Mumbai and Bengaluru: Arif*, 28, shuffled uncomfortably in the driver’s seat of his Maruti Wagon R as he tackled the crowded streets of Lower Parel, Mumbai’s arterial business district, on a sultry April 2019 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, adding, “I have to take a break after each trip because it hurts.”
Arif is among the 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 so on. Employers include web- 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, and between late 2017 and early 2018, Ola 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, 2019.
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, two; while Zomato scored four. The only criterion that Ola and Uber met was pay, the Quartz India report added, meaning they “paid at least the local minimum wage, including employment costs incurred by the worker”.
This is the third and final story in our series on the informalisation of employment in India. The first and second dealt with the impact of contractualisation, when companies no longer hire directly and on permanent positions, but prefer to go via contracts, which enables them to hire and fire more easily, and cut back on perks and benefits.
India faces rural distress-led migration and a four-decade-high unemployment rate of 6.1%, the Periodic Labour Force Survey conducted by the National Sample Survey Office (NSSO) between July 2017-June 2018, released May 31, 2019, said. The government had withheld this report, but it had been leaked in January 2019, 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 2 million jobs.
No reliable data are available on the number of jobs created in the gig economy in India so far. Nevertheless, 70% of corporates 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--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 P.C. 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 existence 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 upto Rs 35,000 a month including incentives. However, the income goes into paying off his car loan, paying for fuel, maintenance and car insurance, and Arif’s medical needs, rent and household expenditure.
‘Can’t afford to be sick, on leave’
Sustainable, inclusive growth and productive employment are about more than just employment, Deborah Greenfield, deputy director-general for policy at the International Labour Organization, said in a press release in February 2019. “Equality and decent work are two of the 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--unless policy-makers meet the challenge,” an accompanying report cautioned.
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 a.m. and work till 11 p.m. or midnight,” he said. “Long hours meant disturbed meal routines and that led to acidity and bodyache. I didn’t even have time to take a toilet break.”
A surgery to remove his appendix, conducted at a private hospital, cost him Rs 80,000 and ate into the 20 installments he owes his bank on a Rs 2 lakh ($2,880) car loan. The government hospital he first visited first sent him home with just painkillers. A CT scan at a private hospital, costing Rs 16,000 ($230--or half his monthly income), showed a burst appendix. “I was almost unconscious by the time I made it to the operating table. For three days, I drifted in and out of consciousness,” he said.
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 this 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 Indian Council for Research on International Economic Relations (ICRIER), a research organisation, 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.”
Uber, which launched its initial public offering (IPO) on the New York Stock Exchange in May 2019, disclosed that it currently has 30 million cars on its platform in India, of a total 850 million across the world. Uber generated 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, 2019.
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”.
“With Uber going public it will be interesting to see how the money is created for the shareholder,” said Kapoor. “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.”
‘60 trips in 4 days to earn Rs 2,000 incentive’
Ever since liberalisation, the manufacturing sector, particularly organised manufacturing, has been expected to generate jobs to absorb the millions who joined the labour force each year. Prime Minister Narendra Modi too emphasised the 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, as IndiaSpend reported in March 2019. The latter are lower paid and more insecure, and often unable to unionise to improve their bargaining power.
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. 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.”
“In a country with so many informal jobs, [gig] jobs add a new kind of informality which makes the existing challenge harder to solve,” said Kapoor.
Agrarian distress is causing mass exodus from farms to cities, too, as our ongoing series on drought shows. 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 northwest 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 10-15 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 to Wednesday” to earn the weekly incentive of Rs 2,000, adding that running an Uber cab 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 a 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 upto Rs 10,000.
“Uber takes commision of 25% and I think Ola is higher at 30 to 35%. It was better when I joined,” he adds. “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 3,000-5000 per week, a sum so low even auto-rickshaw drivers earn more, he said. Getting the car serviced at an authorised centre, twice as expensive as taking it to a local garage, 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.”
Ola and Uber drivers struck work 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, 2019. But 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 an 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, delivering food on a bike
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- to 15-hour engagement. However, unlike app-based taxi companies, Zomato provides accident and health insurance; Uber Eats provides accident insurance. The delivery executives have their own bikes for delivery, loans for which add to their low-income burden.
Raghu*, 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 to 20 times through city traffic to deliver food.
Delivery executives receive Rs 1,150 as incentive 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 upto 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 180-200 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 room rent, to repay his bike loan, and for food and other essentials. He too hails from a farming family which 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 a.m. to 11 p.m. 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].”
The dust and pollution are serious problems, he said, and by the end of the day, his body aches. But in his contract with Zomato, Rajkumar 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 offer 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 comments. We have requested for comments from the ministry of labour and employment and the NITI Aayog. We will update if and when we receive them.
*Names of drivers and delivery executives have not been disclosed at their request.
(Paliath is an analyst and Salve is programme manager at IndiaSpend.)
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