78% of delivery gig workers earn less than Rs 2.5 lakh a year, just 66% pay taxes: Survey

A recent survey showed that around 78% of gig delivery workers, employed with food delivery apps like Swiggy, Zomato, and other apps like Amazon, earn less than Rs 2.50 lakh per annum. India’s gig economy in the delivery profession has seen significant transformation due to the emergence and growth of various service providers. 

The survey, conducted by Borzo (formerly WeFast), a global same-day delivery company,  took impressions from around 2,000 gig workers from Tier I and II cities, like Mumbai, Delhi, Bengaluru, Hyderabad, Jaipur, Ahmedabad, Kolkata, Chennai, Pune, Gurgaon, Noida, Lucknow, Indore, Chandigarh, Surat, Udaipur, Amritsar, Vadodara, Thane, Kanpur, Bhopal, Haridwar, Guwahati, Ghaziabad, Faridabad, Kanchipuram, Ludhiana and Tier 3 towns such as Pimpri Chinchwad, Raebareli, Kalyan, Chapra, Palghar, Kashipur, Nashik, Jalandhar, Baghpat, Saharanpur, Mohali, Nadiad, and Rohtak.

The survey, which covered over 2,000 workers employed by companies like Zomato, Swiggy, Uber, and Amazon across 40 cities, focuses on the financial challenges faced by these workers and their levels of tax awareness.

"As we focus on the gig economy, it's important to equip gig delivery workers with the knowledge and tools for effective financial planning. The debate surrounding minimum income for gig delivery workers points to the need for targeted education and support," says Eugene Panfilov, managing director of Borzo India.

Gig workers, also known as independent contractors, are individuals who undertake temporary or short-term work assignments, primarily within the service sector. It is important to note that these workers operate independently and are not regarded as employees of the organizations they provide services for. Consequently, they do not typically have access to common employee benefits that full-time staff members receive.

Tax matters

The survey findings highlighted a concerning lack of tax awareness among workers, with 61% admitting unfamiliarity with income tax brackets, leaving only 39% claiming awareness of their tax standing. Alarmingly, only 33.5% of gig workers have filed income tax returns, indicating a substantial 66.5% who have yet to fulfill this obligation.

Further analysis of tax return filers reveals that a significant majority, accounting for 66%, submit Zero (Nil) Returns, while the remaining 34% opt for Self-Assessment Returns. Additionally, the survey indicates that 47% of tax filers pay their taxes in regular instalments, contrasted with 53% who prefer a one-time payment.

Around 42% of non-ITR-filing respondents expressed a willingness to pay taxes if they fall into a tax bracket, but a larger 58% are unwilling to pay taxes even if they are supposed to.

Investment pattern

The recent survey delved into the investment practices of gig delivery workers, uncovering that a significant portion are not engaging in financial investments such as mutual funds or stocks. Specifically:

Mutual Funds: 77% of gig workers are not participating in mutual funds. Of the 23% who are, a majority (71%) are investing between Rs 500 and Rs 1,000 monthly.
Stocks: 74% of gig workers are steering clear of the stock market. Among the remaining 26% who are investing, almost half are inclined towards blue-chip stocks, while others are exploring IPOs or penny stocks.

Niti Aayog estimates that India has 7 million gig workers, and this number is expected to grow to 25 million by 2030, with an annual growth rate of nearly 12%.

Impressions last year

Last year, Borzo conducted a survey providing detailed insights into the lives of gig workers, including their motivations, education levels, communication preferences, satisfaction levels, lifestyle, hobbies, and interests. According to the report, 38% of gig workers have completed 12th standard, while 29% hold degrees in B.Com, B.A., or B.Sc. Some workers are currently pursuing higher education such as M.Sc or MCA, while others have discontinued their studies midway. The study also noted increased participation from gig partners in courses offered by Industrial Training Institutes (ITIs).

Furthermore, the report revealed that 57% of gig delivery workers hold another job in addition to performing deliveries, while 43% engage in deliveries as a full-time occupation. Additionally, the survey found that 36% of gig workers cited good earnings as the primary reason for staying in the delivery profession, while 10.5% valued the flexibility to log in and out as a key motivational factor.

It further stated that 56% of gig delivery partners collaborate with multiple service-oriented companies such as Blue Dart, Delhivery, Blinkit, Dunzo, Swiggy Instamart, and Big Basket. Despite the variety of platforms they work for, food and grocery items remain the most commonly delivered products. Interestingly, 32% of gig partners actually prefer the simplicity of delivering documents, citing it as an easier task to manage.

Furthermore, the report highlights that a significant portion of gig workers, constituting 56%, derive a high level of satisfaction from their work as delivery partners. They appreciate the versatility that comes with working for multiple apps and view it as a lucrative profession due to the promising earnings it offers.