Gig Workers Face New Welfare Fees in Karnataka: Impact on Amazon, Zomato, and Uber - Read Now
Karnataka's proposed welfare fees for gig workers could affect companies like Amazon and Zomato, raising costs for consumers.
Oct 19, 2024, 18:06 IST
The government of Karnataka will take into account the proposal of welfare fees for gig economy companies, including the likes of Amazon, Zomato, Swiggy, and Uber. With millions employed as delivery partners by these companies, the rolls of the proposed fees could severely change the cost structure for consumers. The committee is most likely to meet next week and bring in a decision on this issue.
The proposed bill is termed the Gig Workers (Social Security and Welfare) Bill, 2024. The Karnataka government seeks to constitute a welfare fund of gig workers in the state. According to reports, the Karnataka government may charge an aggregator platform fee of between 1 percent to 2 percent of total earnings. Once approved, such a fee would eventually be passed on to consumers when availing services from such companies.
The draft bill intends to create Karnataka Gig Workers Social Security and Welfare Fund. It will provide social security benefits to gig workers, and hence, the fee is to be collected from all companies employing gig workers and remitted quarterly to the state government.
However, several startups and unicorns have spoken out against this proposal, which they say is only a step closer to something that may further jeopardize the ease of doing business in the state. They argue that this additional layer of financial burden may not positively impact the startup ecosystem, but rather stifle more innovation and growth. The move has already drawn flak from the industry lobby groups, including the Confederation of Indian Industry (CII), Nasscom, and the Internet and Mobile Association of India (IAMAI), which have feared this would hike the operations cost for the firms and, in turn, will hit the consumers.
"The further development of this situation will be very closely watched by all stakeholders in the gig economy as it relates to what exactly the decision means for service cost and services provided by workers on platforms.".
The proposed bill is termed the Gig Workers (Social Security and Welfare) Bill, 2024. The Karnataka government seeks to constitute a welfare fund of gig workers in the state. According to reports, the Karnataka government may charge an aggregator platform fee of between 1 percent to 2 percent of total earnings. Once approved, such a fee would eventually be passed on to consumers when availing services from such companies.
The draft bill intends to create Karnataka Gig Workers Social Security and Welfare Fund. It will provide social security benefits to gig workers, and hence, the fee is to be collected from all companies employing gig workers and remitted quarterly to the state government.
However, several startups and unicorns have spoken out against this proposal, which they say is only a step closer to something that may further jeopardize the ease of doing business in the state. They argue that this additional layer of financial burden may not positively impact the startup ecosystem, but rather stifle more innovation and growth. The move has already drawn flak from the industry lobby groups, including the Confederation of Indian Industry (CII), Nasscom, and the Internet and Mobile Association of India (IAMAI), which have feared this would hike the operations cost for the firms and, in turn, will hit the consumers.
"The further development of this situation will be very closely watched by all stakeholders in the gig economy as it relates to what exactly the decision means for service cost and services provided by workers on platforms.".
