Beyond the match: The potential of India's platform economy

India’s gig workforce is no longer a fringe phenomenon. It has become a fundamental pillar of our economy and the future of work. The Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025, promises the beginning of an ecosystem change. 

By conservative estimates, India’s gig and platform workers numbered 7.7 million in 2020-21 (NITI Aayog). That figure is expected to more than triple to 23.5 million within the next few years. Gig workers represent a sizable and growing labour force critical to India’s economic growth. 

These workers provide essential services—ride-hailing, delivery, home services, and logistics—forming the backbone of many urban and semi-urban economies. But beyond the numbers lies a deeper story: gig workers are entrepreneurs operating in a fluid market, trading traditional employment stability for flexibility and income opportunity. 

Building more than connections 

Gig workers are not a monolith; they come from all walks of life. Over 70% of DriveU’s driver-partners work part-time, using the platform to supplement income. With urban unemployment hovering around 9% in early 2025, gig work has become a flexible livelihood solution, enabling individuals to engage with the job market on their own terms. 

Notably, many drivers arrive in their own vehicles—an indicator of economic growth, highlighting efforts to move beyond informal labour toward entrepreneurial independence. Blue-collar workers hustle across multiple gig platforms to maximise income and maintain flexibility. Gig work offers them a way to stack earnings, manage irregular demand, and navigate economic uncertainty on their own terms. Gig platforms aren’t just labour marketplaces; they serve as pathways to economic mobility for a burgeoning and evolving workforce in a rapidly changing job market. 

Our experience shows that investing in worker welfare and transparent operations is not a cost but a growth driver. Drivers who understand their earning potential and trust the platform deliver better service, stay longer, and fuel the platform’s network effects. 

A strategic step in the right direction 

When the gig workforce swells to over 23 million, it will represent 4% of India’s labour force. Their earnings will drive consumption in local economies, fueling demand and GDP growth — making direct contributions to India’s march toward becoming the world’s third-largest economy. 

Karnataka’s ordinance breaks new ground in India, but it’s not the only game in town. Delhi’s policy leans more on cash transfers and skill-building, while Maharashtra focuses on registering workers and setting minimum wages. Overseas, places like the UK and Spain go further, classifying gig workers as employees with full benefits. Karnataka’s approach—using a welfare board and platform fees—strikes a middle ground, balancing interests and institutionalising social protections like insurance and income support. 

Implementation will be challenged by familiar hurdles—administration, compliance, and operational transparency—but this is a key step in recognising gig workers’ vulnerabilities and embedding social security into platform business models. It signals that platforms must take responsibility beyond matching supply and demand. 

Given the localised nature of gig work and the diversity across states in labour markets and infrastructure, welfare regulation is best managed as a state-driven mandate. This approach allows tailored policies that address specific regional challenges, making social protections more effective and relevant while supporting state-level economic development goals. 

The next step would be to tailor social security to fit the unique needs of India’s diverse gig workforce. Supporting infrastructure, like extended late-night transport, will enhance worker safety and platform efficiency. Insurance coverage, particularly for those facing high occupational risks, can ensure safety without placing financial strain. Transparent algorithms that clarify tasks and pay allocation build trust and empower workers. Skilling mechanisms ensure that our workforce evolves with the requirements of the changing jobs landscape, enabling them to contribute meaningfully to the economy. 

The long-term prosperity of the gig ecosystem depends on collaboration between government, platforms, and workers to create adaptable, balanced policies. This is the direction for India’s platform tech—and gig economy—to achieve its growth goals.

(Rahm Shastry is the Co-founder and CEO of DriveU.)