For generations, the sound of a doorbell in an Indian urban home often meant the arrival of the didi, the bai, the cook, or the cleaner—the unseen hands that keep the machinery of domestic life running. This workforce, overwhelmingly comprised of women from marginalized communities, has historically operated in the vast, unregulated shadows of the informal economy. Their work, though indispensable, was rarely recognized as “work” in the legal sense, leaving them vulnerable and without the protections afforded to formal sector employees.
Then came the digital disruption. With a few taps on a smartphone, one could now book a standardized, professional, and background-verified cleaning service, salon treatment, or plumbing repair. Platforms like Urban Company (formerly UrbanClap) stormed the scene, promising to organize this scattered sector, empower workers with better earnings and flexibility, and provide consumers with reliability.
However, this shiny veneer of gig-economy efficiency soon began to show cracks, revealing a complex and contentious relationship between technology, labour, and law. The recent protests and legal battles involving Urban Company and its “partners” are not just isolated incidents; they are a crucible for the future of labour law in India, forcing us to ask a fundamental question: In the age of the algorithm, who is a worker, and what are they owed?
This post delves into the traditional landscape of domestic labour in India, analyzes Urban Company’s disruptive model, and examines the contemporary legal challenges that highlight the urgent need for regulatory evolution.
The Historical Context: Labour In The Shadows
Domestic work in India is one of the country’s largest, yet most invisible, employment sectors. Traditionally, it has been characterized by a profound lack of legal recognition and protection. Domestic workers are largely excluded from the ambit of major labour legislations designed during the industrial era. Key laws such as the Factories Act, 1948, the Minimum Wages Act, 1948, and the Industrial Disputes Act, 1947, were built around the concept of a factory or a formal establishment, a framework that doesn’t fit the private household.
The relationship between a domestic worker and their employer is often intensely personal, informal, and feudal. It’s a space where contractual obligations are replaced by verbal agreements, and legal rights are substituted with paternalistic charity. This leaves workers susceptible to exploitation, including arbitrarily low wages, excessive working hours, no paid leave, and no social security benefits like pensions or health insurance.
While some states have enacted specific welfare schemes and the central government passed The Unorganised Workers’ Social Security Act, 2008, these have been largely ineffectual. The 2008 Act, for instance, focuses on formulating welfare schemes rather than bestowing enforceable, rights-based protections. The core problem remains: the legal system has struggled to formally define and regulate the unique employer-employee dynamic within the private sphere of a home, leaving millions of workers in a state of perpetual precarity.
The Aggregator Arrival: Urban Company’s Promise And Problem
Urban Company entered this landscape with a compelling proposition. It sought to professionalize domestic and personal care services through a digital platform, acting as a high-tech intermediary.
The Promises:
Market Access: The platform connects service providers to a vast customer base, eliminating the uncertainty of finding work through informal networks. Standardization and Skilling: It standardizes service quality and pricing, and invests in training and upskilling its partners, providing them with kits and know-how.
Flexibility and Earnings: The model promises workers the flexibility to choose their hours and location, with the potential for higher earnings than in the traditional informal market.
This model, however, is built on a crucial legal distinction. Urban Company classifies its service professionals not as employees but as “partners” or independent contractors. This classification is the cornerstone of the gig economy model globally and is central to the ongoing conflict. By designating them as partners, the company absolves itself of the statutory obligations that come with a formal employer-employee relationship, such as providing minimum wage, provident fund contributions, insurance, paid leave, and protections against unfair dismissal under the Industrial Disputes Act, 1947.
The critical legal question is whether this classification holds up to scrutiny. The courts traditionally use several tests to determine an employment relationship, with the “test of control” being paramount. Despite the label of “partner,” platforms like Urban Company exert significant control over their workers:
- They set the final price for services.
- They dictate service quality standards and protocols.
- They control the allocation of jobs and manage the entire customer interface.
- They levy high commissions (reportedly as high as 30-35%).
- They use an algorithmic rating and penalty system that can lead to workers being temporarily or permanently blocked from the platform—a modern-day equivalent of being fired.
This high degree of control strongly suggests a de facto employment relationship, even if the contract explicitly states otherwise. The “flexibility” offered is often illusory, as workers must maintain high acceptance rates and ratings to receive consistent work, forcing them to conform to the platform’s demands.
The Flashpoint: Protests, Lawsuits, And Legislative Stirrings
In late 2021, the simmering tensions boiled over. Hundreds of female beauticians—a significant segment of Urban Company’s workforce—staged protests in Delhi. Their grievances were manifold: exorbitant commissions, arbitrary changes to rate cards, penalties for cancellations, and the introduction of a new subscription model that required upfront payments to get leads. They argued that these policies were exploitative and unilaterally imposed, pushing their take-home earnings to unsustainable lows.
Supported by unions like the Indian Federation of App-based Transport Workers (IFAT), these workers took their fight to the courts. Their lawsuit seeks a declaration that they are “workmen” (or employees) under Indian law and are therefore entitled to the associated legal protections. This legal battle is a landmark case for the gig economy in India, mirroring similar struggles by Uber drivers in the UK and ride-sharing drivers in California, who have successfully argued for greater rights.
The controversy has also spurred legislative action. Recognizing the growing regulatory vacuum, the government of Rajasthan introduced the Platform Based Gig Workers (Registration and Welfare) Bill, 2023—the first of its kind in India. The bill aims to:
- Create a welfare board for gig workers.
- Establish a social security and welfare fund, financed by a cess on each transaction on the platform.
- Implement a centralized grievance redressal mechanism.
While a significant step, this bill focuses on welfare benefits rather than fundamentally altering the employment status of gig workers.
The Road Ahead: Reforming Labour Law For The Digital Age
The Urban Company saga exposes the inadequacy of India’s existing labour law framework, which is rooted in a binary understanding of work: you are either an “employee” or an “independent contractor.” The gig economy thrives in the grey area between these two categories.
The central government has attempted to address this with the new labour codes. Specifically, The Code on Social Security, 2020, for the first time, provides a legal definition for a “gig worker” and a “platform worker.” It makes them eligible for certain benefits like life and disability insurance, maternity benefits, and pensions.
However, this is a double-edged sword. While it grants recognition, it also risks formalizing a third category of workers with fewer rights than full-fledged employees. The provision of these benefits is not an automatic right but is dependent on schemes that the government will notify in the future. The core issues of fair wages, protection from arbitrary de-platforming, and the right to collectively bargain remain largely unaddressed.
Conclusion
The journey of domestic labour in India from the invisible confines of private homes to the algorithmically managed interfaces of apps like Urban Company is a story of progress and peril. These platforms have brought a degree of formalization, visibility, and market access to a historically neglected workforce. Yet, in doing so, they have created a new model of precarious work, cloaked in the language of partnership and flexibility.
The ongoing struggle of Urban Company’s partners is a microcosm of a global challenge: how do we adapt 20th-century labour laws to the realities of the 21st-century digital economy? The solution cannot be a simple return to old binaries. It requires a nuanced approach that acknowledges the unique nature of platform work while guaranteeing fundamental rights. The law must evolve to ensure that technological innovation serves to empower workers, not to create more sophisticated forms of exploitation. As courts and legislatures grapple with these questions, the future of millions of Indian workers hangs in the balance, waiting for the legal system to finally see and protect the unseen hand.
Author Name- Chetan Sharma, 3rd Year Law Student at Dr. B.R. Ambedkar National Law University, Sonepat
