Uber, Eternal and Porter have withdrawn from the Karnataka Platform-Based Gig Workers Welfare Board, escalating a wider dispute between the state government and major gig-economy companies over the state’s 2025 legislation governing platform workers. The three companies were represented on the statutory board but have decided to step away because they are among the companies challenging the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, in the Karnataka High Court.
The development comes as Karnataka attempts to strengthen its social-security framework for app-based workers while platforms argue that the state law creates additional regulatory and financial obligations alongside the existing national framework. The government is now looking for replacement platform representatives, with Delhivery, Namma Yatri and Yulu reportedly agreeing to join the board. So far, 15 platform companies have registered with the board, collectively representing around seven lakh gig workers.
Uber, Eternal And Porter Exit Welfare Board
Uber, Eternal, the parent company of Zomato, and logistics platform Porter have decided to withdraw from the Karnataka Platform-Based Gig Workers Welfare Board.
The companies were members of the board established under Karnataka’s gig-worker welfare law. Their decision is linked to their ongoing legal challenge against the legislation.
The companies do not want to simultaneously participate in a statutory body created under legislation whose constitutional validity they are challenging in court.
Karnataka Gig Welfare Board: Latest Status
| Particular | Details |
|---|---|
| Board | Karnataka Platform-Based Gig Workers Welfare Board |
| Law | Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 |
| Companies exiting | Uber, Eternal, Porter |
| Amazon India | Remains on the board |
| Companies registered with board | 15 |
| Gig workers represented | Around 7 lakh |
| Replacement companies | Delhivery, Namma Yatri, Yulu |
| Legal challenge | Pending before Karnataka High Court |
| Main dispute | State welfare law and related obligations |
Amazon India, which is also represented on the board, has stayed on because it is not part of the current court challenge.
Why Are Platforms Challenging Karnataka’s Gig Worker Law?
The dispute centers on the relationship between Karnataka’s state-level legislation and India’s national framework for gig and platform workers.
The Karnataka law creates a dedicated welfare structure for workers who provide services through digital platforms. It establishes a welfare board, welfare fund and mechanisms for worker registration, grievance redressal and social-security benefits.
Platform companies and the Internet and Mobile Association of India have challenged the law, arguing that several of its provisions overlap with the central Code on Social Security, 2020.
Key Issues Raised By Platforms
| Issue | Platform Companies’ Concern |
|---|---|
| Central vs state law | Potential overlap with national legislation |
| Welfare contribution | Additional financial burden |
| Compliance | More registration and reporting requirements |
| Welfare administration | Parallel regulatory structure |
| Grievance mechanisms | Additional operational obligations |
| Constitutional validity | Questions over state legislative authority |
| Contribution adjustment | Uncertainty over coordination with central obligations |
The companies have argued that the central framework already provides for social security for gig and platform workers.
The Karnataka government, however, maintains that the state legislation is designed to provide additional welfare mechanisms and does not necessarily conflict with the central law.
What Does Karnataka’s Gig Workers Act Provide?
The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 establishes a dedicated institutional framework for platform workers.
The law covers workers who provide services through digital platforms, including ride-hailing, delivery, e-commerce and other app-based services.
It also creates a welfare fund intended to finance social-security and welfare measures.
Major Provisions Of Karnataka’s Gig Worker Framework
| Provision | Purpose |
|---|---|
| Welfare Board | Administers the state’s gig-worker framework |
| Welfare Fund | Finances worker welfare schemes |
| Worker registration | Creates an identifiable worker base |
| Unique ID | Helps identify registered workers |
| Welfare fee | Platform contribution to welfare fund |
| Grievance redressal | Provides mechanism for worker complaints |
| Transparency | Requires clearer information on payments and deductions |
| Social security | Supports benefits such as insurance and healthcare |
| Platform obligations | Requires companies to meet specified compliance requirements |
The legislation is intended to address a major gap in India’s labor market: millions of workers operate through digital platforms without the traditional employer-employee relationship associated with conventional jobs.
Platforms Must Pay A Welfare Fee
One of the most contentious parts of the Karnataka framework is the welfare fee payable by platforms.
The state has notified a 1% welfare fee, with transaction-level caps designed to limit the impact on different types of platform businesses.
For certain delivery transactions, the effective caps have been set at 50 paise for two-wheelers, 75 paise for three-wheelers and ₹1 for four-wheelers.
Karnataka Welfare Fee Structure
| Vehicle / Service Category | Maximum Fee Per Transaction |
|---|---|
| Two-wheeler | ₹0.50 |
| Three-wheeler | ₹0.75 |
| Four-wheeler | ₹1 |
| Broad notified welfare fee | 1% subject to applicable caps |
The Karnataka government expects the welfare mechanism to generate approximately ₹250 crore to ₹300 crore annually.
