PremiumIt would be wrong to dismiss platform-based home and beauty services provider Urban Company’s industry-first decision to issue stock options to its gig workers – the company calls them partners – as a mere PR exercise.
Undoubtedly, the urgent need to repair its image probably speeded the decision. After all, the $2 billion company had hit the headlines for all the wrong seasons towards the end of last year, when several women “partners" who work for its salon and spa services verticals agitated outside the company’s Gurugram headquarters, protesting against work conditions and what they termed an unfair service policy agreement which they feared would hit their earnings. In fact, Urban Company had scored another industry first at the time – a dubious one – for actually suing its workers. The company had sought an injunction from the court restraining the women from holding any “demonstration, dharna, rally, gherao, peace march, shouting slogans, entering or assembling on or near the office premises."
A couple of months earlier too, hundreds of its gig workers had protested demanding safer and better work conditions, social security benefits, and a roll-back of the increased commission it charged from the workers for booking assignments. In fact, after the October protests, Urban Company had promised to revisit its policies. In a blog post, it said, “We are not perfect, and acknowledge that we might have made mistakes in our journey so far. In the coming weeks, we will be announcing some important programmes which we believe will further enhance earnings and wellbeing of our partner ecosystem." The revisions ended up triggering the second set of protests.
In fact, as a result of the protests, Urban Company, which in 2020 was rated the best platform in India for gig workers with a score of 7 out of 10 on Fairwork’s five principles of fair pay, fair conditions, fair contracts, fair management, and fair representation – fell five spots, despite lowest ranked Ola and Uber scoring zero!
Nevertheless, the decision to award stock options to gig workers marks an important milestone in India’s – indeed, the world’s – gig workforce landscape. Urban Company’s ‘Partner Stock Ownership Plan’ for its service providers is not only a first for India but the world. The company has promised to award stocks worth ₹150 crore “at practically no cost" to its over 35,000 and counting army of service partners over the next 5-7 years, with a first tranche of ₹75 crore worth of stock to be vested over the next 3-4 years.
It's a milestone because not only does this provide a genuine upside to the people who have actually helped drive the company’s valuation to $2.3 billion – the service providers – but also addresses an important definitional problem dogging the space.
The issue is whether these gig workers are mere workers, without even the minimum protection for informal workers provided under Indian laws, with no job security, social security, health or retiral benefits, or, as the platforms insist, ‘micro entrepreneurs’ who are actually better off than their non digitally-connected brethren in the physical world, whom these platforms are giving the opportunity to earn twice or thrice what they would if they were to simply offer their labour in the unorganized marketplace.
The service partners are clear – they want to be recognized for what they are – workers – and want minimum guarantees on wages, social security and health benefits. A public interest litigation by the Indian Federation of App-based Transport Workers (IFAT) has asked the courts to rule that gig workers should be considered as unorganized workers and be brought under the ambit of the Unorganized Workers’ Social Security Act.
The government appears to be leaning towards this view, with finance minister Nirmala Sitharaman announcing the extension of social security benefits to gig workers in her 2021 Budget speech. While this is yet to be implemented, the government has launched the e-Shram portal where platform workers can register themselves.
This is something the industry is set against, arguing that it goes against the fundamental principles of their business models. They also argue that the very reason that such services have boomed – as of last year, the gig worker base stood at some 15 million and accounted for 56% of all new jobs created in the economy – was the flexibility to work on their own terms and time, and the potential to earn much more than what would have been possible on their own.
Urban Company’s stock options plan opens up a new way of looking at these workers who are the essential building blocks of India’s exploding service economy – not as mere workers, nor as farcical ‘entrepreneurs’, but as co-creators rightfully entitled to a share of the wealth they are helping to create.
It is something for other platforms, most of which have fared poorly in Fairwork India’s report on labour standards in India’s gig economy, to think about.
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