Bengaluru: While workers’ unions have welcomed the Karnataka government’s announcement that it would set up a welfare board for gig workers, experts and app-based service providers are skeptical about the move.
On Thursday, Chief Minister Siddaramaiah announced that the Karnataka government will fulfil Rahul Gandhi’s promise to set up a welfare board. He also said a 5 percent cess would be collected from companies like Amazon, Flipkart, Ola, Uber, and others that employ gig workers, while the remaining will be put in by the state government.
“We will soon bring a comprehensive legislation before the cabinet to ensure fair wages, safety, and long-term social protections for gig workers,” the CM said in a post on X.
A representation of gig workers had met Rahul Gandhi in November 2022 during the Hyderabad leg of the Bharat Jodo Yatra. Gandhi then followed this up with a promise to set up a gig workers welfare board during his campaign in Rajasthan, ahead of the 2024 Lok Sabha elections, in May last year.
Siddaramaiah’s announcement came after he met with Rahul in Delhi Thursday.
Sources in the government said it is likely to promulgate an ordinance to implement this at the earliest.
Speaking to ThePrint, Karnataka Labour Minister Santosh Lad said, “The gig economy is basically run by gig workers. They (the platforms) are not providing them with two-wheelers or four-wheelers…Other than the app, what else is provided?”
He added: “They (the platforms) do not even provide an installment, or loan…they (gig workers) have to work rain or shine, day and night…The amount of carbon dioxide he is inhaling, is he not compromising his life for you (platform)?”
Shaik Salauddin, the national general secretary of the Indian Federation of App-Based Transport Workers (IFAT) and founder president of the Telangana Gig and Platform Workers’ Union (TGPWU), hailed the move.
“The Karnataka Gig Workers Bill is a much-needed step toward recognising gig and platform workers as an essential part of the economy. It must ensure fair wages, job security, and social protection for workers who drive the app-based economy,” Salauddin told ThePrint Friday.
However, two app-based service providers told ThePrint that this is much easier said than done since there is no uniform law on the issue in the country and catering to state-specific laws or boards would be difficult for the platforms.
Even before discussing modalities, several platforms claim that they have not even been approached by state governments that have proposed such boards yet. Most companies in the e-commerce space remain non-committal about the proposal.
‘Fair wages and security’
According to a June 2022 Niti Aayog report, there are approximately 7.7 million gig workers across India. The report, titled ‘India’s Booming Gig and Platform Economy’, further projected that the number of gig workers would rise to 23.5 million by 2030.
However, even now, the number of gig workers could well be far higher since several e-commerce majors and app-based platforms do not share the exact number of ‘partners’ they have delivering food, groceries, and other items or how many drive taxis and auto rickshaws.
Most of these gig workers are not considered part of the traditional labour force and are considered ‘driver partners’ or ‘delivery partners’ and not employees of the company. By extension, they do not have recognised unions nor any other safeguards that their counterparts working in other traditional industries or corporate spaces get.
In the 2025-26 Budget, released in February, the Union government too came out with a proposal to provide health insurance for gig workers. It had also said that it was prioritising formal registration of gig workers through ID cards and enrollments on the e-Shram portal.
States like Rajasthan have already introduced a welfare board for gig workers, while others, like Karnataka and Telangana, have been preparing to roll out their own for some time now.
One of India’s largest mobility service providers said that though these boards have been set up—or announcements have been made—no state government has approached them so far. “Its like an election promise to set up such boards. And once elections are done, governments do not bother taking it forward,” said one official at a mobility service provider, requesting anonymity.
However, Salauddin said that there have been several rounds of discussions with e-commerce companies over the issue in Karnataka and other states.
The Karnataka labour minister also confirmed this. Lad said that he conducted nearly 20 meetings between July 2023 and 2024 which included members of the International Labour Organisation (ILO).
He added that even state governments have not enforced obligations, like the Industrial Act, Dispute Act, and other labour laws, on these e-commerce companies as they do not fall under the traditional industry.
In June last year, the state government publicly shared a draft of the Karnataka Gig Workers (Conditions of Service and Welfare) Bill 2024. However, a plan to table it in winter session of the legislature was put on hold after objections from stakeholders.
Also Read: Karnataka’s draft bill for gig workers: income security, occupational safety, grievance redressal
‘Consumers will bear the brunt’
According to Lad, there are around 5 lakh gig workers in Karnataka and the 5 percent that will be collected from the platforms will be used for their benefit.
But companies say that they cannot calculate—let alone pay—a percentage of transactions.
“There is no uniformity and each state may charge a different percentage. It could be 2 percent in Bengaluru and 10 percent in Delhi. How do we as a company set aside money or a budget for this,” the official from a mobility service provider cited above said.
The official added that if the government says that the contribution from the company should be a percentage of the earnings or profit, then most ride hailing companies and several others in the ecommerce sector are not making any money.
In 2024, Uber had released its report, which had details on the total number of kilometres covered by riders and the most popular modes of transport and hours in the day, among other trivia from its records. But it did not share how many rides it carries out per day or provide details on city-wise breakup of such numbers.
Nor do other mobility service providers.
Other companies in the space also do not share city or state-wise data that makes it harder for state governments to track total transactions and then levy a charge on them, experts said.
“Governments do not even track transactions. What are they going to charge 5 percent of? The profits, rides or will this be a flat charge,” Satya Arikutharam, an independent mobility expert and consultant, told ThePrint.
An important point the proposed gig workers ordinance misses is the fact that auto and taxi drivers are permit holders unlike delivery workers, hence they shouldn’t be in its ambit at all, Arikutharam added.
Though Karnataka prides itself as the startup capital of the country, its laws have not kept pace with disruption. For instance, just this week, the Karnataka High Court suspended bike taxi aggregators, giving three months to the state government to draft laws on bike taxis. This was after ambiguity in laws forced companies to go to court and fueled clashes between auto drivers and app-based aggregators.
Experts said that there is confusion to this date on whether app-based mobility service providers come under the information technology, the transport, or for that matter, the industries department. And this confusion often ends up in courts over various issues, adding to legal entanglements and more ambiguity.
Arikuthram says that levying a cess without being able to access data will only lead to more confusion and litigation.
He added that ecommerce companies can very easily jack up prices of products or services to pay the government but the burden of this “will be passed on to the consumer”.
(Edited by Sanya Mathur)