India's Gig Workforce: Charting A Distinct Regulatory Future

1. Introduction

India's gig workforce is projected to grow from 1 crore in 2024-25 to 2.35 crore by 2029-2030, with over 30.98 crore unorganised workers registering themselves over the e-Shram portal, including 3.37 lakh platform workers¹. The rise of gig and platform workers has turned the gig economy into one of the biggest drivers of flexible employment in India, especially in major cities like Mumbai and Bengaluru. It has reshaped traditional work structures that were once built around fixed-term contracts. Delivery-led unicorn start-ups, in particular, have grown at breakneck speed, employing lakhs of workers who serve as the operational backbone of these companies. While the gig economy offers a greater sense of freedom along with new sources of income, critics have been quick to point out concerns about the overall welfare of such workers. The objective of this article is to guide stakeholders through the evolving regulatory landscape and identify opportunities for compliant, sustainable engagement models.

2. Understanding the Platform Economy Workforce

The recently notified Social Security Code, 2020, defines a "gig worker" as a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship. The same Code defines "platform work" as a work arrangement outside of a traditional employer-employee relationship in which organizations or individuals use an online platform to access other organizations or individuals to solve specific problems or to provide specific services or any such other activities which may be notified by the Central Government, in exchange for payment and a "platform worker" has been defined as a person engaged in or undertaking Platform Work. An "aggregator" is defined as a digital intermediary or a marketplace for a buyer or user of a service to connect with the seller or the service provider.

The extant Indian labour and employment laws recognize three main categories of employees: government employees, employees in government-controlled Public Sector Undertakings, and private sector employees who may be managerial staff or workmen². Traditional employees enjoy comprehensive statutory protections that gig workers largely do not receive, such as minimum wages, hours of work, overtime, leave, and other protections, as compared to most traditional long-term employees. The gap in social security coverage is perhaps the most significant distinction between gig workers and traditional employees. Since gig workers are classified as independent contractors rather than employees, they are not entitled to regulated working hours or paid leave, even though many of them end up working full-time.

From the standpoint of delivery-led unicorn companies, the Code on Social Security, 2020, marks a major shift in India's labour welfare landscape, bringing greater clarity, consistency, and inclusivity to social protection norms across the workforce. The Code expands the coverage of the Employees' Provident Fund (EPF) to all establishments with twenty or more employees, regardless of the sector. For companies operating at scale, this creates a more streamlined and predictable compliance framework. It also ensures that a larger share of the workforce gains access to long-term social security benefits such as retirement savings. By resolving longstanding ambiguities around applicability, the Code is expected to reduce litigation and create a more stable regulatory environment for businesses. On the insurance front, the Code significantly enhances the reach of the Employees' State Insurance Corporation (ESIC). ESIC coverage, previously limited to notified areas, will now extend nationwide. The provision for voluntary ESIC enrolment for establishments with fewer than 10 employees, subject to mutual consent, adds flexibility for smaller partner establishments and franchise operations within the company's ecosystem. Importantly, for hazardous or life-threatening occupations, the Code removes the minimum threshold of ten workers. ESIC coverage becomes mandatory even if a single worker is engaged in such work. In addition, ESIC benefits can be extended to plantation workers where employers choose to opt in.

For delivery-led platforms that rely on a wide and distributed workforce, these provisions create a more consistent welfare backbone across different geographies.

3. Aggregator Compliance under the New Labour Laws

The four Labour Codes, 2020, collectively introduce a more structured and transparent regulatory framework for aggregators and platform-based delivery companies in India. For delivery-led unicorns, these Codes signal a shift toward greater accountability, improved worker welfare, and more standardised compliance obligations across states.

Under the Social Security Code, 2020, aggregators engaging gig and platform workers must meet key welfare and reporting obligations. These include contributing 1–2% of their annual turnover to a dedicated Social Security Fund that supports benefits such as health cover, accident insurance, disability protection, maternity support, and old-age security. Aggregators are also required to register all gig workers on their platforms and submit periodic data on worker engagement and payments, creating a more formal and accountable system across the sector. These requirements apply uniformly across all aggregator categories, including delivery, e-commerce logistics, mobility, and food delivery platforms.

