Inside Labouradda’s plan to provide work for India’s 437M unorganized labor force
There are 437 million unorganized laborers in India, making up 94% of the workforce. The daunting task of connecting the enormous unorganized workforce with employers is exactly what Labouradda is in the process of doing.
They tell me that in India the organized labor sector is one that is incorporated with the appropriate authority or government and follow its rules and regulations. This organized sector, which makes up only 6% of the workforce (28 million) is related to business, government, and industries involving large-scale operations.
On the otherhand, the unorganized labor sector can be understood as the sector, which is not incorporated with the government and thus, no rules are required to be followed. The unorganized sector includes small scale operations, petty trade, and private businesses.
Starting with their home state of Uttar Pradesh (UP), which in-and-of-itself has over 200 million inhabitants, Labouradda is tackling an issue that no one else is attempting in the country.
The Indian startup was recognized by Prime Minister Modi as “a coordinator between supply and demand.”
The founders tell me that 90-95% of the Indian laborer population does not have a smartphone, so using mobile apps can be a challenge for those looking for work to connect with potential employers.
What Labouradda has done is ingeniously create a platform to connect laborers with the nearest employer that answers the problem of how to connect a smartphone user (employer) to the nearest non-smartphone user (laborer).
The Indian startup created a call center to bridge this gap; the breakdown of which goes like this:
- A digital platform enabling ‘Round the clock’ connectivity between consumers and the nearest available Laborer (Aadhaar card holding)- 24X7, 365 days.
- Laborers are registered with Labouradda at $2.00/month subscription fee and are then forwarded
- Consumers drop in their requirements (leads) to Labouradda via its call center or app, which is then forwarded to the registered labourers by Labouradda.
Already, Labouradda has registered over 10,000 Aadhar Card-holding laborers, and the founding trio is just getting started.
This year the Indian startup partnered with 10 cities in UP and will reach 25 by the end of March, 2019 with plans to cover 50 towns in the following financial year.
In the next 3-5 years, they will look to conquer all of India before expanding into Nepal, Pakistan, the UAE, and countries in Africa.
The founders tell me that they are currently facing two main challenges in their pursuit of growth:
- Connectivity – Right now the turnaround time on their call center and database platform is two hours, which can be improved.
- Building Trust – How can employers know that they are hiring the right people for the job?
The next step, the founders say, is to wait for the provincial governments to provide registrations of the laborers. Once this is in place, it will be all downhill to connect workers with employers.
The Unorganized Labor Problem in India
For unorganized laborers in India, many travel long distances from rural villages to find work in the bigger cities. They stand around in designated areas for four hours every morning hoping that an employer will come by to tap them for a day’s work.
“In every city across every state, there is a large segment of farmers, who come to nearby cities as daily wagers looking for employment at labour markets that operates for only four hours in a day,” the founders say.
More than 40% of these laborers go “unemployed” daily, resulting in millions of dollars lost across the country, everyday. Even after 70 years of Independence, the labor market in India, is largely unorganized and is able to offer only 12 – 15 days of employability.
8 Key Differences Between Organized and Unorganized Labor Sector
1. The organized Sector is a sector where the employment terms are fixed and regular, and the employees get assured work. The unorganized sector is one where the employment terms are not fixed and regular, as well as the enterprises, are not registered with the government.
2. The government rules are strictly followed in the organized sector, which is not in the case of unorganized sector.
3. In organized sector, the employees draw regular monthly salaries. On the other hand, in the unorganized sector, the workers are paid on a daily basis.
4. Job security exists in the organized sector, but not in the unorganized sector.
5. The organized sector, provide additional remuneration to employees for overtime. Conversely, there is no such provision for overtime in case of the unorganized sector.
6. In the organized sector, the salaries of employees are as per government norms. In contrast to an unorganized sector where wages are below, what is prescribed by the government.
7. In organized sectors, workers get a hike on salary, once in a while. As opposed to an unorganized sector where the salaries or workers are rarely hiked.
8. Employees get add-on benefits like medical facilities, pension, leave travel compensation, etc. in the organized sector, which is not provided to the employees working in unorganized sector.
It was with these stark contrasts between organized and unorganized labor that Labouradda was born.
Incubated at iCreate
Over the summer I met with iCreate incubator Founding Director and Chief Mentor Parag Amin at the Horasis India Meeting in Malaga, Spain, who filled me in on all the innovative projects iCreate was supporting, and Labouradda was one startup with huge ambition.
iCreate is an independent center and facilitates “Next Generation Entrepreneurship” that blends creativity, innovation, engineering, product design and leverages emerging technologies to evolve out-of-the-box applications.
The primary goal of the Center is to create a large quantity of quality entrepreneurs. Towards this objective, it aims to seed a new ethos wherein people will understand and encourage entrepreneurship as a preferred career option. The Center also engages with the Indian government to help evolve enabling policies.
“iCreate was very supportive of us,” said the Labouradda founders, adding, “whatever mentoring we needed, they provided support.”
For Labouradda, iCreate provided mentorship, working spaces, and Seed funding during the one-year incubation period.
“iCreate helps any entrepreneur, and they understood the scalability of our project,” the Labouradda founders praised.
Labouradda is committed to the “Digital India” and “Skill India” initiatives by the Indian Government.
Inspirited by these fundamental initiatives, Labouradda has launched a novel Mobile Optimized APP, that will enable direct communication between the consumer and the daily wage laborer, round the clock, and free of the limitations of time and location.
The Indian startup aims to resolve issues such as the communication gap and the unavailability and unreliability for the consumers while at the same time increasing the demand, hours, days and value of employability for the daily wage earners.