Inflation, Algorithms, and Real Wage Compression: Evidence from India’s Gig Delivery Workforce

The Indian gig economy has seen exponential growth, with trajectory-based estimates putting the number of active gig workers above 12 million around the 2025-2026 fiscal year. However, this structural reorientation towards informalized, algorithmically controlled labor conceals an escalating crisis of real wage erosion. The impact of retail inflation and its resultant increase of living costs on the effective earnings of Indian location-based short, quickcommerce, and delivery type gig workers. The cumulative increase in the costs of essential commodities, primarily fuel, food, and rent in urban localities, has significantly impaired the purchasing power of the workers, against the backdrop of India’s higher macroeconomic stability and inflation headline moderation following the post-pandemic inflation peak. Using a combined macro-micro framework, this paper argues that policy must shift from nominal earnings discourse to a transparent real-wage architecture. It assesses cumulative CPIindexed minimum per-task earnings, mobility compensation indexed to fuel, paid waiting-time rules, and social-security contributions that are portable. The central conclusion is that, without inflation-indexed wage floors and algorithmic accountability, India’s gig economy will continue to generate employment volume while producing income insecurity and urban precarity.