Review: NCAER Study Finds That While Incomes Increased by Only 4%, Expenditure of Food Delivery Workers Increased by Over 20% in the Last Four Years - FACTLY
Sai Krishna Muthyanolla
September 21, 2023
Recently, the National Council of Applied Economic Research (NCAER) released a report on ‘the Socio-economic Impact Assessment of Food Delivery Platform Workers.’ The study is aimed at aiding policy by examining their working conditions, income stability, and overall well-being. The study was done using a telephone survey of 924 food delivery platform workers.
Food delivery partners have a significant impact on urban lives these days as they provide convenient access to a wide range of meals and deliver them right to our doorsteps. They have made it possible to enjoy meals at any time, offering a level of convenience previously unavailable. During the pandemic, especially amidst health concerns and social distancing measures, food delivery partners ensured access to food without the need to visit crowded restaurants or grocery stores. In short, food delivery partners have helped simplify our dining experiences and expanded our options, while also supporting the restaurant industry by increasing their reach and customer base.
Recently, the National Council of Applied Economic Research (NCAER) released a report on ‘the Socio-economic Impact Assessment of Food Delivery Platform Workers.’ Such a study aids in examining their working conditions, income stability, and overall well-being. The report provides insights into the socio-economic challenges and opportunities faced by this workforce, helping inform policies and initiatives aimed at improving their quality of life. For the study, NCAER conducted a telephone survey of 924 food delivery platform workers from one food delivery company spread across 28 cities with representation from all Tier 1, 2, and 3 cities. It was carried out in April and May 2022. Majority of the respondents were male (99%).
The average age of a food delivery worker was 29 years. 84% of the workers were under 35 years of age. While nearly 38% of the workers were at least graduates (or above), 93% had at least completed 10th standard. Almost 40% of Tier 2 city delivery workers were college graduates. While a large proportion of them were the sole or primary wage earners in their family, about 68.9% of the workers were non-migrants working in their hometowns. The share was 76% in Tier 3 Cities.
Platform delivery workers are more qualified and earn more than urban male workers
The study revealed that the average delivery worker was slightly older than urban youth but younger than urban workers. Moreover, the average delivery worker was better educated than the average urban male. While more than 93% of the food delivery workers had an education of class 10 and above, the share was only 55.7% among urban male workers and 62.8% among urban youth male workers. The food delivery platform worker on average worked 27.7% longer than the average urban youth male worker but earned 59.6% more income than him. However, after reducing the fuel costs, the increase in income is lowered to 5%.
The study examined why workers entered the food delivery platform and the entry requirements for the job to assess the impact of the platform on labour markets. There were people who joined the platform from diverse backgrounds and occupations, such as accountants, auto drivers, artisans, businessmen, cashiers, chefs, drivers, farmers, police, waiters, teachers, electricians, storekeepers, students, tailors, designers, photographers, painters, migrants from the Middle East, and others. About 21.2% of them were students. Among all the respondents, the platform was their first job for 23.8% of them, out of which 88% were students.
Higher or additional income was cited as reason by 7 out of 10 workers
Various reasons were cited as to why they joined the platform such as loss in business, lack of job opportunities, flexible work hours, regular payment receipts, salary in bank accounts, and independence. However, higher or additional income was the dominant reason for entering platform work as was cited by 67.7% of the respondents. Independence was the reason cited by more than 35% of those surveyed. More than 28% of the workers cited flexible work hours/days as a reason for joining the platform. Around 9% of them responded with ‘job loss’ as a reason for joining as against 31.6% of the respondents who were unemployed before joining the platform.
Growth in Expenditure outstripped growth in Incomes
In terms of shift duration, workers working for 11-hour slots were considered ‘long-shift workers’ and others were ‘short-shift’ workers who worked for 5 hours, on weekends, or on special days. The average daily hours worked by a long-shift worker in the sample was 10.8 hours and by a short-shift worker, it was 5.2 hours. Platform workers reported that real incomes had gone down over time, primarily due to inflation and increasing fuel costs. For long-shift workers, it had become harder to achieve targets due to increased traffic and rising competition. The ability to meet monthly expenditures out of the monthly incomes of long-shift workers had also dropped. Since 2019, their average monthly income grew by 4% while the expenditure on fuel increased by over 50% and other expenditures increased by 24%.
Attrition rates were quite high in food delivery platform work. The average duration of stay in the food delivery platform was only 14.1 months. However, approximately a third of the workers had no plans to leave the platform. Generally, people used this work not as a career option but as a fall-back option in times of need or for augmenting incomes. 28.1% have been working in such platforms for less than a year and 25.7% for 1-2 years, indicating that they joined during the pandemic. Meanwhile, 24.7% started before the pandemic, having worked for over two years.
Social security protection is low for platform delivery workers
While 100% of the workers had a task-based written contract in the food delivery platform sector, only 31% of the long-shift workers had a tenure-based written contract of more than one year in their previous job. They did not get paid leave or pensions. 61.9% of the workers received rations. Only 12.2% of the workers had an Ayushman Bharat card; 7.1% were registered on the e-Shram portal and 4% for the Atal Pension Yojana. This is a clear indication that the food delivery workers lacked social security protection.
Food delivery platforms have emerged as a source of social protection and employment for people who either lost their jobs, who were unemployed or for people to increase their income. Even students are getting the opportunity to earn income. It has also helped in formalizing the workforce by getting the workers to open bank accounts and provide accident insurance to them. Additionally, the workers are also given skills training such as dealing with customers, GPS, language, and communication.
However, there is poor growth in income and increasing expenditure. Despite this, there are many youngsters who have joined the work in the last 3 to 4 years. As seen previously, a large share of the workers are graduates and freshers to the workforce. It needs to be seen if this is a result of unemployment and limited job opportunities available to the youth.
Recommendations to ensure social security of the workers
Some of the policy recommendations put forth in the report aimed at ensuring social welfare and safety nets for platform workers are listed below.
Legislation passed by Rajasthan for gig workers
Questions related to the welfare of gig workers have been raised in the parliament multiple times. One of the questions frequently asked is the regulation of gig workers. The responses generally spoke of the Code on Social Security, 2020 that provides for the framing of suitable social security schemes for gig workers and platform workers on matters relating to life and disability cover, accident insurance, health and maternity benefits, old age protection, etc. The Code also provides for setting up a Social Security Fund and one of the sources of fund, is a contribution from aggregators between 1 to 2% of the annual turnover of an aggregator subject to the limit of 5% of the amount paid or payable by an aggregator to such workers.
Rajasthan government recently passed the Rajasthan Platform Based Gig Workers (Registration And Welfare) Bill, 2023 which calls for setting up of a welfare board in the State for gig workers. The Board also mandates maintaining a database of companies and workers, and each gig worker would receive a unique ID, valid indefinitely, and makes the aggregators accountable.