There have been significant developments in India’s policy approach to the gig economy in recent times — from the acknowledgement of gig workers as a class in the Code on Social Security, 2020 to Rajasthan’s Platform Based Gig Workers (Registration and Welfare) Act, 2023.
The Rajasthan Bill proposes establishing a welfare board for gig workers, responsible for registering workers and aggregators and administering welfare schemes. It mandates a welfare fund financed through contributions from the state government and aggregators, a central transaction information and management system, and guarantees gig workers various rights, including registration with the state government, access to social security schemes, and representation on the board. This legislative effort has now inspired similar initiatives in Jharkhand, Karnataka and Telangana.
Most efforts, however, have primarily focused on constructing social security nets and establishing grievance redressal mechanisms, stopping short of addressing the fundamental inequality at the heart of gig work: The functioning of the app itself. Digital platforms are not neutral intermediaries but powerful systems that function as private regulatory regimes, mediating every aspect of a worker’s labour. The app’s design and underlying algorithms effectively set the terms for each interaction between workers, platforms, and consumers, and it is this algorithmic inequality that we must resolve.
Current legislative efforts, including Jharkhand’s recent attempt to address worker grievances, fail to correct the fundamental power imbalances baked into platform design. These imbalances manifest through a triad of interrelated issues: Information asymmetry, algorithmic opacity, and exploitative gamification.
At the foundation lies information asymmetry. Platforms strategically withhold crucial data from workers, undermining their ability to make informed decisions. For instance, gig drivers are often only privy to pick-up locations when offered a trip, left in the dark about destinations and potential earnings. This puts drivers in a difficult position: They either call riders to inquire about the drop location and potentially cancel, leading to rider frustration, or accept trips blindly, risking disappointment with the compensation. This deliberate obfuscation creates inefficiencies and frustrations for both drivers and riders, serving only the platforms’ interests by maximising the number of drivers on the road. More critically, it strips workers of agency, compelling them to accept economically unviable tasks.
This asymmetry is further entrenched by algorithmic opacity. The black-box nature of decision-making algorithms that govern task allocation and pricing remains largely unregulated. Algorithms could potentially implement discriminatory task distribution systems that disadvantage specific groups of independent workers. Without legally mandated transparency, there’s no way to ensure fairness or even detect potential discrimination. This opacity not only perpetuates information asymmetry but also creates a system where workers’ livelihoods are shaped by invisible and unaccountable forces.
The combination of information asymmetry and algorithmic opacity creates fertile ground for exploitative gamification. Armed with vast troves of worker behaviour data, platforms deploy sophisticated techniques to maximise labour extraction. They dangle tantalising bonus targets before workers, promising significant rewards for meeting certain thresholds. However, without regulations governing these gamified systems, platforms can calibrate these targets to be just beyond what’s feasible for most drivers, yet seemingly attainable enough to exploit workers’ hopes for financial gain.
This triad of issues forms a self-reinforcing cycle. The information asymmetry feeds opaque algorithms, which, in turn, enables more effective gamification strategies. These gamified elements then incentivise behaviours that generate more data for the platforms, further deepening the information asymmetry. Breaking this cycle requires a holistic approach to regulation that addresses all three aspects simultaneously.
What might such regulation look like? It could start with Clause 14 of the draft Karnataka Bill which mandates transparency in declaring the parameters which determine work allotment, the rating system, and the categorisation of gig workers. We must go beyond this however and mandate real-time transparency in trip information, requiring platforms to provide complete details, including estimated earnings and drop-off locations, before drivers accept a job, would empower workers to make informed decisions about their labour.
We must also scrutinise bonus structures and incentive systems. Platforms should be required to disclose data on the feasibility of bonus targets and prohibited from employing manipulative practices that make these targets artificially difficult to achieve. This would help level the playing field between workers and platforms, reducing the exploitation of cognitive biases and information asymmetries.
Regular, independent audits of platform algorithms should be mandated to ensure fair task allocation and prevent discrimination. These audits will shed light on the often-opaque decision-making processes that govern workers’ access to jobs and earnings, ensuring that the playing field is truly level.
Finally, we must recognise data as a key resource in the digital economy and ensure that workers have rights to their own data. Gig workers should have access not only to their individual data but also to select aggregate platform data. This would help balance the stark information asymmetries that currently tilt the scales in favour of platforms, enabling workers to make more informed decisions about when and how to work.
The apps that facilitate gig work must not be understood as mere tools; they are the new factories of the digital age. Just as we once recognised the need to regulate industrial working conditions, we must now step up to the challenge of ensuring fairness in the algorithmic workplaces of the 21st century. By turning our regulatory gaze to digital platforms, we can ensure that this new world of work doesn’t come at the cost of worker dignity and security and can address the root causes of precarity and build a more equitable digital economy.
Vineet John Samuel is a doctoral fellow at the Hertie School, Berlin. The views expressed are personal
