Explained: Tiny contribution, big impact! Inside Karnataka's humble move for gig workers

The Karnataka government has fixed a 1 per cent welfare fee on aggregator platforms such as Zomato, Swiggy, Uber, Rapido, and Urban Company. This fee will be used to provide social security benefits to gig workers.

The decision has been taken under the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025. The law allows the government to collect money from aggregator platforms to support gig workers’ welfare.

The law allows the state government to charge a welfare fee between 1 per cent and 5 per cent of the payout made to gig workers for each transaction. The government has fixed the fee at 1 per cent, which is the lowest level allowed under the law.

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The government has chosen the lowest rate of 1 per cent per transaction. However, the actual fee amount will be subject to caps depending on the type of service and vehicle category. The order was published in the official Gazette on February 13 and takes effect immediately.

Caps fixed between Rs 0.50 and Rs 1.50 per transaction

For food and grocery delivery platforms such as Zomato, Swiggy, Blinkit, Zepto, and BigBasket, the welfare fee is capped at Rs 0.50 per transaction.

For ride-hailing services such as Rapido, Namma Yatri, and Uber, the fee is capped at Rs 0.50 for two-wheelers, Rs 0.75 for three-wheelers, and Rs 1 for four-wheelers.

Logistics platforms such as Porter will pay Rs 0.50, Rs 0.75, Rs 1, and Rs 1.50 per transaction for two-wheelers, three-wheelers, light commercial vehicles, and heavy commercial vehicles, respectively.

Professional services platforms such as Urban Company will face a maximum cap of Rs 1.50 per transaction.

Aggregators must deposit welfare fee every quarter

The government has directed aggregator platforms to calculate and self-declare the welfare fee and deposit the amount within five working days after the end of each quarter.

All transactions and payments will be tracked through a Payment and Welfare Fee Verification System (PWFVS), which will be managed by the state government and monitored by the Gig Workers Social Security Board. The details of fee collection and utilisation will be disclosed on the official portal.

Zomato, Swiggy shares fall after notification

Following the announcement, shares of Eternal (Zomato) fell 2.76 per cent to Rs 278.70, while Swiggy shares declined 2.40 per cent to Rs 333.80, reflecting cautious investor sentiment over potential cost implications.

Impact likely limited; companies may pass cost to users, says Anil Singhvi

Zee Business Managing Editor Anil Singhvi said the financial impact on companies is likely to remain limited because the fee per order ranges between Rs 0.50 and Rs 1.50.

He said companies are expected to pass on the additional cost to consumers through marginal increases in delivery or service charges, which may not significantly affect demand.

Singhvi added that the move could benefit companies in the long term as it will improve social security and stability for gig workers, which form the backbone of the platform business model. He also noted that the Karnataka government expects to collect around Rs 250 crore to Rs 300 crore annually through the welfare fee.

However, he said investor sentiment may remain slightly cautious in the near term, and the stocks could see mild pressure, though the development is not seen as a major negative for the business model.