Karnataka government impose additional transaction fee on Zomato, Swiggy, Zepto and other online platforms; how this may be bad news for users – Times of India

The Karnataka government has introduced a new fee on transactions conducted through online platforms like Zomato, Swiggy, and Uber to fund social security measures for gig workers. The government said that the money collected will be used for the welfare of the gig workers.
Karnataka Labour Minister Santosh Lad said, “The Labour Department of Karnataka has decided to impose cess on every transaction on aggregators platforms like Zomato, Dunzo, Swiggy, Zepto, Ola and others such.The Money which will be collected will be used for the Welfare fund for Gig workers. We are not charging for products or goods which consumers purchase, wit will be charged only on transport.”

Earlier today (October 18) it was reported by Moneycontrol.com that the state government is planning to levy welfare fee of 1-2 percent on Zomato, Swiggy, Zepto and other online platforms. The collected funds will be transferred to a dedicated welfare board to support gig workers engaged in delivery services.
“We are planning to collect a welfare fee that will be levied on a per-transaction basis, ranging from 1-2 percent order on each platform. The fee will be collected by the respective aggregators, who will eventually pass it on to a welfare board that we are establishing,” a senior state government official reportedly told the website.
This fee will apply to all customers who transact on aggregator platforms, including Rapido, Dunzo, Zepto, Porter, Namma Yatri and others.
The move comes in the wake of the government’s draft Platform-Based Gig Workers (Social Security and Welfare) Bill, 2024, which aims to provide social security benefits to gig workers. The bill is expected to be presented in the state assembly during the winter session in December.
While the fee will be collected by the aggregator platforms, it will ultimately be passed on to the customers, leading to a slight increase in the cost of services. This could potentially discourage frequent use of these platforms.

Meetings with stakeholders

The government has conducted extensive consultations with stakeholders, including aggregators, gig workers’ unions, and industry associations, to finalize the details of the bill. Despite opposition from some aggregators, the government is determined to implement the fee to ensure adequate social security coverage for gig workers. Labour department officials said they conducted 32 rounds of meetings with stakeholders, including around 26 aggregators, gig workers’ unions, civil society groups and lawyers. “We also conducted inter-departmental discussions with the state Department of Information Technology and Biotechnology and organisations like NASSCOM (National Association of Software and Service Companies) and the CII (Confederation of Indian Industry). Members of the ILO (International Labour Organisation) also participated in the meetings,” an official said.

Bill timeline

Labour department sources said that the state cabinet is likely to discuss the Karnataka Platform-based Gig Workers (Social Security and Welfare) Bill on October 24. “Once the cabinet approves it, the bill is likely to be presented during the winter assembly session in December in Belagavi,” a source said.
Another source said, “In the draft bill, it was suggested to impose a 1 percent to 5 percent fee per order, but it was later decided to charge only 1 percent to 2 percent. It is likely to settle on a 1 percent fee once the rules are framed after the bill is passed by the assembly. Many aggregators were also not in favour of imposing a welfare fee based on annual turnover, so we decided to implement it on a per-transaction basis.”