India’s gig workers struggle to get by as COVID-19 ravages incomes

gig workers ola ridesharing
Photo by Phuong D. Nguyen |

COVID-19 has delivered an economic gut punch to gig workers in India who have seen incomes drop dramatically, according to a new survey that suggests that fintech apps could be key in helping them stay resilient for as long as it takes to get through the pandemic.

The survey – from global fintech (!) venture capital fund Flourish Ventures – says most Indian gig workers have seen incomes collapse during the pandemic. While most Indian gig workers earned over 25,000 rupees per month (approximately $340) before the pandemic, by August nearly nine in 10 were making less than $200 per month. More than a third of gig workers were making about $ 2.3 per day or less.

Indian gig workers have been relatively resilient, with 52% saying they were still able to cover their monthly expenses – but 47% said they could not cover their expenses for a month without borrowing money.

The survey found 44% of respondents have already borrowed money, 45% have cut consumption, 83% have used their savings, and 57% have acted on the loan moratorium to reduce or halt payments on their debts.

Meanwhile, for many gig workers, their biggest fear isn’t contracting the coronavirus, but earning a living – 61% of respondents were more concerned about their ability to work than access to basic needs (17%) or their family’s health (12%).

Government aid has alleviated some hardship – of those surveyed, 42% received food or financial aid from government COVID-19 relief. Those who did were over four times less likely to say they have lost hope. That said, the future seems bleak for most gig workers. While immediate cash flow was a moderate concern, at least 61% of respondents’ top concern was saving for old age or paying off debt.

Breaking the results down by sector and demographics, the report revealed that ridesharing drivers in India were hit hardest by the COVID-19 economy. Fully 90% reported a loss of income, compared to 72% of house cleaners. Because India’s digital gig economy is dominated by men, fewer women were surveyed. In Indonesia, female gig workers fared the same as men since the pandemic; in India women were more likely to lose income.

As in most countries, the pandemic has affected urban centers more severely than rural areas – and this may be even more pronounced in India. One house cleaner surveyed said, “I returned to my village. I am concerned about going back to Mumbai because everyone seems to have the disease there, but I don’t have an option because there’s no work here. We have to find a way to make money.”

Sources of resilience 

Compared with other countries surveyed by Flourish, India has provided more generous government aid. In addition to receiving government aid, 57% of workers surveyed temporarily halted payments on existing loans as part of the federal loan moratorium.

Indian gig workers also seemed to have a larger personal savings cushion than those in other countries. At least 83% have used savings to get through the crisis. In India, 52% of respondents said, if they lost their primary income, they could last at least a month without borrowing. In Brazil, Indonesia, and South Africa, less than 27% of respondents could say the same.

Flourish – which has also conducted gig economy surveysin Brazil, Indonesia and South Africa – naturally reckons that all this is an opportunity for fintech solutions that could help gig workers in India manage strained day-to-day cash flows, and better prepare for the future.

For a start, the firm says, workers are already digitally connected. A mobile app could aggregate all of a gig worker’s earnings derived from different sources and nudge workers to regularly put aside small amounts of money into a digital account for future use – such as for debt instalments. Digital platforms could also provide them with small ticket credit to purchase supplies, fill up fuel tanks or learn new skills when needed.

Flourish partnered with research firm 60 Decibels and local partners Avail Finance and Unitus Capital to conduct the online survey of 770 ridesharing drivers, delivery workers, and housecleaners using digital platforms was conducted in August 2020, as COVID-19 cases were surging across in India.

The full report is available here.

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