April 19, 2024

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Business Life

In India’s coronavirus-hit economy, on-demand startups have it the worst

As Covid-19 rips through the world, gig economy workers are emerging as key back-office operatives while also being the most exposed.

In India, many offices have mandated work-from-home and the government has temporarily shut down malls, gyms, and other public places. But the millions of workers who drive cabs, deliver food, and provide repair or salon services at home are still out and about.

While exposure for some of these workers can be limited, it’s not an option for most. For instance, food delivery apps Zomato and Swiggy have launched contactless payments and deliveries to reduce their executives’ face-to-face interactions, but an Uber or Ola driver has to drive around different passengers, and a salon technician from Urban Company has to attend to clients directly in their homes.

“One key thing is to make the clients comfortable that they are doing everything in their control and the client is safe,” Yugal Joshi, vice-president of Texas-based consultancy Everest Group, told Quartz. “Otherwise social distancing will ensure that clients in their fear stop taking these services. That will be bad for these firms as well as the individuals (gig workers).”

Companies that operate with gig workers have issued guidelines to prevent the spread of Covid-19. However, is the ground reality really in their control?

Health emergency to financial crisis

Urban Company, which provides at-home services such as salon services and home repairs, has mandated its gig workers to wash hands multiple times, and use sanitiser and masks while providing services, Himanshu Arora, vice-president of partner safety and success at the company, told Quartz. “We are also monitoring compliance of the usage of masks by doing quality audits on a randomised set of cases,” he added.

At least two customers who used the service in the last week, though, told Quartz their workers arrived without masks.

Uber and Ola did not share details of how they may be leveraging tech tools yet but the scope for it exists, experts say.

“Maybe there is a role for sensors in the cars that can gauge the recency of disinfectant and thermal scanner to check on driver,” said Joshi of Everest Group. “Mobile camera of driver may help them monitor the symptoms of driver. Drivers may be asked to upload videos everyday and artificial intelligence algorithms can check for symptoms.”

In the absence of such checks, though, companies are mostly relying on self-reportage. For example, Ola has teams available 24×7 for any concerns. “We encourage everyone to proactively report any instance that may be symptomatic for us to help action and guide appropriately,” a spokesperson said in a statement.

This system is far from foolproof.

Toeing the line

The on-demand industry has already started seeing fewer takers. For instance, there is around 50% drop in on-demand taxi rides since the last week, Tanveer Pasha, president of Ola, Taxiforsure and Uber(OTU) Drivers and Owners Association, told the Business Today on March 13.

Already these drivers struggle to make money after footing huge loan payments, insurance bills, and fuel costs. Now, their livelihoods are being put even more in jeopardy. Fear of being infected has already driven 5% of Bengaluru drivers working for ride-hailing platforms to leave for their hometowns, TechSci’s Sukriti Seth told Quartz. Meanwhile, others worry about losing their jobs if they’re caught with the virus.

“The real danger is that once a service professional has symptoms, but they are dependent on daily work to keep earning, they are incentivised to suppress those symptoms and not report them,” public policy consultant and columnist Prasanto K Roy told Quartz. “The platforms must figure out a way to keep that person earning at some minimal level, while protecting itself against abuse of that provision.”

Gig workers rarely have insurance and employment benefits. Companies could help by deferring EMI payments for vehicles, doling out future income and clearing past dues, independent startup sector analyst Harish HV says. The firms could also offer micro insurance for three to six months, Vidhyashankar, head of corporate development at the IT services company Ninestars Technologies, suggests.

Uber, for instance, has said it will temporarily suspend the accounts of drivers isolating due to a suspected or confirmed Covid-19 condition, but will provide financial assistance for up to 14 days until April 6, 2020, when the situation will be reassessed. Ola and Urban Company did not offer monetary compensations at the time of publishing.

There are concerns now that things may become worse if the Indian government has to announce a complete lockdown.

“Now the question arises that would (these companies) accept prohibited operating zones and limit their operations?” Seth questions. If yes, then how will they support millions?

We’ll have to wait and see.


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