Uber, Eternal, Porter exit Karnataka Gig
Uber, Eternal, and Porter have withdrawn from the Karnataka Platform-Based Gig Workers Welfare Board, citing their ongoing legal challenge against the
Uber, Eternal, and Porter have withdrawn from the Karnataka Platform-Based Gig Workers Welfare Board. The Economic Times reported they left because they are challenging the law that created the board in the Karnataka High Court. Amazon India remains on the board, as it is not part of the litigation. The state government has recruited Delhivery, Namma Yatri, and Yulu to fill the vacancies.
Fifteen platform companies, representing an estimated 7 lakh gig workers, are registered with the board. It includes four representatives each from platform companies and worker unions, two external experts, and government officials.
The Legal Challenge and Fees
Eternal, Zepto, Swiggy, Urban Company, Meesho, and Uber India have deposited around Rs 4 crore as a welfare fee for the April to June quarter with the High Court. This deposit is subject to the litigation's outcome. Yulu paid the fee directly to the board instead. In January 2026, government estimates projected the levy could raise Rs 250 crore to Rs 300 crore annually.
The platforms argue in court that they support social security for gig workers. However, they contend the levy is premature because the state has not yet notified the welfare schemes the funds are meant to finance. They have also expressed concerns about the fee's impact on their cash flows.
The Internet and Mobile Association of India (IAMAI) stated its member platforms independently fund welfare initiatives for over six million monthly active platform workers. These initiatives cover health insurance, accident coverage, financial inclusion, and maternity benefits.
Fee Structure and Caps
Section 20(1) of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, imposes a fee of 1% to 5% on the payout a platform makes to a worker per transaction. The base is the worker's earnings, not the total order value or platform revenue. In February 2026, Karnataka fixed the rate at 1% and applied caps per transaction category.
| Category | Fee Cap per Transaction |
|---|---|
| Food and grocery delivery | 50 paise |
| Ride-hailing (two-wheeler) | 50 paise |
| Ride-hailing (three-wheeler) | 75 paise |
| Ride-hailing (four-wheeler) | Rs 1 |
| Logistics | 50 paise to Rs 1.50 |
| Professional services | Rs 1.50 |
Once a payout exceeds Rs 50, a larger order generates no additional welfare fee. Separately, Eternal increased Zomato's platform fee charged to consumers by Rs 2.40 in March 2026. That increase is nearly five times the maximum welfare fee on a delivery.
Karnataka chose the minimum 1% rate permitted by the Act. Labour Minister Santosh Lad told Deccan Herald that stakeholders had suggested 1% to 1.5%. Karnataka App-based Workers’ Union president Inayat Ali said the union sought 2% to 5% and considers the notified fee inadequate.
Court Proceedings and State Response
The High Court declined to stay the law in July. It directed the petitioners to deposit the welfare fee with the court and asked the state not to take coercive action against them. Justice M Nagaprasanna asked the state for a roadmap on using the fund and details of the proposed welfare schemes. The Advocate General told the court the money would not be used until the petitions are decided.
Labour Minister Santosh Lad recently directed officials to issue notices to platforms that have not deposited the fee with either the board or the High Court. "The companies have a choice to deposit the fee either with the court or with the board, but I don’t understand why some of them have not complied with the law," he told the Economic Times.
Withdrawing from the board does not end a platform's obligations. Section 10 still requires them to provide the board with their database of gig workers. The welfare fee obligation and requirements to form Internal Dispute Resolution Committees also continue.
Arguments in the Case
Uber argues in its petition that the state law creates a separate social security framework that conflicts with the central government's Code on Social Security, 2020. It contends the law creates overlapping financial and compliance burdens. Additional Solicitor General Arvind Kamath, appearing for the Union government, supported this view, arguing the state legislation is in direct conflict with the central Code.
Karnataka argues that industry bodies IAMAI and NASSCOM filed comments on the draft bill in June 2024 and cannot now plead repugnancy. The state also notes that Rajasthan, Bihar, and Telangana have introduced similar welfare legislation.
No welfare schemes currently exist to distribute the collected funds. The court observed that depositing the levy with it balances the interests of the petitioners, the state, and gig workers who might eventually benefit from the proposed measures.