The platforms, however, have raised concerns about the additional financial burden and the absence of a clear mechanism for reconciling state-level contributions with obligations under the central social-security framework.
Karnataka Wants Other Platforms To Fill Vacancies
Following the withdrawal of Uber, Eternal and Porter, the state government has begun looking for other platform companies to fill the vacant seats.
Delhivery, Namma Yatri and Yulu have reportedly responded positively and agreed to join the board.
This would allow the government to maintain platform-industry representation even after three major companies step away.
Board Representation: Before And After
Earlier
Uber
Eternal
Porter
Amazon India
↓
Uber, Eternal & Porter Withdraw
↓
Replacement Process
↓
Delhivery
Namma Yatri
Yulu
The development also demonstrates the diversity of India’s platform economy. The board does not represent only food-delivery companies; it covers mobility, logistics, e-commerce and other digital-platform businesses.
How The Karnataka Welfare Board Is Structured
The legislation provides for representation from multiple stakeholders.
The board includes government officials, worker representatives, platform representatives and civil-society experts.
The labor minister serves as the ex-officio chairperson.
Karnataka Gig Workers Welfare Board Structure
| Category | Representation |
|---|---|
| Labour minister | Chairperson |
| Labour department | Government representation |
| Information technology department | Government representation |
| Commercial taxes department | Government representation |
| Gig-worker representatives | 4 |
| Aggregator / platform representatives | 4 |
| Civil-society experts | 2 |
| Chief executive officer | Member Secretary |
The structure is intended to give workers and platforms a formal role in discussions around welfare schemes and implementation.
The withdrawal of major platforms could therefore affect the balance of industry representation, making the government’s search for replacements important.
Around Seven Lakh Gig Workers Are Represented
The latest figures indicate that 15 platform companies have registered with the Karnataka board, collectively representing approximately seven lakh gig workers.
This gives the board a potentially significant role in India’s platform economy.
Karnataka is one of India’s largest technology and startup hubs, with Bengaluru serving as a major center for ride-hailing, food delivery, quick commerce, e-commerce and logistics platforms.
Karnataka’s Platform Economy
| Indicator | Approximate Figure |
|---|---|
| Registered platform companies | 15 |
| Gig workers represented | ~7 lakh |
| Expected annual welfare collections | ₹250-300 crore |
| Bengaluru gig-worker concentration | ~2.75 lakh under earlier state estimates |
The state’s earlier estimates suggested that nearly five lakh gig workers were engaged with platform-based services in Karnataka, including around 2.75 lakh in Bengaluru.
The differing figures reflect the evolving registration process and broader definition of platform workers covered by the welfare framework.
Karnataka High Court Challenge Remains Pending
The board exits come against the backdrop of an ongoing legal battle.
The Internet and Mobile Association of India and several platform companies have challenged the constitutional validity of the Karnataka law and its rules.
The petitioners have argued that Parliament’s Code on Social Security, 2020 already establishes a national framework covering gig and platform workers.
They contend that a parallel state framework could create overlapping obligations.
Legal Dispute At A Glance
| Issue | Platforms’ Position | Karnataka’s Position |
|---|---|---|
| State welfare law | Constitutionally questionable | Valid state welfare measure |
| Central Code on Social Security | Already provides framework | Does not prevent state measures |
| Welfare fee | Additional financial burden | Necessary for worker welfare |
| Multiple obligations | Could create duplication | Can be coordinated |
| Welfare board | Parallel structure | Dedicated state institution |
| Worker benefits | Need national framework | State-specific support needed |
The Karnataka High Court has not struck down the legislation.
In an interim proceeding, the court directed petitioning companies to deposit the welfare fee demanded by the state while also directing authorities not to take coercive action against them pending the legal proceedings.
The core constitutional challenge remains unresolved.
Why Gig Worker Welfare Has Become A Major Issue
India’s platform economy has expanded rapidly over the past decade.
Drivers, delivery riders, logistics workers and other platform workers now form an important part of urban economic activity.
However, their employment structure differs from conventional salaried employment.
Workers are typically paid based on completed rides, deliveries, assignments or other transactions rather than receiving a conventional salary and benefits package.
Traditional Employment Vs Platform Work
| Feature | Traditional Employee | Platform Worker |
|---|---|---|
| Employer relationship | Direct | Platform-mediated |
| Payment | Salary / wages | Task or transaction based |
| Work allocation | Employer | Algorithm / platform |
| Benefits | Often employer-linked | Generally limited / separate |
| Social security | Formal systems | Historically fragmented |
| Flexibility | Varies | Generally higher |
| Worker risk | Shared with employer | Greater individual exposure |
This distinction is at the heart of the regulatory debate.
