Why ONDC is magic for gig workers? ❤️

The insight most are missing.

Aug 09, 2023

Welcome to the 171st edition of the GrowthX Newsletter. Every Tuesday & Thursday I write a piece on startups & business growth. Today’s piece is going to 95,300+ operators & leaders from startups like Google, Stripe, Swiggy, Razorpay, CRED & more

In 2019, India had 68 lakh gig workers. By 2030, this will cross the 2 Cr mark. And with ONDC coming in the gig workforce will just have the biggest inflection point. This story talks about the core insight ✨

The origins 📝
It all started with cab aggregators (Ola/Uber) & food delivery apps (Swiggy/Zomato) onboarding delivery/driver partners back in the 2010s.

The idea was simple 💡
Don't have your workforce on the payroll. Pay as you go based on the work that they do & reduce the cost of service. This worked brilliantly in the US where if you owned a car - you could make a part-time income delivering food / a ride.

But, Indian market is different ⚡️
The workforce could not do part-time least for cab/aggregators if they didn't have yellow license plates cars. So it had to build full-time gig workers. No wonder, Ola/ Uber partnered with loan companies to build a supply of cabs.

The whole gig workforce will 4X, WHY? ⬇️

1/ Supply <> Demand mismatch 🥺
Only 36% of the working class population have full-time employment. We have more people who want to work than jobs in the economy. This creates lower wages for everyone - at least in the blue-collar economy.

2/ Migration to cities 🚂
Over 50 Cr Indians (35% of the population) live in urban India. Population density does not have enough employment density in these densely populated cities.

3/ Online platforms = razor thin margins 🪙
With extreme price sensitivity & little margin left, online platforms want to push the gig worker percentage to the upper limit, if they can. No wonder Zomato (2L), Swiggy (3L), and Urban Company (50K) employ over 5.5L gig workers.

4/ Gig worker onboarding is smooth 🧈
With Aadhar + UPI (India stack) to the rescue, anyone can onboard a gig worker without sharing a single piece of paper & can even get paid. Think of the whole stack as electricity for gig workers.

But, what's the inflection point? 🕹

ONDC - Open Network for Digital Commerce. It brings everyone at a single point. That means online platforms and gig workers can port themselves on a single rail road of consumer demand.

What changes for gig workers? 💙
Have you seen that Rapido bike taxi partner also delivering a Swiggy food order at the same time? Now, he/she doesn't have to be on two platforms to maximize their earnings.

What does this mean? 🤯
The current infrastructure relies on every online platform having its sweet onboarding for gig workers. This will go away. A single place for gig-worked to onboard right on the ONDC.

Why this is good for everyone? 🙇🏻
Think of the possibilities here - delivery partner ratings can now be ported across Zomato/Swiggy/other platforms. Same for cab drivers across cab aggregator platforms.

The partner history on ONDC is the magic ✨

Not just ratings but credit history will allow individual platforms to also lend with a better underwriting structure & even incentives for good behaviour across ONDC. I now understand why JUSPAY's Namma Yatri will be on ONDC ;)

Interesting times we live in 🇮🇳
Re-skilling the gig workers it the only thing stopping us.

We launched CRAFT on DD15 ❤️

CRAFT is designed to help leaders build proof of work across marketing, product, strategy & leadership. A total of 15 CRAFTS will launch in the next few months, helping GrowthX members scale their careers & companies.