How COVID-19 Pandemic Leads Fragile Situation for the Gig Economy?

The health consequences of COVID-19 are continuously spreading all over the world, affecting lives and severely impacting economy. As businesses are closed and billions of people are sent to stay home to prevent the spread of the virus, the pandemic has wreaked havoc gig economy. According to a recent survey by AppJobs, around 70 percent of gig workers now have no income, while 89 percent are looking for a new income source. As the gig economy offers flexibility, workers have limited access to benefits being without a job, such as health insurance, sick leave and others.

In India, the impact of COVID-19 has impacted the country’s gig economy, which was earlier estimated to achieve a market size of US$455 billion by 2023, according to ASSOCHAM. The threat in this economic space is largely led by ride-sharing giants Uber and Ola, online food delivery firms Swiggy and Zomato, as well as Oyo, Airbnb, and among others. They have all suspended or slowed down their operations due to nationwide lockdown.

Already, Ola and Uber have suspended their operations in most large cities as the government imposed restrictions across the nation over the mobility of people. Considering a Statista report, the revenue from the ride-hailing sector was expected US$54.09 billion by 2023, with a CAGR of 13.5 percent during the period of 2020-2023. On the other side, the food delivery segment was projected to add US$13.2 billion in revenue by 2023, with a CAGR of 9.5 percent.

Despite this, many gig workers are fulfilling critical roles, in the time of crisis, to keep society moving as people have been advised to stay their homes. For instance, food delivery and Uber drivers are still working, but with limited access. Conversely, the pandemic is demonstrating many of gig workers to struggle long-term.

Strengthening the Gig Economy

Since the coronavirus outbreak hit gig workers economically, multiple partnerships between local governments and private businesses in the Indian gig economy are creating hopes for them. The country is the fifth-largest country for Flexi-staffing after the US, China, Brazil, and Japan. For instance, BigBasket reportedly established 57 partnerships with restaurant associations, retail associations, garment factories, and ride-hailing firm Uber, to ramp up hiring. Uber has also announced two new business-to-business partnerships. The company’s UberMedic, a 24/7 service that will work with healthcare authorities, as well as it will provide transport for front-line health care providers to and from their homes and medical facilities. Uber’s partnership with BigBasket will help driver partners with last-mile delivery of everyday essential items in four cities.

Additionally, Ola Cabs will also provide 500 vehicles to the Karnataka government for transporting doctors and for other Covid-related activities. Flipkart is also looking to collaborate as the company is currently in talks with cab aggregators and the Indian Railways to ensure smooth and hassle-free movement of essential products from vendors to customers.