Why Gig Workers Need Binding Regulation, Not Just Promises

Every day across India, nearly 10 million gig workers deliver food, ferry passengers, complete digital tasks and manage home chores for a meagre ₹300–500 a day, often without job security, enforceable contracts or meaningful social protection. While this year’s Budget acknowledged welfare for gig workers as overdue, it stopped short of creating binding legal regulation.

The Code on Social Security, 2020 marked the first attempt to consolidate nine labour laws and formally recognise gig workers. Yet, despite receiving Presidential assent in 2020, the Code isn’t operational. 

This policy gap exposes a three-pronged structural failure: opaque algorithmic task allocation, undisclosed pay calculations and customer-rating-based deactivations, compounded by the absence of statutory safeguards or appeal mechanisms. Most critically, there is still no national clarity on working hours or wage standards for gig workers. Unsurprisingly, the debate has hardened on both sides.

The consequences are stark. Gig workers endure chronic income volatility, not driven by market forces but by information asymmetry that strips them of bargaining power and traps them in a system where exit itself risks long-term economic ruin.

Market Failure
Today’s platform-based gig economy operates through three opaque levers: task allocation, pay structure and customer ratings. Algorithms decide who gets work, how much they earn and whether they remain employed at all. For workers, these systems are black boxes.

Gig workers have no visibility into how jobs are assigned, how earnings are calculated or what triggers deactivation. A rating below an undisclosed threshold can end livelihoods instantly, with a tap on a screen and no legal recourse.

The gig workers’ strike over low pay and non-existent social security on New Year’s Eve was testament to this dysfunction. Platforms suddenly offered ₹110-150 to the workers for each delivery—ten times more than the normalised pay— demonstrating that higher wages are viable, especially during peak demand. That capacity is simply suppressed through algorithmic opacity and cost rationalisations. 

Workers are also burdened with unrealistic delivery promises, often 10 minutes, while ID blocking as retaliation for strike participation underscores the absence of legal protection.

The widespread income volatility of gig workers reflects more than mere algorithmic or systemic failure: it is a structural issue stemming from a flawed market design. Information asymmetry, the heart of the problem, is worsened by quasi-monopolistic market power, rendering gig workers powerless to negotiate terms or consider alternative employment. The compounding effect? Gig workers give in to arbitrary terms and lack of statutory safeguards, leading to exploitation under the guise of “flexibility”.

Shouldn’t labour law reflect this reality?

What Works
Telangana offers a compelling template. The Draft Telangana Gig and Platform Workers (Registration, Social Security and Welfare) Bill, 2025 grants gig workers legal identity, establishes a Social Security Board, mandates registration and requires a seven-day notice before deactivation. Crucially, it introduces grievance redressal and demands transparency in algorithms governing job allocation, pay and ratings. Though awaiting implementation, the model prioritises dignity through regulated transparency.

Internationally, the EU’s Platform Workers Directive, expected to be implemented by Member States by December 2026, provides safeguards on algorithmic transparency, data protection and the right to explanations for job allocation and deactivation. India would do well to adapt these principles to its own context. 

The Fix
A promise without enforcement is policy theatre. Welfare announcements that lack regulation are like cough suppressants. They ease symptoms while leaving the disease untreated. For proper regulation, we need a bottom-up approach to address the grassroot issues without missing the plot or wasting time on fixing things that aren’t broken. 

The 2026 Budget offers a clear chance to course-correct, but action need not wait. Implementing the Code on Social Security, 2020 would be a vital first step. Parliament should also enact a focused national law, modelled on Telangana’s framework, with firm provisions on algorithmic transparency, pay disclosure, termination safeguards, data protection, minimum pay floors and working-hour limits. The Code and gig-specific legislation must operate in tandem.

The proposed 90-day threshold for availing social security, which was publicly circulated as the aftermath of the strike, is pragmatic and humane, but only if rolled out in a phased, enforceable manner.

The gig economy is projected to grow multi-fold by 2030. We are barely five years away. Without stringent regulation, India’s gig workers are at the risk of endangerment and eventual entrenchment. As gig workers keep the economy running, shouldn’t the law finally run for them too?