Arif*, 28, shuffled uncomfortably in the driver’s seat of his Maruti Wagon-R as he tackled the crowded streets of the Mumbai business district of Lower Parel on a sultry April evening. A hit track from the recent Hindi movie Gully Boy played on the music system but it did nothing to drown out the noise outside or ease his discomfort.
Arif had recently undergone an appendectomy and though the stitches had been removed, the wound was yet to heal completely. But rest was not an option. “If I stay at home, I won’t be able to earn anything,” he said. “I have to take a break after each trip because it hurts.”
Arif is among 1.5 million drivers working for ride-hailing companies in the country, part of India’s emerging gig economy – a labour market characterised by short-term contracts or freelance work for drivers, delivery staff and others. Employers include web-application or mobile application-based cab services such as Uber and Ola, and food delivery applications such as Zomato and Uber Eats.
Ola and Uber India have a 95% share of the country’s platform-taxi market. Between late 2017 and early 2018, Ola alone had 56.2% of that share, Economic & Political Weekly reported in June 2018.
But app-based service companies such as Ola, Uber, Uber Eats, and Zomato have some of the worst working conditions among Indian start-ups, according to a study by the Fairwork Project, an initiative led by two Oxford University researchers, Quartz India reported on March 26.
The companies were ranked on five principles of fairness – pay, conditions, contracts, management and representation. Of a total score of 10, Ola and Uber scored two, Uber Eats scored two, while Zomato scored four. The only criterion that Ola and Uber met was that of pay, the Quartz India report stated, meaning they “paid at least the local minimum wage, including employment costs incurred by the worker”.
The gig economy
India faces rural distress-led migration and a four-decade-high unemployment rate of 6.1%, said the Periodic Labour Force Survey conducted by the National Sample Survey Office between July 2017 and June 2018, released on May 31. The government had withheld this report, but it was leaked in January, causing consternation over its bleak findings ahead of general elections. In response, the NITI Aayog, a government think-tank, asserted in January 2019 that application-based cab companies such as Ola and Uber alone had created more than two million jobs.
However, no reliable data is available on the number of jobs created in the gig economy in India so far. Seventy per cent of the corporations surveyed by a human resources consultancy, Noble House, said they had used gig workers at least once, for major organisational issues, in 2018.
The gig economy is also prone to rotating attrition, which is when the same people move from one job to another. “Given the nature of the jobs offered by the gig economy, one does expect large-scale job rotation,” said PC Mohanan, former acting head of the National Statistical Commission, who had resigned after the government’s refusal to release the NSSO jobs report. Gig jobs are seen mostly in large towns or cities that have higher job mobility, he said.
Our investigations from Mumbai and Bengaluru show that although a gig brings in money, it offers none of the benefits that regular jobs bring – leave, limit on working hours, overtime, job security and health benefits.
Our interviews with workers from these four app-based service providers in Mumbai and Bengaluru revealed that many of them were migrants to the city and spent long hours on the job to earn incentives to be able to send savings back home or make their lives in their adoptive city a bit more comfortable. They had little or no employment benefits such as insurance and complained that their incomes were declining.
Arif, the driver, said he worked 15 hours a day to earn up to Rs 35,000 a month, including incentives. However, the money goes into paying off his car loan, paying for fuel, maintenance and car insurance, medical needs, rent and household expenditure.
‘Can’t afford leave’
Sustainable, inclusive growth and productive employment are about more than just employment, Deborah Greenfield, deputy director-general for policy at the International Labour Organisation, said in a press release in February. “Equality and decent work are two pillars underpinning sustainable development,” she said.
“[Some] new business models, including those enabled by new technologies, threaten to undermine existing labour market achievements, in areas such as improving employment formality and security, social protection and labour standards. Policy-makers need to meet the challenge,” an accompanying report cautioned.
But the stories we heard in Mumbai and Bengaluru indicated that the challenge is far from being met.
Arif, a high-school graduate with a young family, has been working with Ola for three years. He blamed his work hours for his poor health. “When I started driving, I would begin at 7 am and work till 11 pm or midnight,” he said. “Long hours meant disturbed meal routines and that led to acidity and body ache. I didn’t even have time to take a toilet break.”
Surgery to remove his appendix, conducted at a private hospital, cost him Rs 80,000 and ate into the 20 instalments he owes his bank on a Rs 2-lakh car loan.
The government hospital he first visited initially sent him home with just painkillers. A CT-scan at a private hospital, costing Rs 16,000, or half his monthly income, showed a burst appendix. “I was almost unconscious by the time I made it to the operating table,” he said. “For three days, I drifted in and out of consciousness.”
All these costs had to be paid out of Arif’s pocket because he was not insured and had no work-related health benefits or sick leave. He could not drive for a few months afterwards and that further eroded his savings. “A neighbour drove for me and that got me Rs 350 [in earnings] a day, but that was only on days he worked,” he said.
