Karnataka Set To Introduce New Welfare Law, Price Hike For Consumers Ordering Food, Cab Rides

Karnataka is poised to bring in a new welfare law for gig and platform workers. According to TOI, this decision may result in consumers paying more for cab rides, food deliveries, and other app-based services.

The Karnataka Platform-based Gig Workers' (Social Security and Welfare) Ordinance, 2025 includes a 1%-5% cess to create a welfare fund for nearly 30,000 gig workers in the state.

Customers, platforms, and workers themselves will share the cost amongst themselves, said officials. The end user is expected to bear the most.

The method of cess collection and the law enforced on the ground is challenging. The Karnataka cabinet's decision to introduce the ordinance is a positive step.

Balaji Parthasarathy, Principal Investigator at Fairwork India and professor at IIIT-Bengaluru, told TOI, “The legislation outlines the terrain, but implementation will hinge on rules, particularly how wage protection, dispute resolution, and algorithmic accountability are addressed.”

He warned that there’s no wage-floor guarantee. “Transparency in deductions is a start, but without clear limits on payout cuts, platforms can reduce per-task payments to make up for the cess,” he said.

Parthasarathy noted that while platforms don't talk to worker groups, they have made collective representations through bodies like NASSCOM and IAMAI to oppose parts of the bill, says TOI.

Depending on whether they provide delivery, transport, or personal services, draft rules determine that platforms be placed in different cess slabs . Officials expect to raise around 150 crore a year through this cess.