Eternal, Meesho, Other Consumer Tech Unicorns Challenge Karnataka’s Gig Worker Law

Major consumer internet companies Swiggy, Zepto, Urban Company and Eternal have jointly moved the Karnataka High Court (HC) challenging the constitutional validity of the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025.

The consortium of the startup unicorns argue that the law creates a parallel regulatory framework to the Centre’s already existing social security framework for gig workers. The matter is yet to be listed before the High Court.

As per a report by the Bar and Bench, the writ petition filing is led by the Internet and Mobile Association of India (IAMAI), along with Eternal, Zepto, Swiggy, Urban Company and Meesho’s logistics arm Valmo. 

Queries sent by Inc42 to Swiggy, Zepto, Zomato, Urban Company and Valmo Transportation remained unanswered at the time of publishing. 

The petition outlines the Parliament’s already enacted Code on Social Security, 2020 (COSS), which implemented a comprehensive national framework for the identification of gig and platform workers, welfare schemes, and aggregator contributions. 

The Centre’s legislative move to govern social security for gig and platform workers makes the parallel regime redundant, as per the petition.

The petition further alleges that the Act and the Rules are arbitrary, violate Article 14 and infringe other fundamental rights guaranteed under Part III of the Constitution.  Inc42 hasn’t independently viewed the petition.

Apart from seeking to strike down the Act and the Rules, the petition also challenges the notifications constituting the Karnataka Platform Based Gig Workers Welfare Board as well as other notices sent under the regime. 

The series of notices issued include constituting Internal Dispute Resolution Committees (IDRCs) and furnishing  information relating to platform workers, as well as show-cause notices alleging non-compliance with the law, and welfare fee notices dated June 22 directing companies to deposit the welfare fee and submit proof of payment by July 5.

Understanding Karnataka’s Gig Workers Policy

The Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025, was notified in September 2025, making Karnataka the first state to enact a dedicated law for platform-based gig workers.

The law establishes a welfare board and fund for gig workers as well as introducing social security protections for gig workers. Further, it lays down obligations for aggregator platforms and seeks greater transparency in algorithmic decision-making.

At the heart of the law is a two-tier grievance redressal mechanism designed to curb arbitrary suspensions and account deactivations. Every platform must IDRC to handle complaints related to payouts, deductions, suspensions and terminations. 

If a worker does not receive a response within 14 days or is dissatisfied with the outcome, the complaint can be escalated to the Welfare Board. Platforms are also required to provide written reasons before terminating or deactivating a worker’s account, except in specified emergency situations.

According to the Karnataka government, about 12 aggregators have already submitted details of nearly 12 Lakh active gig workers, although officials have acknowledged that the figures may include duplicate registrations until unique IDs are issued.

However, a central point of the dispute is the welfare fee introduced under the law.

In February 2026, the Karnataka government imposed a 1% welfare fee per transaction on the platform aggregator. For food and grocery delivery platforms, the fee is capped at ₹0.50 per transaction. Ride-hailing platforms, including Uber, Rapido and Namma Yatri, will pay up to ₹0.50, ₹0.75 and ₹1 for two-wheelers, three-wheelers and four-wheelers, respectively.

Logistics platforms such as Porter will pay between ₹0.50 and ₹1.50, depending on the vehicle category, while professional services platforms such as Urban Company face the highest cap of ₹1.50 per transaction.

The welfare fee will be collected for the first time on July 5 for transactions carried out during the April-June quarter. The money will go to the Karnataka Platform Based Gig Workers’ Fund to provide benefits such as life and accident insurance, disability cover, medical assistance, maternity benefits and old-age protection.

The law also requires platforms to file quarterly returns and report worker payments through the payment and welfare fee verification system (PWFVS). Delayed welfare fee payments can attract 12% annual interest, while repeated violations can result in penalties of up to ₹1 Lakh.

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