“Drivers or service providers act as independent contractors who use these platforms to make access for the customer easy,” Radhicka Kapoor, economist and senior fellow at the Indian Council for Research on International Economic Relations, told IndiaSpend. “Technology reduces transaction costs, but the nature of employment does not match the standard employer-employee relationship. In the long term, they may not have social security like insurance or pension, which increases vulnerability.”
The IPO plan
Uber, which launched its initial public offering on the New York Stock Exchange in May, disclosed that it currently has 30 million cars on its platform in India, of a total 850 million across the world. Uber generated a revenue of $ 11.3 billion (Rs 78,720 crore) in 2018, of which $ 9.2 billion (Rs 63,729 crore) came from its ride-sharing services and $ 757 million from food delivery service Uber Eats, The Economic Times reported on April 13.
Bhavish Aggarwal, Ola’s co-founder and chief executive officer, too has stated that he aims “for an IPO in the next three-four years”.
Said economist Radhicka Kapoor: “With Uber going public it will be interesting to see how money is created for the shareholder. If it comes at the expense of driver incomes, it will be a major problem. Then there is this perception that there are driverless cars, particularly in the US, which creates fear among drivers that they would lose their jobs. This suppresses the already low bargaining power of labour.”
Ever since liberalisation in 1991, the manufacturing sector, particularly organised manufacturing, has been expected to generate jobs to absorb the millions who join the labour force each year. Prime Minister Narendra Modi too emphasised the sector’s job-creation benefits when pushing for Make in India.
Yet, companies large and small, including large multinationals, are increasingly hiring fewer workers directly and on permanent positions, and more informally or through contractors, IndiaSpend reported in March. Contractual workers are lower paid and more insecure, and often unable to unionise to improve their bargaining power.
Of the approximately 61 million jobs created in India after liberalisation, 92% were informal, showed an IndiaSpend analysis of NSSO data for 2011-’12.
Workers opt for app-based companies sometimes as a supplementary source of income, but mostly because they cannot get regular salaried jobs, said Kapoor of ICRIER. “Lack of opportunity is pushing people to take up such jobs in India,” said Kapoor. “Initially, it seems that there is flexibility, but people here want a regular job. Job mobility is also restricted to big cities or large towns, which leads to an issue of migration.”
She added: “In a country with so many informal jobs, [gig] jobs add a new kind of informality which makes the existing challenge harder to solve.”
‘Rs 2,000 incentives’
Agrarian distress is causing a mass exodus from farms to cities. In our conversations with drivers and food delivery executives, many said they had come from rural or semi-urban homes, many of them either farmers or children of farmers with agricultural land that yielded little or nothing.
Take the example of Manjunath, 50, a farmer who has been a driver with Uber for a year-and-a-half. He owns a five-acre farm in his hometown, Hassan, 200 km north west of Bengaluru. Scanty rains had made farming unprofitable so he migrated to Bengaluru 15 years ago, leaving his brother to manage the farm. His family of four, including two children and his wife, depend on him.
Manjunath worked as a driver for a call centre for six years before he started driving his own car with Uber in the hope of better earnings. “I save around Rs 10,000 a month after making 10 trips to 15 trips a day, driving about 12 hours,” he said. He must pay Rs 28,000 every year as car insurance premium and Rs 18,000 a month as car loan repayment. Fuel costs Rs 800 or so, every day.
At app-based cab services, drivers’ incentives are linked to a minimum number of trips to be completed in a stipulated number of days.
Manjunath said he must complete 60 trips between Sunday and Wednesday to earn the weekly incentive of Rs 2,000, adding that such a system is beginning to affect his health. “The constant driving gives me body pain and I only get to go home every alternate day,” he said. “I do not have medical or health insurance from the company.”
Nagaraj*, 24, another driver with Uber, left his home in Amarapuram in Andhra Pradesh four years ago and moved to Bengaluru in search of a better life. Now living with his uncle and sister, he is disappointed with his earnings. “I came looking for a job after I finished my school and worked in a garment factory,” he said. “I thought this would be better because some of my friends were driving.”
The Rs 2,000 a week incentive he gets for making 60 trips in four days is the bare minimum he needs to make any savings, Nagaraj said. His expenses include a monthly loan of Rs 16,000 for his car and house rent of Rs 5,000, plus vehicle servicing that can cost up to Rs 10,000.
“Uber takes a commission of 25% and I think Ola is higher at 30% to 35%,” he said. “It was better when I joined. I made close to Rs 50,000 a month but now it has fallen to Rs 35,000.”
All drivers for app-based cab companies complained about falling earnings due to increased competition – more and more cabs are plying every day.
Arif makes around Rs 3,000 to Rs 5,000 per week, a sum so low even auto-rickshaw drivers earn more, he said. Getting the car serviced at an authorised centre, twice, is as expensive as taking it to a local garage, and further drains his earnings.
