The Flash Points:

Labour
Inequality in India
1%The top 10% of the Indian population holds 77% of the total national wealth.
73% of the wealth generated in 2017 went to the richest 1%, while *670 million
Indians who comprise the poorest half of the population saw only a 1% increase
in their wealth.
63 MMany ordinary Indians are not able to access the health care they need. 63
million of them are pushed into poverty because of healthcare costs every year -
almost two people every second.
Income share
of top 1%
Inequality
• India has emerged among top countries with high
income and wealth inequality but the share of the
population living in multidimensional poverty fell from
25 to 15 per cent between 2015-16 and 2019-21 (UNDP)
• Between 2000 and 2022, per capita income soared from
$442 to $2,389.
• This persistent wealth divide is driven by various
factors. Globalization and technological advances have,
for example, created new opportunities for some groups
while leaving others behind. This typically results in the
owners of capital getting a greater share of
national income.
• Poverty remains persistently concentrated in states that
are home to 45 percent of the country’s population but
contain 62 percent of its poor.
• In addition, many other people are very vulnerable,
hovering just above the poverty line. The groups at
greater risk of falling back into poverty include women,
informal workers, and inter-state migrants.
• Women are only 23 percent of the labour force.
Uber: Is technology helping
labour?

•New Technology
• Internet, GPS, Computation capability
•Innovative applications
•Newer types of markets
•Implications on labour and wages
Newer Markets
• Aggregators
• Platforms
• Networks
• Uber (2010 in San Francisco by Travis Kalanick and Garrett Camp), Airbnb,
Urban company
• Super efficient with latest technologies and algorithm
• New types of participants
Uber: Basic questions
• Are the new technologies creating newer type of markets?
• Are they merely technology platforms or are they real-world
companies with the same responsibilities as transport
companies, hotels and employment agencies?
• Are the existing laws applicable to these newer market
participants?
• What is the impact on labour and their welfare?
• How should the laws be changed?
Newer technologies and
applications
• Platforms and Applications in the areas of
• finance,
• staffing,
• car sharing,
• accommodation and
• music and video streaming
• Estimated size of the market by 2025 is $335
billion
Features of New types of
companies/markets?
• Sharing economy, peer to peer economy, collaborative economy, on-demand
economy
• An economic model based on sharing underutilized assets from spaces to skills
for monetary or non-monetary benefits
• Trust in the online community, based on feedback
• Provides products and services without commit to ownership or hiring
• Reducing search costs significantly
• Reduces the use of raw materials and pollution in production and use
• Hold out a promise of increased sustainability and democratization of workplace
• Changes in basic norms about consumption, work and regulations
Problems
• Confusion about applicability of laws in cases of
• Accidents
• Sexual attack
• Labour rights and welfare – minimum wages,
insurance
• Following laws – local rules and regulations, tax
laws
Perception of different stakeholders
• Company
• Not responsible for local regulation like in the traditional taxi companies
• Driver partner, independent contractor, is responsible for
• Passenger safety.
• Transportation regulation
• Business taxes
• Only provides an online platform to connect customers to independent contractors
• Only a technology platform to provide users to find quickest pick-up time, highest quality
ride at lowest cost
• New technology is disruptive
• Hundreds of taxi drivers have switched
• There is competition in the business
• Uber drivers are pre-screened with commercial review of motor vehicle and criminal
records, but there are questions (10% failed the test)
Complaints of Local taxi companies
• Not level playing field – avoids airport charges, taxes and permit fees
• New companies' services are unfair, unregulated and unsafe and use their size and
the advantages gained by side-stepping local laws to drive traditional companies
out of business
• Devaluing government issued licenses
• Armies of lobbyists
• Using aggressive business practices to stifle competition and silence critics –
• bogus calls to order Lyft rides then cancelling,
• attempt to recruit the competitors’ drivers through incentive schemes, paying drivers
bonuses, distributing smartphones
• Using investors money to set prices low
• Old monopoly concerns are resurfacing
Regulators
• Uber has sidestepped regulations - refusal to give in to government orders and
requests in San Francisco, Portland, New York, France, London
• Refused to comply with demands to cease business, delay starting the operation,
capping number of drivers, delay services, disable certain features of the app
• Driver screening is not as good as fingerprint checks
• Traditional industry competitors are unable to compete. Cabs follow strict rules
• Stringent vehicle inspection
• Set fares monitored by standard meters
• Strict driver training and screening
• Pay permit fees, local business taxes,
• Must have commercial insurance
• Anti-competitive measures
Independent opinions
• Regulations are old and has not changed with time and newer technology
and markets
• Mostly have long served to reduce competition
• Left taxicabs at a disadvantage in competing with Uber
• Cities allow limited number of licenses, sometimes have created shortage
of cabs and inadequate service (reselling licenses)
• Lobby by company, drivers and customers
• May take time to catch up to the disruptive changes hitting transportation
industry
• Environmentalists feel “Ride-sharing” is a way to avoid traffic, pollution
Advantages of Uber Rides to Users
•Convenient – need not wait at the roadside
•Improves safety – can track driver easily
•Can look at the types of vehicles available
•Time to get the vehicle and their movements
•Fare estimated available before deciding
•Can check the rating of the driver
•Can automatically charge credit card
•Reduced hassles for users
•Functioning market for car-hire services that is governed largely by supply and
demand
But responsibility for any issues that arise during the journey needs to be determined
Issues
• Change in roles of stakeholders
• drivers feel that they are employees of the company as are treated as employees;
• give them same protection as traditional workers rather than considering them as independent contractors- wage guarantees, paid
overtime, unemployment insurance, health benefits and other benefits
• Study found drivers made between $16 to $ 30 an hour depending on the city they drove in. Some drivers claim after paying
expenses, they did not make the minimum wage. Demand minimum wage and regular breaks
• The company is involved in every aspects of the operation. By deeming the drivers as independent contractors, Uber is not
liable for paying for fuel, vehicle maintenance expenses, minimum hourly wages and benefits. Providing car services is Uber’s
main business and drivers are integral to tis service
• But, in a survey 87% of the drivers said the reason for joining Uber was to be my own boss and set my own schedule –half
worked less than 15 hours per week, 86% worked less than 35 hours.
• Gig economy may not be a good thing for workers or the economy. “For anybody who has to pay the bills and has a family,
having no labour protection and no job security is at best a mixed blessing”. “ At worst, it is a nightmare …” Former labour
secretary.
• Applicability of existing laws
• Need for new laws? New worker classification that meets the needs of the online economy and provides more protection for
workers?
• Dependent Contractors?
• Median wages stagnate while return to capital rise.
How significant are the issues?
• Technology companies are growing very fast
• Uber is in 300 cities, values at $60 billion twice the estimated value of
Hertz Car Rental, 1,60,000 drivers
• Intercontinental hotels tool 65 years to build 6,50,000 rooms in 100
countries; Airbnb did in 4 years
Accommodation-Regulatory and
Company
• Airports in San Francisco and Washington D C now allow Uber and others to
pick up passengers for a fee
• Feeling that new regulations are needed
• Ride- hailing companies tout their services as part of the solution for
improving cities – parking, car-free socializing, fewer drunk drivers on the
road, UberPOOL
• Are the crimes during on-demand services more than that of taxicab services
• Uber has added insurance coverage for drivers who are not yet carrying
passengers
• Everyone is still figuring out what that means