A group comprising top tech startups and unicorns has raised several “serious concerns” over a platform-based gig workers Bill proposed by the Karnataka government, saying it would hurt the ease of doing business.
They told the state government the Bill in its current form would hamper operations and increase regulatory and compliance burden on the nascent gig and startup economy, according to sources.
The group made the submission to the state government through various trade bodies such as the Confederation of Indian Industry (CII), the National Association of Software and Service Companies (Nasscom), and the Internet and Mobile Association of India (IAMAI).
A copy of the submission has been reviewed by Business Standard.
Some of the companies that are part of the group include Swiggy, Ola, Zomato, Uber, Urban Company, and Amazon, sources said.
The draft of the Karnataka Platform Based Gig Workers (Social Security and Welfare) Bill, 2024 provides a grievance redress mechanism for gig workers such as cab drivers, delivery people, carpenters, plumbers and repairers.
The aim is to bring formal rights and social security to them.
It also aims to protect workers from arbitrary termination and aims to ensure basic minimum social security for them.
The Bill is likely to be tabled during the monsoon session of the Assembly.
“The Karnataka Bill introduces wide-ranging powers of inspection to the state government including algorithms, contracts, and day-to-day operations of platforms.
"This is akin to the Inspector Raj system of the 70s and 80s and goes against the spirit of the Labour Codes and ease of doing business,” said one of the tech industry executives from the group.
“Karnataka is a progressive state and the hub of startups in India.
"This Bill will surely impact the state’s reputation in the long term,” the executive added.
There are several provisions that directly allow the state to mandate how companies will operate their business.
They include a notice period to be served to gig workers and grounds for termination.
They also include the number of orders gig workers can cancel per week.
The provision mentions providing standard template contracts which might not consider sector-specific nuances.
Other provisions include sharing and auditing of proprietary information about algorithms and the manner and frequency of payment to gig workers.
“Information required to be shared by platforms is confidential and proprietary, proving the competitive edge for each platform.
"Such information may not be disclosed by platforms to gig workers without adequate safeguards in place,” said the submission.
It said that given the quantum and dynamicity of transactions, requiring aggregators to map every transaction onto the CTIMS (Central Transaction Information and Management System) will place an unduly onerous obligation on all aggregators.
Instead of CTIMS, self-reporting and audited financial statements of the platforms should be relied on.
The group also made a recommendation on Cess or Welfare fees.
Under the Karnataka Bill, it said, the welfare fee should be levied at 1-2 per cent of the payout to the gig worker per transaction or 1-2 per cent of the state-specific net revenue of the aggregator (whichever is higher), capped at a maximum of Rs 1-2 per transaction.
“Anything higher will be burdensome on platforms and may need to be passed onto customers or the gig workers, which will be counter-productive,” it said.