“Earlier I could make Rs 12,000 a week,” said Arif. “Even if I worked from Friday to Sunday, I earned nearly Rs 3,000 as the company used to give 1.5 or 1.6 times the charge during peak hours. Now we can make a decent amount only from long trips and on surge pricing.”
Futility of striking
Ola and Uber drivers called for a strike in October 2018 to demand better income. They wanted the base fare to be increased from Rs 8 to Rs 12. They threatened to go on strike again after their promises to meet demands made in October were ignored, The Times Of India reported on January 13. The strike was not very effective because not all drivers were car owners and protests petered out, Arif said.
“We were not united,” he said. “Uber refused our demands and instead of increasing they reduced the price to Rs 6 per km. When we went on strike during Diwali, the drivers had completely lost faith in the union leadership. There were allegations they were bribed by the company.”
The number of cars plying for app-based companies has increased so much that incentives have fallen, complained Narayana*, 37, an Uber driver from the drought-prone Kolar region in Karnataka. “It seems like everyone is driving a cab,” joked the farmer-turned-driver who said he still owns a one-acre mango orchard in his village.
“My aged mother who lives with me needed eye surgery and I had to pay for it from my pocket because I do not have health insurance,” Narayana said. “So, one of my cheques for repaying the car loan bounced.”
52 trips in 4 days
Food delivery apps such as Swiggy, Zomato and Uber Eats offer jobs to drivers and food delivery executives. Zomato has 50,000 delivery executives while Swiggy has over 55,000, The Economic Times reported on June 26, 2018.
But working conditions are taxing and demand 12 hour to 15 hour engagements. The delivery executives have their own bikes for delivery, loans for which add to their low-income burden. However, unlike app-based taxi companies, Zomato provides accident and health insurance, and Uber Eats provides accident insurance.
Raghu*, a 32-year-old school graduate, migrated to Bengaluru because there were few jobs that could earn him more than Rs 6,000 in his home district of Gulbarga. At Uber Eats, he said, he can make as much every week if he “works hard”. This entails working close to 14 hours a day, zigzagging 15 times to 20 times through city traffic to deliver food.
Delivery executives receive Rs 1,150 as incentive pay if they make 52 trips from Monday to Wednesday. Peak-hour delivery executives such as Raghu get between 1.2 and 1.4 times the usual fee of Rs 25 per trip, he said. He makes between Rs 25 and Rs 30 for up to 4 km and Rs 10 for every additional kilometre covered beyond that.
“If an executive makes 48 points between Monday and Friday, he gets a Rs 800 incentive,” Raghu said. But this means travelling 180 km to 200 km over five days. “It is tough.”
When he joined Uber Eats, Raghu paid an enrollment amount of Rs 1,300. “I got a t-shirt and bag, and Rs 300 was cut for insurance,” he said. “At Zomato, people have to be logged in constantly for a certain period otherwise they do not get the health benefit.”
Rajkumar*, a mechanical engineering diploma holder from Hassan who works for Zomato, told IndiaSpend he needs at least Rs 7,000 to Rs 10,000 to pay for rent, to repay his bike loan, and for food and other essentials. He too hails from a farming family that grows potatoes, tomatoes and coconuts, but water is scarce back home on the farm and the yield is not profitable. He left his first job as a toll-booth operator to join Zomato.
Rajkumar can earn a maximum of Rs 25,000 a month if he stays logged into the app from 8 am to 11 pm. He tries to touch 40 points or 20 trips a day at least, he said, and each trip earns him two points. “This helps me earn Rs 600 and an incentive of Rs 700 if I can do 28 trips,” he said. “Then I get Rs 30 per trip.”
Rajkumar has a Rs 3 lakh loan, the 9% interest on which keeps him perpetually in debt. “A monthly income of Rs 25,000 is insufficient to repay this loan,” he said. For any additional expense, he must borrow more money from friends and relatives. “I pay Rs 2,000 for a room that I share with a friend and have not repaid the loan for the bike I bought two years ago, for which I pay Rs 3,700 [as monthly repayments],” he said.
Dust and pollution are serious problems, Rajkumar said, and by the end of the day, his body aches. In his contract with Zomato, he said, he is entitled to health insurance worth Rs 5 lakh and a cover against accident worth Rs 1 lakh.
Another limitation of employment at app-based companies is the lack of avenues for professional growth. Although none of these jobs offers skill development, some do offer training in soft skills to help workers interact with customers, said Kapoor.
“I want to do something with my life, having come from far to this city to earn a living,” Rajkumar said. “But I have bills to pay.”
Ola, Uber, Uber Eats, and Zomato have not responded to requests for comment. IndiaSpend requested the Ministry of Labour and Employment and the NITI Aayog for comments as well. The story will update if and when comments are received.
*Names of drivers and delivery executives have not been disclosed at their request.
This article originally appeared on IndiaSpend.