Gig workers deserve a better deal in cases of insolvency

India’s Insolvency and Bankruptcy Code (IBC) Amendment Bill, 2025, intends to iron out incongruities. However, it does not adequately address an important constituency: that of gig workers, who are currently classified as ‘operational creditors.’

- DEVENDRA MEHTA

India’s urban economy relies heavily on them. Delivery riders weave through traffic, couriers move parcels and drivers ferry passengers, all on behalf of digital platforms that call them ‘partners,’ yet treat them as anything but. If a platform collapses, gig workers may discover that their place in the insolvency queue is right at the end, far from that of formal employees.

That blind spot is turning more dangerous. By 2030, India may have 90 million gig workers. Their legal status remains ambiguous. In insolvency proceedings, they risk losing unpaid dues, incentives and social-security contributions. This is not just an ethical failure, but an economic hazard.

Deregulation in the developed world in the 1970s and 80s, combined with globalization and automation, accelerated the gig economy. America’s railroad workers, for example, still nominally permanent, were placed on call like gig workers. Truck drivers were reclassified as independent contractors, bearing fuel and maintenance costs while earning less than minimum wage.

Now automation and artificial intelligence (AI) are threatening gig jobs. Globally, robots are delivering pizzas and driverless cabs are on streets. The lesson from Britain's industrial revolution is sobering: wages for artisans collapsed for decades before recovering. India risks a similar depression.