If you thought the gig economy was a Western phenomenon confined to Deliveroo riders and Uber drivers, think again. A new start-up in Delhi is now offering a service that would make a City trader chuckle: hire a ‘bag carrier’ to lug your shopping through the chaotic streets of the Indian capital. It is a vivid illustration of how the labour model we have perfected in the UK is being exported to emerging markets with even less regulatory baggage. And for those of us obsessed with the bottom line, it raises a troubling question: are we exporting precarity as fast as we export capital?
The platform, which I shall refrain from naming for fear of giving it free publicity, connects customers with workers willing to carry groceries, parcels, or even designer bags for a few rupees per kilometre. It is Uber for your arms. The pitch is simple: why waste your energy when someone else can do it for a pittance? The market, apparently, agrees. Reports suggest the app has seen thousands of downloads in its first week. This is the gig economy stripped to its bare essentials: a digital marketplace for manual labour, with no fixed hours, no benefits, and no union.
Now, let me be clear. I am no socialist. I believe in efficient markets and the power of price signals. But there is a fine line between efficiency and exploitation. The gig economy in Britain has already hollowed out the traditional employment contract. According to the Office for National Statistics, around 4.4 million people now work in the gig economy, many earning below the minimum wage once costs are factored in. Gilt yields may be stable for now, but the long-term fiscal risk is mounting: fewer national insurance contributions, lower tax receipts, and a growing army of workers without pension provisions. That is a ticking time bomb for the Treasury.
Exporting this model to India, where labour protections are even thinner, is a logical step for venture capital seeking higher returns. But it is also a race to the bottom. The Bank of England has fretted about the productivity puzzle for years. Paying someone to carry your shopping does not improve productivity; it merely shifts the burden onto the poorest. Capital flight from developed economies to low-wage havens is nothing new, but the digital platform makes it instantaneous and invisible.
The sceptic in me wonders why any rational government would allow this to proliferate. The Indian authorities are currently grappling with inflation and a widening current account deficit. Allowing a service that commoditises human labour at rock-bottom prices does not solve those problems. It may even exacerbate them by depressing wage expectations across the board. The Reserve Bank of India should take note: if the gig economy grows unchecked, it could undermine formal employment and, by extension, tax revenues and social stability.
Back in London, the Financial Conduct Authority is still debating how to regulate buy-now-pay-later schemes. Meanwhile, the gig economy continues to operate in a regulatory vacuum. The Treasury could step in, but that would require a level of fiscal intervention that goes against the current orthodoxy. So we are left with a paradox: we celebrate market efficiency while ignoring the social costs that will eventually come due.
As an analyst, I see this as a canary in the coal mine. The Delhibag carriers are a harbinger of a future where labour is atomised, devalued, and ultimately disposable. Investors may cheer the low unit costs, but they should also factor in the political risk. When the backlash comes, and it will, the regulatory pendulum will swing hard. Those who have built their business models on regulatory arbitrage will find themselves exposed.
For now, the markets are silent. Gilt yields remain low, and the FTSE 100 marches on. But I cannot shake the feeling that we are sowing the seeds of the next crisis. The gig economy is not just a labour market innovation; it is a fiscal time bomb. And it is ticking louder than ever from the streets of Delhi to the boardrooms of London.
