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A gig worker in India stands in front of a fruit stand

Helping India’s informal sector get back to work

Guest Author: Rahil Rangwala

“I do not have to serve anyone, I can be my own boss,” explained a driver for Blowhorn — an innovative logistics aggregator — with unmistakeable pride in his voice. Hearing his story two years ago, I was struck by the dignity and freedom he felt running his own business using the Blowhorn platform.

India’s informal sector accounts for 85 percent of its workforce and has been the engine of its growth. A huge part of this informal workforce is comprised of India’s gig economy workers, who see this type of work as a pathway out of poverty. These are contractual workers on app platforms, independent service providers, and on-call workers.

The effect of COVID-19 on the gig economy in India

The term gig economy itself gained popularity over the past five years, although Indians were familiar with the concept of ‘pay by task’ or ‘gig’ already. Dharavi in Mumbai, one of Asia’s largest slums, thrives on micro businesses like shoe stitching, cloth cutting or package delivery where one is paid by task.

Advancements in technology and access to communication allowed this workforce to look for more and better opportunities. While the opportunity to earn more money is a key draw to gig platforms, the step toward formality is an underlying theme we constantly hear from workers. The recognition that comes from a uniform and a badge cannot be underestimated. For many, it is the first step in the job market. For others, it is supplemental income. In times of COVID-19, gig workers took on the mantle of daily heroes, bringing us our necessities and ensuring last mile delivery of essential services.

Part of the work I do here in India at the Michael & Susan Dell Foundation is focused on gig workers and companies that work to improve livelihoods and incomes for India’s unorganized informal workers. The diversity of opportunity on some of our platforms heartens our team. Examples include:

  • LabourNet, one of the country’s largest informal skill training organizations, trains approximately 250,000 students a year in different skills and trades.
  • Workex is a recruiting platform that connects informal sector workers to jobs and opportunities at scale.
  • Intra-city logistics platform Blowhorn increased incomes of mini-truck drivers by 25 percent over one year by connecting these drivers to latent demand.
  • Kinara Capital, a lending company, increased incomes for micro entrepreneurs by 20 percent over one year by providing unsecured loans to support their businesses.

Tragically, one fallout from COVID-19 is that these informal workers, who have made so much progress in the last few years, are experiencing some of the worst income dips across India. The majority have seen their incomes cut in half or more, and others are receiving no income at all. Organizations and citizens are helping workers and their families stave off poverty in the immediate term, but there is still more to do to help them get back to work.

Be part of the solution

If you are an impact investor, a CSR foundation, or an investor, now is the time to work on collaborative frameworks and lead gig and MSME workers to get back to work. A proactive approach is needed for these small business champions who will be at the forefront of pulling us out of this economic crisis. To that end, we are partnering with a consortium of other funders on relief efforts for the gig and informal sector. This Road to Recovery initiative focuses on two funds aimed at relieving the economic burden for gig workers and small business owners. These funds are set up to leverage both commercial and philanthropic capital to maximize the impact of every dollar invested.

The challenge ahead is massive, and it will take all of us working together to rebuild livelihoods and infuse confidence in India’s gig worker: Industry, social sector organizations, philanthropy, and government. Through this united approach, there is no doubt we can bring the necessary resources to the table to help informal workers get back to work and reignite our economy.

If you have a request for funding that is related to COVID-19, please know that we are committed to fighting this pandemic and its subsequent economic fallout. Our immediate available funding has gone to accelerating the development of therapies, increasing the supply of PPE in Texas, stabilizing small business, and assisting our portfolio of current partners.