Independent Research and Policy Advocacy

The financial lives of platform workers: A diaries study in Bengaluru, India

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Mobile app-based platforms have become ubiquitous in urban India in recent years. The Indian government’s apex public policy think-tank, NITI Aayog, attributes this to the combined effect of rapid urbanization and increased adoption of smartphones and associated technology by people. India currently has about 7.7 million platform workers, which is expected to rise to 24 million by 2030 (NITI Aayog, 2022). Even as this number is increasing, thereby creating employment opportunities for millions of young working adults, there are growing protests by platform workers, both in India and globally, demanding better working conditions, higher, stable, and transparent earnings, and basic social security.

Given this context, it is imperative to understand and document the nature of platform work and how it shapes the financial and non-financial lives of platform workers. However, studying platform workers is challenging due to the limited availability of datasets documenting their demographic, social, and economic profiles. The datasets that do exist often club platform workers under the larger umbrella of unorganized or informal workers. This could be misleading as the nature of work and the lives of platform workers look very different from other informal workers, say a casual labourer or a street vendor. Therefore, researchers from varied disciplines are increasingly studying platform workers to build evidence of how the platform economy shapes their lives. However, Dvara Research’s review of this expanding field of literature on gig workers (Chatterjee et al, 2021) shows a gap with very few studies documenting and analyzing their financial lives.

The study intends to fill this important gap in literature by exploring the financial lives of platform workers and finding answers to the following questions: do platform workers face volatility in their income and expenses, i.e., how much do they earn and spend and how much do their earnings and expenditures vary on a day-to-day basis; how long do they work to earn as much as they would like to; whether and where they save and borrow; what strategies do they adopt to manage their money to meet their day-to-day expenses, raise lump-sums, deal with and recover from shocks; what social protection benefits do they have access to; what their financial goals are; and what barriers exist, if at all, in their pursuit of those goals. Their motivation to join platform work, and the future they see for themselves and their families, are also explored.

A mixed methodology approach was adopted for primary data collection in Bengaluru, a metropolitan city in Karnataka, India, in 2022. The data collection exercise was executed in two stages: qualitative data collection in the form of Focus Group Discussions (FGDs) and personal interviews, followed by quantitative data collection through baseline surveys and financial diaries.

It is important to first understand the nature of platform economy to make sense of the experiences and financial lives of platform workers. Platforms leverage technology to serve as intermediaries in a multisided market that includes customers demanding specific products and services, vendors supplying those products and services, and platform workers supplying their labour to deliver these products and services from the vendors to the customers. Platforms depend on positive network externalities emerging from this multi-sided market to stay economically viable and eventually become profitable. This requires them to onboard a critical mass of customers, vendors, and platform workers. As platforms surpass this critical mass, workers, vendors, and customers increasingly become dependent on these platforms. With no alternative but to depend on platforms for access to the market, they become price acceptors, thereby creating an atmosphere for platforms to grow to become monopsonies in the labour market and monopolies in the commodity market respectively (ILO, 2022) and gain the bargaining viii power to set the terms and conditions for these market interactions. For the platform workers, platforms emerging as monopsonies in the labour market can have negative effects such as reduced earnings and increased costs and risks (Dube et al, 2020).

When platforms entered the market in India, they onboarded a critical mass of platform workers by promising erstwhile blue-collar, informal workers an escape from their exploitative and underpaying workplaces and an opportunity to earn more, while enjoying autonomy and flexibility over their work. They also onboarded a critical mass of customers and vendors by providing attractive discounts, offers, and pricing. They also acquired non-platform companies and smaller platforms operating in the same segment to add to this pool of workers, vendors, and customers. As a result, a few big platforms were able to surpass this critical mass of customers, vendors, and platform workers, and grow to become monopsonies in the labour market and monopolies in the commodity market. For the platform workers, platforms emerging as monopsonies has led to reduced earnings and retracted benefits, leaving them to bear most of the costs and risks associated with platform work. Workers now find it challenging to sustain such costs and maintain their household finances and have to resort to taking loans more frequently than they can set aside savings.

