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Tech in Work

Organising Informal Work in India

Aditi Surie (asurie@iihs.ac.in) is a senior associate at the Indian Institute for Human Settlements, Bengaluru.

The “platform economies” of today can provide traditional informal sector workers the opportunity to formalise and organise their work. In the case of Uber and Ola, the mobile-based taxi service companies have been able to provide their drivers with technological solutions to conventional problems like personal finance and wealth creation, job security, flexibility in timings, and regularisation of income payments.

Motor ameeron ki naukar hoti hai ... taxi gareebon ki ann data.

— Dev Anand, Taxi Driver (1954)

The story of economic aspiration in India can be told through the history of one automobile: the car. The car has been the signpost of a middle-class dream of settled success and wealth. The hero Mangal from the film Taxi Driver (1954), played by Dev Anand, sees the car as an object of luxury and aspiration: to own a car is a sign of achievement.

But the use value of a car is in owning it for one’s self and not in order to drive it for another. For those who are unable to own a car and its symbolism of luxury, it is an object whose value has to be extracted by labour upon it/with it. Driving the office cab, the long-distance holiday taxi, the airport taxi or the kaali-peeli (black and yellow taxis), the taxi driver in his (and it is usually his) many avatars has struggled to extract the full use value from the car and his labour. Extractive fleet operators, unorganised systems of operating and no enforcement—or very weak enforcement at best—of labour laws have conditioned the precariousness of these urban workers.

Uber, Ola and the Informal Sector

Car ownership is the basic premise for Uber’s business model. Platforms like Uber and Ola are predicated on individuals owning an asset so that the company does not have to. While the Indian middle class is the world’s largest customer base for automobiles, the taxi driver has been at the periphery of this consumption until now. The taxi driver has entered the asset-owning class by driving Uber and Ola cabs. He navigate this new asset-ownership class with loan payments, dropping incentives and a mismatch between the supply of drivers and demand for rides. There are layers of precarity that Uber and Ola have the potential to add to these informal sector workers.

It is necessary to investigate this feature of precarity, produced by the Ola and Uber model of work, for taxi drivers by looking at their experience of work.

The narrative, in recent reporting on the strikes carried out by drivers in major Indian metros, points only to the changes in drivers’ incomes and focuses very little on questioning the conditions of work. The focus of media reporting over the last three years has, in fact, been about the quantum of earnings and changes made to it. These reports oscillate from favourably hailing these companies as harbingers of innovation on Indian streets that allow drivers to earn well, to criticising them for opaque business practices and falling drivers’ incomes. These narratives see technology either as a panacea or, as another unwelcome vessel of foreign capital.

There is much less media reporting and circulation pertaining to other facets of the platform-economy model of work, which is characterised by digitally managed systems of service provision. These systems have been created to incentivise service providers or drivers to fit with the patterns of consumer demand in their cities. Work in automated digital markets, like that of Uber, is conducted with the sole purpose of meeting consumer demand. Drivers are now businessmen attached to a platform, rather than drivers who work for a transport company. Uber holds its drivers financially accountable for its own earnings as the duty of being efficient and meeting demand is transferred onto the driver/entrepreneur. 

Working in the Platform Economy

This article seeks to explore how digitally managed systems of service-provision, that is, technology through the platform economy, have and can substantively affect workers’ experiences of work, welfare and forms of job security. Important questions have been overlooked thanks to the quantum of efficiency that both Uber and Ola have brought to the unorganised taxi sector. Some questions are: how have these two companies confronted not only an unorganised taxi transport sector but also the informality of work? How has the mode of work within the platform economy affected the informal worker through technology? Can technology of this kind alleviate or enforce the precarity of informal working conditions?

... here [it] is good because if you work from Monday to Sunday, Tuesday you’ll get money in your account, no worries there. In tourist cabs you don’t find enough work, they don’t give duties correctly. Even if you get duties you don’t get the money immediately. You will get paid for today’s work three months later.

—Gajendra,1 Bengaluru (2016)

The rise and fall of incomes for Uber drivers has received attention because drivers, as informal sector workers, use their wealth through income to create personal forms of welfare. These cab driver’s work agreements are bereft of state- and firm-sponsored security and benefits. Their previous work experiences have mirrored this as well. That cash-strapped workers, with otherwise low-paying work options, earn well is the ingenuity of the platform economy: a puzzle to a country like India where multidimensional measurements of poverty take the paucity of incomes as a starting point. While income is vital to the informal sector worker, to create personal forms of welfare, the assurance of income is not protected. It is, in fact, meaningful to drivers that their payments are assured, as the driver above tells us. He (Gajendra) does not have to ask for a salary given that his income is digitally transferred into his bank account. Part of the ingenuity of the platform economy is that the digital tracks of work such as the automation of payments, actually streamline and organise aspects of work that give these workers the opportunity to avoid precarious economic decision-making.

If you [drive] for a family, they sometimes give you meals, there is usually less work but the payment is sometimes late and comes at the end of the month. It gets difficult waiting for the payment to come. I first tried Ola and in Ola, everyday we would get cash and spend it. You don’t know where the money goes. Then I tried Uber and I liked it. I get money every week in my bank and there are some cash payments. You can think about your day and your week and save.

