Politics
Powering The Gig Economy
The gig economy is becoming a welcome alternative to expensive and often monopolistic options for young urban professionals in India and the United States.
When 26-year-old Avantika Kukrety from Mumbai was researching postgraduate programs at U.S. universities during her admissions search, what also caught her eye was a startup called EnvoyNow. The on-demand food delivery service is run exclusively for college students by college students. Currently serving a few college campuses in the United States, the service provides meal delivery within a mile of campuses for a nominal charge. For Kukrety, the idea of students striving to make life simpler for other students while earning a quick buck was at once inclusive and an example of how the gig economy is changing the dynamics of peer-to-peer exchanges.
Dr Seema MadanDr Seema Madan, a physician based in Faridabad, a suburb near Delhi, travelled to Costa Rica and New York last month for a solo holiday. She chose an Airbnb over a traditional hotel in the capital city of San Jose. She says, “Not only was it the most viable option financially (She paid only $30 a day for her stay), but it felt that there was a host family waiting for me in a new country.”
The family, she stayed with gave her important travel tips and she ended up cooking an Indian meal for them in what turned out to be one of her best holiday memories.
Madan says: “In a stark comparison, for my stay in New York City, I chose a hotel and everything from service to treatment was below average. For me Airbnb and other sharing economy services like Uber and Ola are the new age answers for a lot of our everyday necessities.”
She reasons, “I would rather pay someone trying to work extra hard to earn the money they need than fill the pockets of the already rich.”
For many young urban professionals in the United States and India, the gig economy, in which an open source community allows easy sharing of goods and services, is increasingly becoming am urban alternative to expensive and often monopolistic economic options. Organizations are also opting to increasingly contract with independent workers for short-term engagements, notwithstanding the bad rap the practice has been drawing lately, including calls for regulation of fast growing businesses, such as Uber, Lyft, Airbnb, etc.
Dr Seema Madan’s Airbnb room in Costa Rica.Interestingly, though Indians are not culturally very receptive to the idea of using pre-owned goods or trusting a stranger enough to receive their services, in this new virtual human cloud platform that has created a global marketplace, the millennial generation is in a mood to embrace societal collaborations in its new version. While younger Indians are devising novel ways to incorporate the gig economy in their daily lives, another generation of Indians who travelled overseas for study or work, also discovered the idea of renting services, offering their skills for money, or using pre-owned goods, was especially beneficial.
Indian Americans are in many ways at the forefront of the gig economy. A study by the Kauffman Foundation reported that 33 percent of co-founders of technology start-ups in the United States since 2006 are Indians. Another 2014 study by Vivek Wadhwa, director of research at the Centre for Entrepreneurship and Research Commercialization at Duke University, found that Indians founded 15 percent of start-ups in Silicon Valley. The study also established that Indians comprised the largest immigrant group leading tech companies.
Indians are the single largest providers on online outsourcing services and freelance platforms, such as Upwork, Freelancer and Fiverr, accounting for almost a fifth of their traffic, ahead even of the United States, according to the traffic management engine Alexa.
Within India, ride hailing service Ola’s revenues are estimated at Rs 418 crores ($65 million) during the year ending March 2015. Last June, after Uber appointed a new India head, Amit Jain, who had worked on the U.S. based rental site rent.com, the company committed an investment of $1 billion in India. Clearly Indians are poised to play an outsized role in this new integrated system of trade and business.
A Price Water Coopers report estimates that the sharing economy, which was pegged at $15 billion in 2014, could grow to $335 billion by the year 2025. A study, titled The rise of the sharing economy: India landscape, published jointly by Ernst Young and Nasscom, concluded that the gig economy holds the promise of significantly enhancing job opportunities in India: “On demand technology platforms are creating a massive opportunity to employ delivery associates, data collectors and sales agents across different geographies within India…. It has also opened up vistas for self-employment for a lot of youngsters with ideas. The new entrepreneurs are in turn paving the way for an increased income for stakeholders too.”
