75% Indian Gig Workers Face Financial Challenges

Entitled Solutions, a comprehensive ecosystem to enhance the well-being of blue-collar workers, has conducted a study in collaboration with BFA Global, an impact innovation firm on the financial well-being of low-income workers in India, with a specific emphasis on gig economy participants. The study aimed to identify the state of the financial health of delivery drivers, develop personas, and explore ways to improve their financial health. 

The survey focused on understanding indicators of financial health for the gig workers across four domains: Day to day management (alignment of expected income to expenses), Opportunities (ability to meet non-financial goals), Resilience (availability of meaningful reserves as a hedge against shocks), agency (retaining control while interacting with financial service providers). The study conducted over a two-month period, collected data over telephone interviews that lasted an average of 8-10 minutes. Around 60 per cent of the sample consisted of delivery riders and other 40 per cent of cab and auto drivers.

Among the key demographic insights, the average gig worker emerged as a 34-year-old male, earning INR 6,000 per week. All respondents in the sample were male, highlighting a major gender gap in delivery and driving related gig work opportunities. This is in line with overall trends reported nationally and globally. With regards to education, drivers are young and typically have completed only high school (42%), followed by some type of schooling (18%), college (18%), and diploma courses (12%).

The study provided a comparison between delivery drivers and auto/cab drivers. Delivery riders are younger and earn less than cab drivers. And although cab drivers earn more, they are also more stressed and lack behind in financial management and planning. While there is no difference in the overall financial health score, there are differences in the four dimensions considered. Delivery drivers score higher on day-to-day management and resilience, while auto/cab drivers score higher on opportunities and agency. 

The analysis resulted in the identification of three distinct personas or groups, each requiring targeted interventions for improved financial well-being. The first group comprises delivery drivers and high earners who can cover their financial needs, have debt and cushion, but also deal with stress. The second group consists of delivery drivers who suffer or have suffered from financial hardships but still believe they have control over their financial situation. Lastly, the third group is likely to include auto/cab drivers and low earners who plan their finances but often rely on charities and subsidies. This segmentation emphasized the need for tailored solutions to address the unique challenges faced by each group.

Recognising the diverse challenges faced by these different groups, tailored solutions are imperative. Delivery riders can benefit from flexible savings products, enhancing their overall financial health. Cab drivers, on the other hand, require financial education tools and management products to bolster savings and resilience to unexpected shocks. For those with low indebtedness and stress, micro-lending and flexible payment loans offer viable solutions. Introducing features like automatic deductions towards savings or emergency savings products proves beneficial for cab drivers. Additionally, focus on integration of financial health data with work history and employer information will enhance the precision in targeting products, ensuring a more effective approach to addressing the unique needs of each segment.

The study also proposes a comprehensive set of short and long-term recommendations such as continued measurement of financial health scores and the implementation of targeted interventions, such as automatic savings deductions and micro-lending for low-stress customers. Additionally, product-based solutions such as loans with flexible and automatic repayments options, gold-based savings products, EMI based motor vehicle insurance, etc. will work well for enhancing access to financial services. Furthermore, building the right habits are crucial for good financial health and since it is difficult to be disciplined with these habits when one’s finances are tight, tools such as financial literacy and reminders or alerts based on preset triggers might work. 

Anshul Khurana, Co-founder of Entitled Solutions said, “Entitled Solutions is proud to unveil this groundbreaking study, offering a deep dive into the financial health of gig workers in India. Our commitment to understanding the unique challenges faced by this dynamic workforce has led to invaluable insights that transcend mere statistics. This study not only reveals the diverse demographics of gig workers but, more importantly, identifies nuanced personas based on their financial health. By combining financial health data with work history and employer data, we aim to revolutionize how financial products are tailored for this segment, fostering long-term resilience and well-being. "

Ashirul Amin, Managing principal consultant and head of quantitative analytics practice at BFA Global, said, “This study highlights the need for financial health measurement to become an integral part of assessing gig workers’ needs and designing customized solutions that aim to maximize the benefits. We are grateful for the support and partnership offered by Entitled Solutions and aim to continue our close engagement to design financial products and services for the blue-collar economy.”