Parallely, the Motor Vehicle Aggregator Guidelines of 2020³ require companies operating as aggregators to consider adopting the following best-practice guidelines to strengthen safety, welfare, and governance across their driver and delivery partner ecosystem. Each driver should ideally be covered by health insurance of at least INR 5 lakh and term insurance of at least INR 10 lakh, with both amounts benchmarked to 2020–21 and increased annually by around 5% to account for rising costs. Drivers should undergo an annual refresher training programme, with records maintained for at least a year, and any driver requiring remedial training may be temporarily off-boarded until completion. Aggregators are encouraged to maintain up-to-date digital records on SARATHI, including the driver's photograph, driving licence, residence proof, KYC-linked bank account, identity documents (Aadhaar/PAN/EIC), and emergency contact details of two family members. Drivers should be free to engage with multiple aggregators, provided all platforms follow consistent onboarding and training standards. To support safety and well-being, drivers are encouraged to take a mandatory 10-hour rest break after completing 12 hours of logged-in time in a calendar day. Upon cessation of engagement, drivers should return all equipment, IDs, and brand materials provided by the platform. Platforms may also promote a transparent rating ecosystem where both riders and drivers provide feedback based on their experience. Where a driver is required to undergo remedial training, completion of the programme should be ensured before reinstatement.

4. Government Initiatives: Building Infrastructure for Gig Worker Protection

The Indian government has taken significant steps to build an institutional framework for gig and platform worker welfare, beginning with the launch of the e-Shram portal in August 2021, which serves as a national database for unorganised workers. With over 30.68 crore registrations as of March 2025⁴, the portal issues a Universal Account Number (UAN) to enable easier access to welfare schemes. Registration trends show the widest uptake in Uttar Pradesh (8.38 crore), Bihar (2.97 crore) and West Bengal (2.64 crore). Complementing this, the Union Budget 2025 announced expanded coverage for gig workers, including a dedicated identity card initiative, strengthened e-Shram enrolment processes, and integration with PM Jan Arogya Yojana, offering ₹5 lakh annual health insurance per family⁵. These efforts build on successful 2024 pilots with major platforms such as Urban Company, Zomato, Blinkit, and Uncle Delivery. Despite the progress, only around 300,000 platform workers are currently registered compared with India's estimated 10 million-strong gig workforce, highlighting a substantial opportunity for platforms to support onboarding, streamline scheme integration, and bridge awareness and access gaps through collaborative implementation.

5. India's Gig Worker Framework: How It Compares Globally

India's gig and platform economy has expanded rapidly, prompting the introduction of a dedicated social security architecture under the Code on Social Security, 2020, which mandates aggregator contributions to a social security fund and formal recognition of gig and platform workers. When compared with global approaches, particularly the EU's protective directives, the UK's zero-hour contract framework, and California's AB5, India's regulatory landscape reflects a more social-security-led model rather than employment reclassification.

5.1. EU Directives: Predictability and Employment-like Protections

The EU's 2019 directives introduce a more structured approach to precarious work by expanding minimum employment rights to cover gig, casual, and zero-hour workers. Key provisions include predictable scheduling and clearer terms of work, compensation for cancelled work, a codified definition of 'worker' to reduce misclassification and inclusion of new forms of work such as domestic, platform, and on-demand labour. Additionally, the EU platform workers directive, 2024 aims to correct the employment status of those who have been misclassified as self-employed, improve transparency and regulate the use of algorithms and data in taking decisions about platform workers, with platforms being obliged to inform workers about the use of algorithms and automated systems in decisions regarding their recruitment, their working conditions and their earnings, among other things⁶.

Comparison with India: While EU reforms move towards employment-like rights and protections, India retains a non-employee classification, focusing instead on social security benefits (insurance, welfare schemes) without altering the contractual nature of platform work; India's current framework intervenes less on day-to-day working conditions such as hours, shift predictability, or cancellation compensation.

5.2. UK Zero-Hour Contracts: Flexibility with Limited Security

In the UK, zero-hour contracts⁷ are flexible employment contracts that legally allow employers to offer work when it arises, without any guaranteed hours. For employers, the benefits include cost optimisation through variable labour deployment, the ability to scale workforce with seasonal demand and reduced long-term commitments. For workers, such benefits include maximum flexibility to accept or decline shifts, the ability to work multiple jobs and opportunities to gain entry into organisations.