Innovative companies are disrupting traditional businesses globally. Barqo in Netherlands allows people interested in sailing to boat share; UK based Accomable, started by Srin Madipalli, helps people with mobility problems find accessible hotels, vacation rentals and apartments.
Scores of other Indians are riding the new economy. In 2012, the same week that it acquired Instagram, Facebook snapped up San Francisco based Tagtile, a startup founded by IITians Abheek Anand and Soham Majumdar. Tagtile is a business loyalty app that allows consumers to earn incentives from tagged businesses.
Two University of California, Riverside, Indian American students Sultan Khan and Haasuth Sanka created an app Scholarly, touted as the Uber for tutors, which allows users to search for tutors in their area. The app won first place at the 2015 HackingEDU.
Jugnoo, an autorickshaw aggregating service has now expanded into meal services, as part of the company’s Fatafat app.
New Jersey based Kishore Gangji has launched Zip.in, an online supermarket in Indian cities, such as Hyderabad and Vizag. He says, “I envision making Zip.in a platform for small vendors to grow their business and plan to expand in more Tier 2 cities in India, which is also where the real potential for sharing economy lies.”
Today India boasts the world’s third largest number of start-ups. In July, Nitin Gadkari, Union Minister for Road Transport and Highways and Shipping, on a visit to Silicon Valley, invited Indian American professionals to launch innovative startups in key Indian sectors.
Last year, three Indian American startups were among those showcased before Pres Barack Obama during the White House Demo Day. These included San Francisco based Privahini Bradoo’s Blue Oak that recycles electronics and mobile phones. New York based Suma Reddy’s Waddle, a friend-to-friend discovery platform that helps identify best places nearby based on reviews and recommendations, and Michigan’s Ann Marie Sastry’s Sakti, which develops next-gen batteries to power everything from cars to computers.
Anupam Agarwal
A slew of gig entrepreneurs are revving up in India. A doorstep delivery car service called Revv, currently in four Indian cities, delivers a rental car to the door. It comes with a foldable electric scooter that fits in the boot of the car, which delivery executive use to return to their location. Anupam Aggarwal, co-founder of Revv, says that the company considered many concepts on how to get executives back in a cost-effective, eco-friendly way: “We toyed with ideas such as a bike mounted on top of the car or a truck delivering cars, but the foldable bikes turned out to be most innovative.”
While Uber has revolutionized mobility the world over by swiftly becoming the fastest growing startup in history, and its valuation is now pegged at $60 billion, off-shoots are introducing other novel approaches. Adding a touch of local Indian flavor to the gig economy is an auto ride app titled Jugnoo, which allows users to book autos.
Today with a fleet of 12,000 autos, Jugnoo operates in 30 cities across India. Nitish Singh, vice president of Jugnoo, says: “We are not just stopping at ride services, we look ourselves as local providers. So if you are in the city and need something we will provide.”
On how Indians are adapting to the gig economy, he says: “We thought of an underutilized infrastructure and how to increase the efficiency there. We then also diversified by asking the auto drivers to double up as delivery agents during their idle times. Indians are used to the idea of employing people for services and the new start-ups are streamlining the age old practices in a way.”
Vivek Khaitan, of Urban Clap: “Here micro entrepreneurs employ skilled workers, so the need was to give everyone a chance to work and grow independently.Vivek Khaitan spent years studying and working in consulting firms in California and New York and returned to India to launch Urban Clap, an online service marketplace. The platform allows individuals to hire everything from a plumber to a party planner. He says: “Gig economy will work as much for India as for the United States.
“During my years in the United States I noticed that one major difference between Indian and U.S. businesses is that in the U.S. even the micro entrepreneur was tech savvy and had a basic infrastructure. In India this is lacking. Here micro entrepreneurs employ skilled workers, so the need was to give everyone a chance to work and grow independently.”