Governments want workers to receive social protection, while platforms argue that imposing traditional employment-style obligations could fundamentally change their business models.
Welfare Costs Could Affect Platform Economics
The welfare fee may appear small on an individual transaction, but the aggregate cost can become substantial because platforms process millions of transactions.
For businesses operating on relatively thin margins, even small per-transaction charges can affect unit economics.
The impact could eventually be absorbed by the platform, passed through to consumers, reflected in worker incentives or incorporated into pricing.
Potential Economic Impact
Welfare Fee
↓
Higher Platform Cost
↓
Possible Responses:
→ Absorb Cost
→ Adjust Consumer Pricing
→ Change Worker Incentives
→ Reduce Other Operating Costs
→ Improve Platform Efficiency
The eventual impact will depend on how platforms respond and whether other states introduce comparable welfare mechanisms.
Karnataka Could Become A Model For Other States
Karnataka is not the only Indian state attempting to create a dedicated welfare system for gig workers.
Rajasthan became the first state to introduce dedicated legislation for platform workers in 2023. Bihar, Jharkhand and Telangana have subsequently introduced their own frameworks.
This creates the possibility of multiple state-level systems developing alongside the national Code on Social Security.
Gig Worker Welfare Legislation In India
| State | Key Development |
|---|---|
| Rajasthan | Dedicated gig-worker welfare law in 2023 |
| Karnataka | Platform-Based Gig Workers Act, 2025 |
| Bihar | Gig-worker welfare legislation |
| Jharkhand | Gig-worker welfare legislation in 2025 |
| Telangana | Platform-worker welfare framework in 2026 |
| Centre | Code on Social Security, 2020 |
The long-term policy challenge will be ensuring that workers moving across platforms and states do not face fragmented systems.
Companies May Face Higher Compliance Requirements
The Karnataka law goes beyond the welfare fee.
Platforms are also expected to comply with requirements involving worker registration, information disclosure, grievance mechanisms and other administrative obligations.
For large companies, these requirements may be manageable.
For smaller platforms, however, compliance could become a meaningful barrier to expansion.
Platform Compliance Areas
| Requirement | Potential Business Impact |
|---|---|
| Worker registration | Data-management costs |
| Welfare payments | Direct financial cost |
| Returns and reporting | Administrative workload |
| Grievance mechanisms | Staffing and technology costs |
| Payment transparency | System changes |
| Worker communication | Operational requirements |
| Record keeping | Compliance infrastructure |
The government’s challenge will be to enforce these requirements without discouraging smaller platforms from operating in the state.
What Uber, Eternal And Porter Exit Means
The withdrawal of three prominent companies is significant because all three operate large platform businesses involving substantial numbers of workers.
Uber operates ride-hailing services, Eternal owns platforms including Zomato, and Porter operates an app-based logistics network.
Their decision signals that the dispute is not limited to one segment of the gig economy.
Companies Involved
| Company | Platform Economy Segment |
|---|---|
| Uber | Ride-hailing and mobility |
| Eternal | Food delivery and related platform services |
| Porter | Logistics and goods transportation |
| Amazon India | E-commerce |
| Delhivery | Logistics |
| Namma Yatri | Mobility |
| Yulu | Mobility / EV services |
The participation of replacement companies could help the government maintain representation, but the legal dispute involving the law itself remains unchanged.
The Bigger Picture
Uber, Eternal and Porter leaving Karnataka’s Gig Workers Welfare Board marks another escalation in the broader debate over how India’s platform economy should be regulated. The companies’ decision is closely tied to their legal challenge against Karnataka’s 2025 gig-worker welfare law, particularly concerns around overlapping central and state regulations, welfare contributions and additional compliance obligations.
For workers, the state’s framework represents an attempt to create a dedicated social-security system for a rapidly expanding workforce that has historically operated outside traditional employment structures. For platforms, however, the issue is about cost, regulatory certainty and the risk of multiple welfare regimes across different states. With 15 companies already registered and around seven lakh gig workers represented, Karnataka’s approach could become an important test case for the future of gig-worker regulation in India.
Looking Ahead
The immediate focus will be on whether Delhivery, Namma Yatri and Yulu formally take up the vacant platform seats and how the welfare board operates with its revised industry representation. At the same time, the Karnataka High Court’s eventual decision on the constitutional challenge could determine whether the state’s model remains in its current form or requires significant changes.
The larger issue extends beyond Karnataka. As India’s gig economy expands across mobility, food delivery, logistics, e-commerce and quick commerce, governments will face growing pressure to provide social protection without imposing regulatory structures that make platform businesses economically unviable. The outcome of Karnataka’s legal dispute could influence how other states and the Centre approach the balance between worker welfare, platform flexibility and a unified national framework
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