choose their work schedules, take time off and choose employers based on personal preference, offering work-life balance. This not only helps freelancers to work on multiple projects at the same time and set their rates, but is also a very good platform for those who are seeking additional income.
- These advantages, however, come with a number of difficulties.
The temporary nature of work, lack of job security and income instability, limited legal protection and lack of social security benefits, etc., are concerning. Gig workers often face a problem of lower pay and long working hours with no paid sick leaves and insufficient safety measures at the workplace. The workers are being tied to an undefined job status, which leads to their exploitation. Moreover, workers who are Ambitious and have a willingness to learn and develop their skills are not provided with that opportunity. Concerns are raised about the labour laws due to the disruption of the traditional employer-employee arrangement caused by the expansion of the gig economy.
Traditional employees, contractual workers, informal workers, etc., are usually governed by a set of laws that aim at protecting the rights of various workers working under this category. They get benefits like Minimum wages, paid sick leaves, Bonuses, Employee provident fund and pensions. Gig workers are often excluded from these protections.
Important labour laws are created, such as “The Factories Act 1948”, to address the safety and welfare of the factory workers, “The Workmen’s Compensation Act 1923”, which offers compensation to employees or their families in case of any workplace accidents causing death or disability. Furthermore, “the Minimum Wages Act” and “the Trade Unions Act” are established for the benefit of the workers. But all these laws were created keeping traditional workers in mind; thus, the gig workers are not covered under these sections and are not entitled to any benefits under these.
Due to a rise in the number of gig workers in the country and after filing many PILs, laws are now being created to Favour the gig workers, to benefit them and provide them with equal benefits. In the case of “Indian Federation of App-Based Transport Workers (IFAT) v. Union of India”, IFAT filed a Public Interest Litigation (PIL) at the Supreme Court in September 2021, claiming that gig workers are not considered eligible for social security payments since they are considered independent contractors. The petitioner also claimed that gig workers employed by app-based platforms should be classified as ‘unorganised workers’ and, therefore, be entitled to social security benefits under existing labour laws. The Delhi High Court in the case of “App-based Transport Workers v. Government of NCT of Delhi” The court has instructed the government to grant social security benefits to the individuals working on gig jobs and discovered that gig workers are eligible for social security benefits such as health and disability insurance, and ordered the government to consider the possibility of implementing a social security scheme for gig workers.
- Laws enacted in favour of gig workers
For the first time, gig workers were given legal legitimacy in “the Code on Social Security”, released in 2020.The legislation put the workers in a separate category and made it compulsory for them to register to qualify to receive social security benefits. Registration was prohibited by law for anyone below the age of 16 or above the age of 60 from joining.
There have been a few state-level initiatives to enhance the well-being of gig workers, including “the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, 2023”. It is the first state-level law in India that targets specifically the gig workers. It set up a platform-based welfare board for gig workers where they had to register themselves. Workers were given a welfare fee from the platform for all the transactions made. Likewise, the Karnataka government also enacted “the Karnataka Ordinance for Welfare of Gig Workers (2025”). They also created a platform for gig workers similar to Rajasthan to provide welfare fees and social security benefits.
In 2021, “the Ministry of Labour and Employment launched the E-Shram portal”, which aimed to create a complete national database for unorganised workers, like gig workers. This portal is useful to gig workers as it provides them with official recognition and ease in accessing social security benefits. The enrolled gig workers on this platform were given access to health insurance under “the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)”. The portal also allowed employees to track benefits due to them and manage their social security data.
How do these platforms operate and affect profits?
Applications such as Swiggy, Zomato, and Uber run on complex algorithmic management systems designed to improve cost-effectiveness, consumer satisfaction, and delivery rates.
Platforms use what is known as real-time dynamic dispatch algorithms, which automatically execute and allocate tasks (e.g., food delivery or transportation services) based on multiple data indicators, like geographic location, availability of workers, constraints in delivery time, customer reviews, and even weather or traffic conditions.
Each app uses its proprietary driver-facing interface with a gamified incentive model, where workers are encouraged to complete more orders during peak hours to earn bonuses. These incentive structures are often non-transparent and change frequently without adequate notice. Workers often chase “quests” (e.g., 15 deliveries for ₹300 extra) that push excessive hours without guaranteed returns.
For instance, a delivery partner on Zomato might receive ₹20–₹30 per delivery, with occasional surge pricing incentives. But platforms also subtract penalties for order rejection, delays, or customer complaints — all without fair hearing mechanisms. The net effective hourly income sometimes falls below minimum wage once fuel, vehicle maintenance, and mobile data costs are deducted. Uber drivers often face the same dilemma — they must maintain a high acceptance and completion rate to stay “active” on the platform. After fuel, maintenance, and data costs, many delivery workers’ net hourly income falls below the statutory minimum wage.
Platforms use proprietary algorithms to allocate and monitor work in real time. Opaque algorithmic scoring and silent deactivations leave workers with no clear recourse or ability to improve.
The control exercised by the platform — algorithmic task allocation, invisible surveillance, economic dependence, and performance-based exclusion — is structurally identical to traditional employment. Yet legally, these workers are still treated as independent contractors.
Algorithmic Control, Human Consequences
This entire system operates with no human supervisor, no HR, and no formal grievance mechanism. What exists is algorithmic authoritarianism—a silent, real-time decision-making structure that nudges, ranks, rewards, or punishes workers without dialogue.
India urgently needs regulations that mandate algorithmic transparency, due process before deactivation, and the right to data access. Workers must be empowered with tools to understand how their work is being measured and how to contest decisions made by non-human systems.
Worker-Owned Platforms in the Indian Context
India is uniquely positioned to lead a model of worker-owned digital platforms. Drawing from the success of dairy “cooperatives like Amul”and self-help groups under “NRLM”, gig worker cooperatives could revolutionise platform work. Worker-owned cooperative platforms—modelled on successes like Amul—could offer transparent governance, profit-sharing, and in-built social security, giving gig workers a genuine stake in the system.
In Bengaluru, informal ride-hailing collectives already operate via WhatsApp groups, sidestepping platform fees. With limited support, such grassroots models could evolve into worker-owned digital cooperatives tailored to India’s unique labour ecosystem.
- Conclusion
The gig economy represents both India’s digital transformation success and its most pressing labour policy challenge.
With more than 12 million platform-mediated workers,, India is confronted with the sharp reality of technological change and social protection. As algorithms maximise profit, workers are legally invisible and economically exposed.
Code on Social Security 2020 and the Rajasthan and Karnataka state legislation demonstrate policy consciousness. However, implementation trails behind, leaving gig workers without adequate protection. Worker-owned cooperative models hold immense promise as substitutes for platform-centric models.
India is at a juncture where policy decisions of today will shape whether the gig economy fuels inclusive growth or continues digital exploitation. Algorithmic transparency, due process, and collective action by workers are essential features of inclusive technological growth.