Abstract

This case chronicles the evolution and challenges faced by LabourNet, an organization that was conceptualized as a social enterprise to create and enhance income opportunities for workers in the Indian urban informal sector, workers who are typically poor, exploited, and disenfranchised. LabourNet endeavored to establish linkages between informal sector labourers and potential employers through an Internet-based portal and cellular phones, bringing about efficiency in the search process as well as reducing the role of intermediaries who typically exploited the labourers and reduced their share of wages. Realizing that informal sector labourers were mostly migrants from rural India who did not possess any proof of identity or social security, LabourNet worked with banks and insurance companies to provide the registered labourers with proofs of identity, insurance, bank accounts, and ATM facilities. Further, LabourNet provided the registered labourers with training so that they could command better prices for their services. However, LabourNet struggled to earn revenue or become financially self-reliant because of difficulties in scaling its operations, its inability to monetize the services that it provided as well as for being unable to command any price premium for their labourers from the markets. The case ends at a point where LabourNet had to decide its future course of action because the donor funds on which it was relying was getting exhausted and LabourNet was unsure about the strategy that it should adopt in order to create a business model that was both inclusive and financially sustainable.

Learning Objective

• Sensitize the students to the conditions of informal sector labourers in India
• Explain how a social enterprise can create value for the poor by acting as multi- sided platform
• Communicate the dilemma that many social enterprises face between maximizing social impact and earning enough commercial returns to be financially self-reliant