Congress woos gig workers with welfare fund from transaction fee on aggregator platforms

Ahead of the Karnataka Assembly polls, Congress leader Rahul Gandhi interacted with gig workers in Bengaluru in May 2023.

As the number of gig workers in India is expected to reach 23.5 million by 2029-30, the Congress party is leaving no stone unturned to woo them.

In 2023, the then Congress-led Rajasthan government became the first state in the country to pass a law for the welfare of gig workers. Now, Congress-led states in Karnataka and Telangana are following suit.

A NITI (National Institution for Transforming India) Aayog report estimates that the number of gig workers in India will rise to 23.5 million by 2029-30, up from 7.7 million in 2020-21.

Also, read: Gig Workers’ Welfare: Rajasthan shows the way by proposing a law

In November 2022, Shaik Salauddin, president of the Telangana Gig and Platform Workers Union (TGPWU), presented a list of grievances and demands from gig and platform workers to Congress leader Rahul Gandhi in Hyderabad during the ‘Bharat Jodo Yatra.’ Salauddin highlighted issues such as long working hours, low wages, lack of job security, and the absence of basic rights.

Following this, the then Congress-led Rajasthan government tabled the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Bill in July 2023 to guarantee social security for gig workers. In September 2023, the governor granted assent to the bill; however, the state government is yet to frame the rules after the BJP came to power in December 2023.

Also, read: Why gig workers in India can’t unionise, despite poor working conditions?

"We have been demanding that all states bring in a law for gig workers, establish a welfare board with social security, and ensure basic wages. We also urge all state governments and the Union government to include worker representatives in the policymaking process, so that our voices are heard," said Salauddin. He said that the Congress governments in Telangana and Himachal Pradesh should implement the law for gig workers since Gandhi has already promised it to us.

Karnataka Gig Workers Bill likely to be tabled soon

Ahead of the Karnataka assembly polls, Gandhi interacted with gig workers in May 2023, riding pillion on a delivery person's two-wheeler in Bengaluru. Over coffee and masala dosa at the iconic Airlines Hotel, he had a candid chat with delivery partners from Dunzo, Swiggy, Zomato, and Blinkit, discussing their lives and the lack of stable employment. Gandhi promised to introduce a gig workers' law similar to the Rajasthan Platform-Based Gig Workers (Registration and Welfare) Act, of 2023.

Also, read: Rahul Gandhi meets Zomato, Swiggy delivery agents in Bengaluru over Masala Dosa, coffee. Watch

The Congress released its manifesto for the Karnataka elections, promising to establish a 'gig workers welfare board' with a seed money allocation of Rs 3,000 crore. In December 2023, the Karnataka government began seeking inputs and suggestions for the proposed Karnataka Platform-Based Gig Workers (Social Security and Welfare) Bill.

Also, read: Karnataka Congress manifesto promises to constitute gig workers' welfare board, earmarks Rs 3,000 crore fund

The draft bill offers a grievance redressal mechanism and aims to protect gig workers, including cab drivers, personal care providers and delivery persons, from arbitrary and illegal termination. The bill was to be tabled during the monsoon session of the legislature, but it was stalled after aggregators and industry associations requested more time. Sources said the bill will be tabled in the winter session of the legislature in December 2024.

Moneycontrol had reported that the government has proposed a 1-2 per cent transaction fee on aggregator platforms like Zomato and Swiggy. This fee will be applied to every transaction taking place on these platforms, including Flipkart, Amazon, Ola, Uber, Urban Company, and others. The funds collected by these aggregators will be transferred directly to a welfare board, which will eventually use the funds to introduce social security measures for gig workers engaged in delivery services.

Also, read: Karnataka plans 1-2% transaction fee on aggregator platforms like Zomato, Swiggy for gig worker welfare fund

1-2% per transaction fee to be imposed on transport charges

According to Karnataka labour department officials, the 1-2 percent per-transaction fee will apply to transport charges, as GST is already levied on the overall product. Mohammad Mohsin, principal secretary, labour department, told Moneycontrol: "A 1-2 percent per transaction fee will be imposed on transportation charges. For food delivery and e-commerce firms, we will charge the transaction fee on delivery charges. For Ola, Uber, Rapido, and others, it will be based on the fare".

"The cabinet subcommittee will finalise it first, and then it will come to the cabinet. Once it is approved, it will be placed in the winter session of legislature. Though Rajasthan was the first to pass the law, it's yet to be implemented." he said.

Telangana to follow suit

Sources said that the Congress-led government in Telangana is also expected to follow suit. Telangana Labour Department officials are now preparing the draft for the Gig and Platform Workers (Rights and Welfare) Bill, 2024. In November 2023, Gandhi visited and interacted with drivers, gig workers, and sanitary workers in Hyderabad’s Jubilee Hills, ahead of the Telangana assembly polls.

On August 19, 2024, Gandhi took an Uber ride and highlighted the plight of gig workers, asserting that Congress-run states would create concrete policies to address their problems, while the INDIA bloc would strive for nationwide implementation.

When contacted, Sanjay Kumar, principal secretary, of Telangana Labour, Employment Training, and Factories, was unavailable for comment.

Aggregators are not enthused

However, aggregators have expressed serious concerns about the requirements for mapping every transaction onto the Central Transaction Information Management System (CTIMS) under the bill.

“We are not against the welfare of gig workers. The 1-2 percent transaction fee can be passed on to customers, but the major issue is sharing data, which can be misused by industry rivals,” said a source. Aggregator platforms have also raised these concerns through trade bodies, including the Confederation of Indian Industry (CII), the National Association of Software and Service Companies (Nasscom), and the Internet and Mobile Association of India (IAMAI).

Also, read: Karnataka Gig Workers' Bill: Nasscom says notice period for termination, data disclosures to hit operations

Karnataka labour department officials said they held 32 rounds of meetings with stakeholders, including around 26 aggregators, gig workers' unions, civil society groups, and lawyers. "We also held inter-departmental discussions with the state department of Information Technology and Biotechnology and organisations like NASSCOM and the CII. Members of the ILO (International Labour Organisation) also participated in the meetings," an official said.

Also, read: Gig Workers and Large Companies: A symbiotic relationship under threat

On the aggregators' reluctance to share details, an official said: "In most countries, aggregators share data. The welfare fee burden might fall on customers, gig workers, or platforms, but we need to track worker transactions. We will also design a mechanism for both aggregators and gig workers to pay, if required." He emphasised the need for transaction data and values to levy the welfare fee.

NITI Aayog report

A NITI Aayog report estimates that the number of gig workers in India will rise to 23.5 million by 2029-30, compared to 7.7 million in 2020-21. According to the report, titled 'India's Booming Gig and Platform Economy', published in June 2022, gig workers constitute 2.6 percent of the non-agricultural workforce, or 1.5 percent of the total workforce in India.

By 2029-30, the gig workforce is expected to expand to 2.35 crore (23.5 million) workers, forming 6.7 percent of the non-agricultural workforce or 4.1 percent of total livelihoods in India. Currently, about 47 percent of gig work is in medium-skilled jobs, 22 percent in high-skilled jobs, and 31 percent in low-skilled jobs.

The Code on Social Security, 2020, provides for the establishment of social security measures for gig and platform workers, addressing issues related to life and disability coverage, accident insurance, health and maternity benefits, and old-age protection. It also proposes to establish a Social Security Fund to finance welfare schemes and mandates the registration of unorganised workers, gig workers, and platform workers. However, the provisions of the code are yet to be implemented.

Also, read: Gig workforce to expand to 23.5 million by 2029–30, says Economic Survey