NANDINI VAIDYANATHAN elaborates on factors contributing to a downward spiral in a gig economy and what can be done to fix it
I am sure the number pandits will troll me for this title as in terms of the size
of the gig economy, its rate of growth YoY, the volume of growth, its contribution to GDP and the employment it generates all indicate that it is a very sunrise industry. So why am I saying it is floundering? When we do a deep dive into the industry, you will see that from the industry and economy point of view, it is indeed thriving; but in terms of customer experience it has begun its downward spiral. In this column, let’s understand this contradiction, the factors contributing to it and what we can do to fix it.
1. What is a gig economy?
The term gig is expressive and contains all the answers. According to dictionary.com, a gig is a word borrowed from the music industry which referred to a single engagement of either an individual musician or a band, for one show. In 2009, a journalist called Tina Brown first used the term ‘gig economy’ to refer to the trend of workers engaging in temporary, freelance and part-time ‘work’ in the knowledge economy, facilitated by digital technology. The phrase was catchy, evocative and it stuck. In this sense, a gig work was the opposite of ‘employment’. The worker did not have a structured employment contract that outlined his title, responsibility, working hours, reporting relationships, code of conduct and salary. A gig worker chose the unstructured ‘partner contract’ which gave him the flexibility to choose when he wanted to work, how many hours he would work, what kind of work he would do and a ‘payment rate’ for each gig was agreed upon with the company onboarding gig workers. Of course, there was a code of conduct and penal clauses for breach of it, but the hold that the organization has in terms of enforcing it is far looser than over an employee. The rise of the gig economy was a result of the push from the corporate sector to reduce costs without impacting rapid scalability and the pull from the workers to get away from corporate stress induced by long working hours, low pay and a severely impacted work-life balance.
The rapid advancement in digital technology not only provided impetus for growth but opened opportunities for servicing conventional businesses in new-age formats. For example, you could order and pay for meals of your choice from the restaurant of your choice to your doorstep with maybe four clicks on your mobile app and a gig genie would magically arrive before the food got cold. You forgot the ravioli you cooked for a go-dutch party at home, but hey no worries. Set up Porter to pick up, bring it to you and save you the embarrassment. You don’t want to drive to your friend’s party because you know you will drink, so book a cab to fetch you home. The biggest players of the gig economy, so far, since its inception in 2010 in India, have been transportation, food, groceries, spa, salon and maintenance services, logistics and ecommerce.
The size of the gig economy and its growth are mind-staggering. In 2020-21, there were 7.7 million gig workers in India which is expected to touch 23 million in the next five years. It has grown with a CAGR of 17 percent YoY, generating a volume of $455 billion. It has a mix of low, medium and high-skilled jobs and is obviously fueled by the number of internet subscribers (936 million) and smart phone users (650 million).
2. Why is it creating unhappy customers?
My guess is, the fact that the gig economy is unstructured is what creates a dent in customer experience. My opinion is anecdatal − that is, evidence gathered from anecdotes from my own life, my network and my observation both as a customer and as an avid economy watcher. I have been using digital platforms for the longest time to run our family. I don’t know when I last went to a mall or a store to buy stuff. Everything we need to live through the day is purchased via apps only.
The gig economy, right now, is shouldered by workers. In other words, people. Not drones yet (drones may fix some of the problems we face today but we don’t know yet what new problems it may create). The gig economy model was embraced by organizations to reduce costs of employment even as their footprint across markets expanded. The money saved here and more was invested in infrastructure that could meet the demand of rapid market acceleration. By simply providing a uniform to the gig workers, the organizations have expected the quality of service promised to their customers to be delivered. In a rush for building head count, there is a serious compromise of quality of product training, niceties of customer engagement and simple agency of their jobs. And by agency I mean ownership of their delivery.
How can a cab service even permit an option to its drivers to cancel an airport drop at 3 am, fifteen minutes before arrival? How can a company send a masseuse for body massage with overgrown nails and calloused palm? How can an ecommerce company disown responsibility for wrong product delivery (blaming it on the vendor)?
Extremely poor communication, item theft, misbehaving with customers, delays in delivery, poor packaging, and a blinkered approach to what is expected of them (my job is to deliver, if the package is broken it is not my responsibility, take it up with the company) − all this gives me the feeling that there is very little investment going into training of gig workers, monitoring their performance and constantly engaging with them to take ownership of the last mile delivery keeping in mind the brand image of the organization.
The icing on the cake was my interaction with a gig worker last week who delivered 45 minutes later than what was promised on the app. When I pointed it out to him, he said in Hindi, I didn’t commit time to you and people who did, sit in the office and know nothing about traffic! When I told him that the app used GPS to estimate the time, his reply was funny, if it were not pathetic. He said GPS is made in America and they don’t know anything about traffic in India! What surprised me was the arrogance of his ridiculous replies, and not for a moment was he contrite, apologetic or even soft. I gave this feedback to the helpdesk and the response was the standard monotone: we are sorry for the inconvenience! So the company is tacitly encouraging poor customer service by not fixing poor attitude.
I haven’t yet figured out whether items are stolen at the dark hub itself or in transit. But the number of times we have missing items is so ridiculously high that it has become de rigeur in our home now to check every delivery against the bill! And not all helpdesk interactions are smooth for getting the refund/missing item! I remember when we were in Dehradun, every time I ordered cooking oil (5 litre can costing `1200 bucks) it would go missing and I would spend the rest of the day chasing customer support whose ridiculous response used to be: we have not been able to talk to the delivery person!
The number of players today promising to deliver everything in under 15 minutes – from wedding sarees to laptops − has gone up and will continue to grow till market demands course correction. But given the pathetic state of service delivery in today’s gig economy, should we not pause to fix the problems first?
3. What are the problems of the gig economy?
Here’s a list of some pressing ones thatrequire immediate attention:
• Poor hiring practices
• Absence of background checks
• Absence of regular, intense, reinforced and consistent training in product and customer service
• Unregulated payment and welfare benefits
• Absence of regulatory framework
• Effective and immediate monitoring of service delivery and corrective action for breach, with clear definition of those breaches which are non-negotiable, even the first time
• Incentivizing gig workers to take agency to improve their performance
• Creating a support structure for the gig workers
• Treating them not as an appendix but as an integral part of the company structure
In other words, there is a huge chasm between organization and gig workers leading to dissatisfied gig workers leading to their unsatisfactory service delivery leading to customer disenchantment leading to possibly threatening the very foundation of the gig economy. To download an app and become a customer, it takes several clicks and more than a few minutes. To uninstall the app, it is one click and a micro second!