— Manjunathan, Bengaluru (2016)

Current income(s) for the informal sector worker must take care of present consumption, future welfare and past debt. Lacking employment and job security—which precisely does that and assures workers of their present and future (income and work)—informal sector workers must manage their income across temporalities themselves. Platforms like Uber and Ola track work and automate their drivers’ earning intervals: payments are made weekly or daily rather than monthly and are received sometimes in cash or credited directly to the bank account. Thus, platform economies streamline temporalities of income, its management and security. Through such modes, they facilitate savings and spending. All of this has given drivers the ability to accumulate wealth, savings and investments during the medium-term period.

Digital Marketplaces and Work

Two elements of the platform economy have persisted over time, though much has changed since its inception in 2009. First is the self-propelling nature of digital marketplaces. The second is the impact on work. Digital marketplaces that facilitate the matching of demand and supply are agile, capable of adapting to the needs of the hyperlocal market of the street and neighbourhood. This agility extends to how work is organised on the Uber or Ola platform. The basis of this work is the algorithm which minutely maps and matches where drivers are required, affording them a better chance at a seamless and organised work experience than other options before them. The algorithm which matches the supply of drivers with the demand from riders also creates processes and protocols for drivers, which builds efficiencies into the ways their work is tracked and into how they are paid. Systems that are otherwise unorganised and disparate within traditional taxi transport configurations have been reconfigured. This has eased a degree of precarity from the work experiences of taxi drivers.

While this is the case, the easing of precarity itself does not come in the way of new tech companies offering full-time employment to drivers. The platform economy’s labour model treats drivers as micro-entrepreneurs and not employees. This mirrors the conditions of informal sector work, where most workers are self-employed or have own account enterprises. Drivers continue to remain unprotected from untimely dismissals; neither do they have security of payment over the long term, nor the safety net of “retirement.”

Formalisation and Personal Welfare

It is precisely for this reason that the platform-economy model has been heavily criticised in developed economies. In the United States, for example, “the Uberisation of work” implies the new flexibility of work that is moving away from a standard employment relationship of full-time, protected and continuous employment (Mason 2015; Allison 2014; Standing 1999; Tweedie 2013). The binary of employment in the Indian economy—of formal and informal work—is central to the furious debates that Uber has inspired in developed economies over the last five years.

In India, emerging commentary attempts to offer the flipside of what we see in debates in developed economies. Here, the platform economy is posited as a catalyst for structural change in the Indian economy. In this argument of reversals, Nandan Nilekani (2016) writes:

This platform aggregation will also lead to formalisation of the economy… [this] is a fascinating transformation underway in the informal economy in India. Once a taxi driver becomes part of Ola, then in fact he becomes part of the formal economy.

The “transformation” that Nilekani refers to, is of informal sector workers with loans to their names and incomes in formal banks (Padmanabhan 2016). “Formality” is in the banking channels used by informal sector workers. The object of fascination is the taxpaying taxi driver—now countable through his income and financial data—who is otherwise not easily traceable as someone part of the grey urban service economy. How informal sector workers use their income to buy cars to drive for Uber and Ola, an ostensibly new kind of spending, investment and borrowing, define the “formalisation” of the economy. Security, assurances of work and income, are not what constitute formalisation in this view.

Reports echo this view. The Economist constructs Ola and Uber cabs as the “light that will shine on the grey economy” (2016). Nilekani adds to this, “… a taxi driver … can use data, get a loan, buy a car and start paying taxes.” He is fascinated by drivers who, ostensibly for the first time, are splitting their income between their fiscal responsibilities as Indian citizens and personal uses. The platform economy is providing a break from the lasting view that the informal sector and its workers are “unregulated, untaxed and unloved” (Economist 2016).

The swift dismissal of welfare and benefits for workers, from the imagination of a formalising economy, leaves us with an uneasy truth. This commentary and its claims are based on ideas of efficiency, taxation and the reinvestment of workers’ wealth into productive work, because the informal sector here has “malign effects” undercutting the country’s economic success (Economist 2016). Recent commentaries, on the issue of formalising informal sector workers, tend to gloss over the core of the National Commission for Enterprises in the Unorganized Sector’s (NCEUS) definition of formality—which includes welfare, and benefits—that has, all the while, struggled to stay viable and be enforced upon both industry and workers in urban economies (Kannan and Papola 2007).

In 15 years of working as the head mechanic in a garment firm, my provident fund was 2.5 lakh rupees. What is 2.5 lakh rupees in 15 years! Here I can earn that much in two months.
That is why I left.

— Syed,Bengaluru (2016)

Platform Economy and Formalisation

The labour market for Uber and Ola drivers in Bengaluru is shaped by the urgencies for creating income security. Drivers forego the security of formal jobs, which offer long-term security of work and they opt instead for the quantum of income which helps them address and support their costs of living. Most drivers, being from villages with low agricultural output, find formal work options unviable, as they are faced with the immediate needs of living in cash-dependent cities. Primary research conducted in Bengaluru suggests that drivers—60% of those sampled—migrated to the city from districts which had declared drought conditions for 10 years out of the 16-year reference period. Informal, semi-skilled work with low barriers of entry—like driving—allows workers the option of manipulating flexible work options and the ability to switch between the most remunerative opportunities for work.

