Uber, Eternal, and Porter have withdrawn from Karnataka’s gig workers welfare board amid their legal challenge to the state’s gig workers law
The exit underscores the widening rift between gig economy platforms and the Karnataka government over the additional costs and compliance requirements imposed by the law
Karnataka has fixed the welfare fee at 1% of each transaction, subject to category-specific caps, while only 15 platforms representing about 7 Lakh gig workers have registered with the board so far
Uber, Eternal, and Porter have reportedly withdrawn from the Karnataka Platform-Based Gig Workers Welfare Board amid their legal challenges to the state’s gig workers law.
The three companies were members of the welfare board constituted under the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025. They said they do not want to remain part of a statutory body created under a law they have challenged in the Karnataka High Court, ET reported.
The HC has declined to stay the law but granted interim protection from coercive action to companies challenging it, including Eternal, Swiggy, Zepto, Urban Company, and Valmo Transportation.
Uber also moved the Karnataka HC last month, challenging the constitutional validity of the law. The court subsequently extended the same interim protection to the ride-hailing major and directed that its petition be heard along with the existing challenges to the legislation.
Amazon India, which is also represented on the welfare board, has remained a member as it is not involved in the ongoing litigation, the report said.
The Karnataka government is now looking to fill the vacancies created by the exits. Delhivery, Namma Yatri, and Yulu have agreed to join the board, it added.
Inc42 has reached out to Eternal, Porter, and Uber for comments on their reported withdrawal from the welfare board. The story will be updated on receiving a response.
So far, only 15 platform companies, collectively representing about 7 Lakh gig workers, have registered with the board.
The development comes as Karnataka labour minister Santosh Lad steps up the enforcement of the law. He reviewed its implementation yesterday and directed officials to issue notices to platforms that have not deposited the prescribed welfare fee with either the welfare board or the Karnataka HC.
At the heart of the dispute is the argument that Karnataka’s law creates a separate social security framework for gig workers despite the Centre’s Code on Social Security, 2020.
Uber has argued that the state law overlaps with the central framework while imposing additional financial and compliance requirements on platforms. The company has also questioned the rules framed under the Act, saying they could leave platforms with obligations under both the state and central social security regimes.
Karnataka notified the Platform-Based Gig Workers (Social Security and Welfare) Act in September 2025. The legislation provides for a welfare board and fund, social security benefits, and a grievance redressal mechanism for platform-based gig workers.
A key provision of the law is the welfare fee payable by platforms. In February 2026, the state fixed the fee at 1% of each transaction, subject to category-specific caps.
Food and grocery delivery platforms have to pay up to 50 paise per transaction. For ride-hailing platforms, the fee is capped at 50 paise for two-wheelers, 75 paise for three-wheelers, and ₹1 for four-wheelers.
The levy is intended to fund benefits such as life and accident insurance, disability coverage, medical assistance, maternity benefits, and old-age protection for gig workers.
Platforms have raised concerns about the additional costs and compliance burden. They also fear that similar laws in other states could lead to a fragmented regulatory landscape, requiring companies operating across India to comply with different welfare fees and rules.
Source: Inc42