Comparison with India: India's gig workers already experience zero-hour-like realities, high flexibility, multi-platform engagement, and on-demand work - but without statutory guardrails that the UK has introduced (for instance, certain protections for "workers" vs. "employees"). India's regulatory focus remains on welfare funds, accident insurance, and skill development, not on regulating flexibility, scheduling, or guaranteed hour mechanisms.

5.3. California's AB5: A Push Toward Reclassification

California's AB5 law takes a much stricter stance by applying the ABC test to determine whether gig workers are employees. Under the law, a worker is an independent contractor only if all three conditions are me: a) The worker is free from control of the hiring entity, b) They perform work outside the hiring entity's core business, and c) They operate an independent trade/business. Failure to meet these tests often results in gig workers being classified as employees, entitling them to minimum wage, overtime, paid leave, unemployment benefits, workers' compensation and unionisation rights.

Comparison with India: India diverges sharply from the AB5 model. Rather than focusing on employment determination, India's labour codes explicitly create a new worker category, i.e., gig and platform workers, outside the traditional employer-employee relationships. The Indian system, therefore, avoids reclassification debates and instead mandates platform/aggregator contributions (1–2% of turnover) toward a social security fund. This model blends flexibility with limited social protection, unlike AB5's rights-based employment framework.

While India has made notable progress in formalising protections for gig and platform workers, several gaps remain when compared with global benchmarks. Unlike the EU and the UK, India does not yet provide predictable work schedules, protections against sudden cancellation of work, or guaranteed minimum hours. Jurisdictions such as California, through laws like AB5, also offer stronger safeguards against worker misclassification - an area where India continues to evolve. Additionally, comprehensive collective bargaining rights and platform-specific dispute resolution systems remain underdeveloped in the Indian context.

At the same time, India is ahead of many global peers in certain foundational areas. It is among the earliest to recognise gig and platform workers as a distinct labour category and to introduce a nationwide, social-security-oriented framework tailored to these workers' needs. India has also innovated by creating a welfare funding mechanism that supports gig workers without compromising the operational flexibility that platforms rely on.

6. Conclusion: A Distinct Regulatory Path for India's Gig Economy

While the EU and California move toward stronger employment-like protections and clearer worker classification, and the UK refines flexible arrangements through zero-hour frameworks, India continues to forge a hybrid regulatory model. This approach allows delivery-led unicorns, ride-hailing apps, logistics marketplaces, and other digital platforms to retain the flexibility central to their business models, while overlaying a growing layer of social-security protections for gig and platform workers.

As the sector scales (driven by food delivery, mobility, hyperlocal services, and e-commerce logistics), India's regulatory task will be to strengthen protections around working conditions, income stability, and dispute resolution without diluting the flexibility valued by workers and platforms alike. The ongoing evolution of India's legal framework is laying the foundation for more sustainable and responsible engagement models. This moment also presents an opportunity for Indian platforms to pioneer global best practices in digital labour standards. Achieving this vision will require multi-stakeholder collaboration across government bodies, platforms, worker groups, and legal advisors to build a balanced, future-ready ecosystem.

Footnotes

1. Social Security Boost for India's Gig Workers, Press Information Bureau, August 30, 2025 available at doc2025830624501.pdf

2. Rangwala Rahil, "Startups Are Making the Global Gig Economy Bigger. But Can They Make It Better?" Standford Social Innovation Review, August 21, 2024 available at Gig Economy Startups Are Getting Bigger. But Can They Get Better?

3. Motor Vehicle Guidelines, 2020 available at: Motor Vehicle Aggregators27112020150046.pdf

4. Over 30.68 Crore Unorganised Workers Registered on e-Shram Portal; Women Constitute 53.68% of Registrations, 10^th March 2025 available at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2109828®=3⟨=2

5. Ayushman Bharat Pradhan Mantri Jan Arogya Yojana AB-PMJAY Services | National Government Services Portal

6. Gig Economy: How the EU Improves Platform Workers' Rights, available at Gig economy: how the EU improves platform workers' rights | Topics | European Parliament

7. Zero Hour Contracts – Guidance for Employers, available at Zero hours contracts: guidance for employers - GOV.UK

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