How relevant is a formal job as a signifier of security in the face of substantial intergenerational persistence in low-paying, low-skilled occupations? Legal and formal jobs available to drivers at their skill level in other sectors cannot accrue adequate social benefits that address and outweigh the costs of living in urban India (Motiram and Singh 2012). The technological efficiency and organisational capacity of platform economy companies are one example of how worker vulnerability can be mitigated and curtailed—especially in the context of high underemployment, low wages and skill barriers (to work) that confront most urban workers.

Algorithm-based work brings with it the systematisation of work experiences, automation of processes and an aspect of trust for drivers with regard to the payment for services, and their income. Drivers, who were previously paid in disparate and irregular intervals of time, now have an assurance that a faceless company for whom they drive will pay them with regularity. Text messages and app-based (mobile applications) push notifications convey the drivers’ income earned and deductibles. Drivers have a constant flow of information that is regular and consistent, waylaying the several anxieties of contract-less work.

However, to merely call this phenomenon “formal” when, in fact, it is workers mobilising flexibility and technologies to alleviate their vulnerability is to miss an opportunity to see how new technology can reorder the informal sector. Nilekani’s narrative undercuts how drivers address the lack of work and income security. In such a view, technology- or algorithm-based work goes unquestioned in how it coordinates economic activity, and in asking who powers the algorithm. Given how the urban service-based economy is particularly well placed to be digitised in this fashion, the algorithm-governing public life needs scrutiny.

Conclusions

Central and state governments have proposed bills and acts that seek to regulate these companies with a focus on taxes, the fees to be paid to the city and the drivers’ behaviour towards customers. Policy signalling is playing down labour laws, especially for start-ups in India (PTI 2016), and is attempting to create a “conducive” ecosystem that encourages tech-based businesses in India. Despite repeated strikes by Uber and Ola drivers in recent weeks (strikes took place in New Delhi, Hyderabad and Bengaluru in February 2017), there are no regulatory responses to how to govern these algorithms which directly construct the workers’ experiences of work, security and precarity.

The Uber driver has come a long way from Dev Anand’s Taxi Driver. He can now use platforms like Uber and Ola to continuously extract the full use value from his car and labour. This is the moment to rethink and reinvent our definitions of security and welfare, while considering what technology-based work can do for workers in an ever-changing economic landscape. As labour activists, legal scholars and academics in developing economies argue for new categories like the dependent contract, it becomes necessary that ideological and fiscal innovations grow in parallel to technological innovation (Weber 2015).

There is even talk of conceiving “portable benefits,” which are sponsored by an employer but are easily transferable and are not predicated on long-term employment within an organisation. There is an effort to accept the structural changes taking place in the economy and to build innovative solutions based on them. This kind of commentary reinforces how little the ideas of welfare and benefits play into what is considered formal or informal, given the ever-financialising economy of Indian cities. This is a moment for us to remember that technological innovations can be easily adapted to the needs of the Indian economy even if they were inspired and innovated elsewhere—to work not only for urban services, but for service providers; not only for growth but also for security.

Note

1 Drivers who were interviewed for this study in 2015–16 are represented here with changed names.

References

Allison (2014): Precarious Japan, Durham: Duke University.

Economist (2016): “Bringing Light to the Grey Economy,” 15 October, http://www.economist.com/news/international/21708675-new-technology-may-....

Kannan, K P and Trilok S Papola (2007): “Workers in the Informal Sector: Initiatives by India’s National Commission for Enterprises in the Unorganized Sector (NCEUS),” International Labour Review, Vol 146, Nos 3–4, pp 321–29.

Mason, Paul (2015): Post Capitalism: A Guide to Our Future, London: Allen Lane.

Motiram, S and Ashish Singh (2012): “How Close Does the Apple Fall to the Tree? Some Evidence on Intergenerational Occupational Mobility from India,” Economic & Political Weekly, Vol 4, No 7, 40, pp 56–65.

Nilekani, Nandan (2016): “An Alternative View of Future,” Product Nation, 27 June, http://pn.ispirt.in/an-alternate-view-of-the-future/.

Padmanabhan, Anil (2016): “Formalizing India’s Informal Economy,” LiveMint, 11 July, http://www.livemint.com/Opinion/4kxau3CejBat9uAIEakIKK/Formalizing-India....

PTI (2016): “Government Announces Labour Law Exemption for Starts-up for up to Three Years,” Economic Times, 9 March, http://economictimes.indiatimes.com/news/economy/policy/government-annou....

Standing, G (1999): “Global Feminisation through Flexible Labor: A Theme Revisited,” World Development, Vol 27, No 3, pp 583–602.

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Weber, L (2015): “What If There Were a New Type of Worker? Dependent Contractor,” Wall Street Journal, 28 January, https://www.wsj.com/articles/what-if-there-were-a-new-type-of-worker-dep....

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