Karnataka Government To Impose Cess On Zomato, Uber, Swiggy Payments To Support Gig Workers

Karnataka will impose a new cess on transactions through aggregator platforms like Zomato, Uber, and Swiggy to fund a welfare scheme for gig workers. Labour Minister Santosh Lad emphasized that this charge applies only to transport services, not goods purchased. This initiative aims to address the lack of dedicated labor laws for gig workers and establish a welfare fund to support their rights and needs.

Cess for Gig Workers' Welfare

The Karnataka government announced this cess during a press conference, stating that the funds will be allocated to a welfare board for gig workers. Minister Lad clarified, "The money that will be collected will be used for the welfare fund for gig workers". This move reflects growing recognition of gig workers' contributions and challenges in the evolving job market.

Context and Background

With gig work becoming increasingly prevalent, Karnataka's initiative addresses the absence of specific labor protections for these workers. The state has drafted legislation aimed at ensuring social security and safety for platform-based workers, marking a significant step towards formalizing their rights in an industry often characterized by instability.

Questions and Answers

1. What is the new cess about?

The Karnataka government will impose a cess on transactions through aggregator platforms to support gig workers' welfare, specifically targeting transport services rather than product purchases.

2. How much will the cess cost consumers?

The cess will range from 1-2% per transaction, which may lead to a slight increase in service costs for consumers using these platforms.

3. When will this cess take effect?

The bill detailing this cess is expected to be discussed in the Karnataka state cabinet soon, with a presentation planned during the winter assembly session later this year.

4. Why is this cess being implemented?

The cess aims to establish a welfare fund for gig workers, providing them with social security benefits that are currently lacking due to the absence of dedicated labor laws for gig work.

5. What has been the response from stakeholders?

While some aggregators have opposed the fee, extensive consultations have been held with various stakeholders, including unions and industry associations, indicating a push towards ensuring social security for gig workers despite concerns about potential impacts on business operations.