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From Platforms to Paychecks: Comparative Insights into Wages of Low-Skilled Platform and Nonplatform Workers in India
The rise of the gig economy and digital platforms has transformed labor markets globally, particularly in emerging economies like India. Platform work, often heralded for its flexibility and accessibility, has become a significant source of income for low-skilled workers, many of whom are excluded from traditional employment opportunities. We examine the wage disparities between platform and nonplatform workers in India, focusing on key determinants such as working hours, training, contract type, and sociodemographic characteristics. Using primary survey data collected from 400 low-skilled workers across delivery and taxi service sectors in Delhi between September and December 2022, we employ a multimethod approach, including linear regression and propensity score matching (PSM), to analyze the factors influencing daily and monthly earnings.
Training emerges as a key driver of wage enhancement among platform workers, underscoring the role of skill development in improving earnings potential. Yet, the absence of standard employment contracts and social protections continues to expose both platform and nonplatform workers to economic precarity. We also highlight the structural differences in wage determination mechanisms. Platform work offers earnings tied to task completion and algorithmic management, enabling higher returns for longer hours and efficient performance. Conversely, nonplatform employment operates within more rigid wage structures, limiting the scope for earnings growth by working more hours. Despite the higher earnings associated with platform work, the lack of benefits such as health insurance, pensions, and paid leave increases workers’ vulnerability, particularly in the absence of institutional safeguards.
Training emerges as a key driver of wage enhancement among platform workers, underscoring the role of skill development in improving earnings potential. Yet, the absence of standard employment contracts and social protections continues to expose both platform and nonplatform workers to economic precarity. We also highlight the structural differences in wage determination mechanisms. Platform work offers earnings tied to task completion and algorithmic management, enabling higher returns for longer hours and efficient performance. Conversely, nonplatform employment operates within more rigid wage structures, limiting the scope for earnings growth by working more hours. Despite the higher earnings associated with platform work, the lack of benefits such as health insurance, pensions, and paid leave increases workers’ vulnerability, particularly in the absence of institutional safeguards.
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