Aggregators to pay 1% of commission for gig workers’ welfare in Karnataka
Karnataka has taken a landmark step in labor reform: app-based aggregators such as Swiggy, Zomato, Ola, and Amazon will now pay 1% of their commission—capped at ₹0.50 to ₹1 per transaction—towards a welfare fund for gig workers. The move is expected to generate ₹250–₹300 crore annually, directly benefiting nearly five lakh gig workers across the state
Karnataka has taken a significant step in reshaping how the gig economy is governed, placing worker welfare at the center of platform-led growth. In a first-of-its-kind move in India, the state has mandated that app-based aggregators such as Swiggy, Zomato, Ola, and Amazon contribute a small welfare fee for every transaction carried out on their platforms. The levy, set at 1 percent of the commission earned by these companies and capped between ₹0.50 and ₹1 per transaction, is expected to generate an annual fund of ₹250 to ₹300 crore dedicated entirely to gig workers.
The policy applies across sectors that rely heavily on app-based labor, including ride-hailing, food delivery, e-commerce, and logistics. While the contribution rate is uniform, the cap has been designed to account for differences in business models, ensuring that smaller platforms are not disproportionately burdened. The intent, according to officials, is to strike a balance between protecting workers and maintaining the viability of digital platforms that have become integral to urban and semi-urban economies.
The beneficiaries of this reform are the nearly five lakh gig workers operating across Karnataka, a majority of whom work without formal employment contracts or access to social security. Bengaluru alone accounts for close to 2.75 lakh of these workers, reflecting the city’s role as a hub for platform-based services. For drivers, delivery partners, and last-mile service providers, the new welfare fund promises access to basic protections such as health insurance, accident coverage, and structured grievance redressal—benefits that have long been absent despite the essential nature of their work.
Oversight of the fund will rest with a newly constituted Gig Workers Welfare Board, a statutory body with 16 members. Chaired by the state Labour Minister, the board will include representatives from government departments, worker unions, and aggregator platforms. Aggregators have been given 45 days to register with the board, submit verified worker data, and begin regular contributions, bringing a level of formal accountability to a sector that has largely operated outside traditional labor frameworks.
Worker groups have welcomed the decision, describing it as a long-overdue recognition of the risks and uncertainties faced by gig workers, from road accidents to income volatility. Many see the fund as a foundational step toward dignity and security in platform work. Aggregator companies, while acknowledging the importance of worker welfare, have expressed concerns about rising operational costs and the possibility of price pressures. However, the capped nature of the levy is intended to limit financial strain, especially for smaller or emerging players.
By institutionalizing a welfare contribution through legislation, Karnataka has positioned itself as the first state in India to formally embed gig worker protection into the platform economy. The move is being closely watched by policymakers and industry leaders across the country, as it raises a larger question about the future of work in India’s digital economy. Whether this model becomes a national template or faces resistance from industry will likely shape the next phase of labor reform, but for now, Karnataka’s decision marks a clear shift toward sharing the gains of platform growth with the workers who sustain it.
Quick Comparison
Stakeholder | Impact of 1% Levy |
Gig Workers | Access to health insurance, accident cover, welfare schemes |
Aggregators | Slight increase in operating costs; capped fee limits burden |
Government | ₹250–₹300 crore annual fund; stronger labor credibility |
Consumers | Possible minor price adjustments, but improved worker security |
For further insights into the evolving workplace paradigm, visit
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