However, this digital capitalism is running into conflict with labor laws and labor rights advocates. New York is weighing a bill that penalizes apartment owners and tenants from offering short term Airbnb stays. Uber is in a continuing battle with cities and taxi unions, both in India and the United States, and there are growing calls for regulating grey areas of the shared economy.
Nevertheless, a survey by the communications firm Burson-Marsteller, The Aspen Institute Future of Work Initiative, The Markle Foundation and TIME magazine found that 44 percent of U.S. adults have participated in some sort of gig economy transfers. According to the report, a majority of employers in America now use independent contractors, with 80 percent saying it enables them to adjust the size of the workforce, save money on benefits and tailor the worker to a specific cost. But enlighteningly, more than half of the surveyed firms felt that contingent workers are not as loyal or invested as employees. On the rising concerns on the ambiguous areas of work contractors, nearly 70 percent of those surveyed said that a social contract, whereby benefits, such as health and retirement plans that are available to full time employees, should be be extended to contract workers. Security and safety concerns have also been raised around proper background checks of drivers on online auto services, such as Uber, for example.
Nitish Singh of Jugnoo, however, terms these apprehensions as teething troubles for consumers: “Whenever there is a new experience, there is bound to be some resistance. This has happened in the past too. When people are confronted with something new it takes a while before the idea becomes mainstream.”
Major Prashant Rai of OTG247.com, a Bengaluru based service aggregator, which provides concierge services, background verifications and bodyguard servicesBut in recognition of these concerns, reputed online service providers are adopting precautions, such as background checks, police verification, etc. Major Prashant Rai of OTG247.com, a Bengaluru based service aggregator, says since it was launched in September 2015 OTG247 has provided concierge services, background verifications and bodyguard services for U.S. clients. He says, “If trust and quality were found lacking we wouldn’t have been approached by American clients.”
The shared economy is tailor made for India’s expanding city population. Vij says, “As we grow, acquisition of assets will become more difficult. I was inspired by the infrastructure in growing cities, such as Singapore, where despite the rapid development, there are measures to check over usage of resources. From popularity of public transport to congestion charges, everything is being structured to ensure that the burgeoning growth does not deplete the quality of life.”
Pushpinder Singh, CEO, Travel Khana, a food delivery service that provides homecooked food for travellers on the Indian Railways, says: “All you have to do is choose from an array of options ranging from local delicacies of the area you are passing by or a homecook’s food and order it via the app. The food will be delivered to you at the next station.”
Singh who has lived in the United States, says the market opportunities are everywhere: “In 2007, I was at John F Kennedy airport (in New York) and there was a panel that could connect you to car rental companies. When I tried using it, none of it worked and that made me think that there is a big gap between technology and its streamlining. We are trying to bring that streamlined approach while providing vocation to home cooks who may have otherwise not found a medium to earn what they deserve.”
Vishal Jagetia founded Allizwel to help college students engage with the sharing economy.
Sakshi Vij, founder of Mylescar.com, a car rental service introduced in India in 2013, says:“We researched and found that in India every year 2.5-2.6 million cars are getting added. This also meant that Indians were making a commitment of around $11 billion to support that number. This didn’t seem a logical and we thought of introducing the concept of renting cars so that there isoptimal utilization of existing cars.”
Vij says: “While in the United States, Enterprise, Rent a Car, etc. have been around for decades, it was about time to bring it in India where we have been used to the idea of being driven in taxis.”
The shared economy is tailor made for India’s expanding city population. Vij says, “As we grow, acquisition of assets will become more difficult. I was inspired by the infrastructure in growing cities, such as Singapore, where despite the rapid development, there are measures to check over usage of resources. From popularity of public transport to congestion charges, everything is being structured to ensure that the burgeoning growth does not deplete the quality of life.”
The gig economy still constitutes a tiny sliver of the global economy, but with ideas as sweet as Zaarly, which allows one to order a homemade pie, to Lending Club, which enables people to shop for better interest rates on home or auto loans, its disruptive potential has just begun.