Platforms, by virtue of being monopsonist, also have the power to design the payment structure in a way that compels workers to stay available and seek tasks for long hours. Platforms achieve this by designing the conditional payments called incentives in a way that makes it a substantial component of workers’ potential earnings and then requires workers to fulfil a set of eligibility criteria – including the number of hours logged and number of tasks completed – to qualify to earn incentives. Often left with no choice but to maximize their earnings, platform workers set out to fulfil these criteria and earn incentives. However, despite their best efforts to fulfil the eligibility requirements, they do not always manage to earn incentives. This is because of volatility in the number of tasks assigned to them, caused by an ever-expanding pool of platform workers and fluctuating customer demand. This forces them to constantly stay hyper-vigilant and compete for jobs with fellow workers, adding further to their physical and mental stress, and exacerbating their day-to-day income volatility.

With no other alternative except platform work that promises them higher and more stable earnings, they regularly switch between platforms but continue to work in the platform economy for the time being, remaining underemployed and earning less than what they require and what they can. But many consider platform work as unsustainable in the long run and have set goals for their future outside the platform economy. Having experienced some degree of flexibility and autonomy in platform work notwithstanding the many terms and conditions, these have become non-negotiable features in their future career plans, and hence, they are not willing to get back to their earlier, non-platform, blue-collar jobs, especially when they are unsure if those jobs will pay as much. Therefore, most of them have set self-employment as the next step in their career path but they find it difficult to work actively towards reaching those goals, given the day-to-day challenges of their work and money management.

Despite the many challenges faced in and complaints about platform work, workers continue – and aspiring workers flock – to work in the platform economy because there is a lack of alternative employment avenues currently in the Indian labour market guaranteeing them comparable earnings for their level of education and skills. On average, participants earned an average of INR 35,075 on average, which after accounting for their work-related expenses of INR 18,470, amounted to a net income of INR 16,604. Their families earned an overall monthly income of INR 33,580 and incurred a monthly expenditure of INR 21,300 on average, placing their households between the 60th and 80th percentile of India’s urban households. Therefore, they are among the better earning urban Indian households on average. However, platform workers and their households are heterogeneous, and even in the study’s ix small sample, households were distributed across the income distribution of urban Indian households, with 32 percent of the participant households falling in the poorest two quintiles and 41 percent of the participants falling in the topmost quintile.

This study has brought forth the many intricacies in the financial lives of platform workers along with a rich detailing of their experience dealing with financial and psychological vulnerability. Considering that this study was primarily based in Bengaluru among a small sample of largely male workers, further research could expand the sample size, particularly by speaking to more women working across a range of platforms, to document the specific opportunities and challenges they face while undertaking platform work. A deeper and longitudinal investigation will be useful to assess the long-term psychological impact of working as a platform worker. A study of newly launched, publicly facilitated platforms will be beneficial to move towards articulating features of an ‘ideal platform’ that can help workers while remaining commercially viable. It is also important to check whether these new platforms have been able to affect the monopsonist and monopolistic status enjoyed by platforms, thereby also solving or addressing some of the issues of platform workers. Platforms and governments alike are being responsive to some of the demands of platform workers by announcing a slew of insurance schemes and enacting social protection legislations. A study on these measures and their efficacies will be useful to understand their effect on worker well-being and propose ways in which they can be improved. Insights from the study on the money management strategies adopted and financial behaviour exhibited by platform workers can inform practitioners in their design of financial products and processes that better suit the context and needs of platform workers. Finally, the study has documented the state of social security of platform workers in terms of access to insurance and other long-term savings products. Further research is required to understand the challenges platform workers face in accessing and using social security schemes provided by the government.

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  1. This made interesting and informative reading. Thank you. Inevitably, the mind ran a comparison with the Indian context even while the note managed to clearly convey how complex this whole thing is (health care!). Plenty of things to learn and seek to adapt to our circumstances. our health infra, information infrastructure, dispersed low-density population pocket etc plus lack of citizen friendly information communication on insurance policies. Frankly, the standard insurance policy document I’ve received in the normal course seems designed to make a person ill! I’m fairly sure, that institutions like yours are on top of all this and working to move things along in India with good researched basis – like this paper.

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