Uber India has approached the Karnataka High Court, challenging the constitutional validity of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025. The company seeks interim relief from the Act's provisions, which mandate welfare contributions for gig workers. The court has issued a notice to the state government regarding this petition.
The Karnataka Platform-Based Gig Workers Act, enacted in 2025, requires platform-based aggregators to contribute a welfare fee for each ride or delivery undertaken by gig workers. The fee is set at 50 paise for two-wheeler rides, 75 paise for three-wheelers, and Re 1 for four-wheelers. This contribution is intended to fund a welfare scheme for gig workers in the state.
Uber's petition challenges the Act's constitutional validity, arguing that it encroaches upon the domain already covered by the central Code on Social Security, 2020. The company contends that the state law is repugnant to the central legislation and, therefore, unconstitutional.
The Karnataka High Court has issued a notice to the state government regarding Uber's petition. The court has also directed Uber to deposit the disputed welfare fee for the second quarter with the court registry within three weeks. This interim arrangement is similar to the one previously granted to other platform-based aggregators challenging the Act.
The outcome of this legal challenge could have significant implications for gig economy companies operating in Karnataka. A ruling in favor of Uber could lead to a reassessment of the Act's provisions, potentially affecting the welfare contributions required from platform-based aggregators. Conversely, a ruling against Uber could reinforce the Act's implementation, impacting how companies like Uber manage their operations and financial obligations in the state.
As the legal proceedings unfold, stakeholders in the gig economy are closely monitoring the situation. The final decision of the Karnataka High Court will provide clarity on the constitutional validity of the Act and its enforceability, influencing the regulatory landscape for gig workers and the companies that engage them.