Tag: Zomato

India has granted legal status to millions of gig and platform workers under its newly implemented labor laws, marking a milestone for the country’s delivery, ride-hailing and e-commerce workforce — yet with benefits still unclear and platforms beginning to assess their obligations, access to social security remains out of reach.

The recognition stems from the Code on Social Security — one of four labor laws the Indian government brought into effect on Friday — more than five years after the parliament first passed them in 2020. It is the only part of the new framework that addresses gig and platform workers, as the remaining three codes — covering wages, industrial relations, and workplace safety — do not extend minimum earnings, employment protections or working-condition guarantees to this rapidly expanding workforce.

India has one of the world’s largest and fastest-growing gig economies, with industry estimates suggesting that more than 12 million people deliver food, drive ride-hailing cabs, sort e-commerce packages, and perform other on-demand services for digital platforms. The sector has become a critical source of employment, especially for young and migrant workers shut out of formal job markets, and is projected to expand further as companies scale logistics, retail, and hyperlocal delivery.

Companies from Amazon and Walmart-owned Flipkart to Indian quick-delivery apps such as Swiggy, Eternal’s Blinkit, and Zepto, as well as ride-hailing firms including Uber, Ola, and Rapido, rely on gig workers to run their businesses in the South Asian nation — the world’s second-largest internet and smartphone market after China. Yet despite powering some of India’s most valuable tech businesses, most gig workers operate outside traditional labor protections and lack access to basic social security.

The newly implemented labor laws are intended to change that, by defining gig and platform workers in statute and requiring aggregators, such as food-delivery and ride-hailing platforms, to contribute 1–2% of their annual revenue (capped at 5% of payments made to such workers) to a government-managed social security fund. But the details remain murky: what exact benefits will actually be offered, how workers will access them, and how contributions will be tracked across multiple platforms, and when payouts will begin all remain unclear, raising concerns that meaningful protections may take years to materialize.

The Code on Social Security creates a legal framework for gig workers to be covered under schemes such as the Employees’ State Insurance, provident fund, and government-backed insurance. However, the extent of these benefits — including eligibility, contribution levels, and delivery mechanisms — remains unclear and will depend on future rules and scheme notifications.

A key part of the framework is the creation of Social Security Boards at both the central and state levels, tasked with designing and overseeing welfare schemes for gig and platform workers. The central board must include five representatives of gig and platform workers and five representatives of aggregators, all nominated by the government, alongside senior officials, experts, and state representatives, per the Code. But there is little clarity on how decisions will be made, how much influence worker representatives will actually have, or who will ultimately control decisions on funding and benefit delivery.

“We need to wait and see what exactly is in the government’s mind when it comes to implementing the four Codes, and what it hopes to do for gig workers,” said Balaji Parthasarathy, a professor at IIIT Bangalore and principal investigator of the Fairwork India project. “And then we also have to see what the states translate on the ground.”

Parthasarathy noted that because labor policy in India is shared between the federal and state governments — listed in the “concurrent list” of the Indian Constitution — state governments are responsible for designing, notifying, and administering many of the schemes needed to make the Code on Social Security operational for gig workers.

That raises the possibility of uneven access, as some states move quickly to establish social security boards and roll out mechanisms, while others delay or deprioritize the effort due to political or fiscal constraints. Recent examples — such as Rajasthan’s stalled legislation after it was passed in 2023, and Karnataka’s Gig Workers Act, which was implemented soon after clearing the state assembly — underscore how workers’ protections may ultimately depend on where they live rather than the law itself.

Platform companies have publicly welcomed the reform, but are still largely evaluating what it will require of them. An Amazon India spokesperson told TechCrunch the company supports the Indian government’s intent behind the labor overhaul and is evaluating the changes it will need to introduce. A spokesperson for Zepto said the company welcomes the new labor codes as “a big step toward clearer, simpler rules that protect workers while supporting ease of doing business,” adding that the changes will help strengthen social security for its delivery partners without undermining the flexibility that quick-commerce operations rely on.

Food delivery firm Eternal, formerly known as Zomato, said in a stock exchange filing that the Social Security Code is a step toward more uniform rules and that it does not expect the financial impact to threaten its long-term business.

Nonetheless, Aprajita Rana, a partner at corporate law firm AZB & Partners, said the change “will naturally have a financial impact” on India’s e-commerce sector, as worker contributions are now being formalized. It will also create new compliance obligations, requiring companies to ensure all workers in their networks are registered with the government-managed fund, determine whether individuals are associated with multiple aggregators and how to avoid duplicative benefits, and set up internal grievance mechanisms.

“While the law has the right intent, gig worker structures in India are quite novel, and practical challenges in compliance will emerge as the law takes force,” Rana told TechCrunch.

One of the biggest hurdles for gig workers seeking benefits under the newly implemented law will be registering on the Indian government’s E-Shram portal, launched in 2021 as a national database of unorganized workers. The portal had registered more than 300,000 platform workers as of the end of August, even though the government estimates India’s gig workforce at around 10 million. Trade unions, including the Indian Federation of App-Based Transport Workers (IFAT), which has more than 70,000 members, are working to help gig workers enroll so they can access the benefits.

Ambika Tandon, a PhD candidate at the University of Cambridge and an affiliate of the national trade union Centre of Indian Trade Unions (CITU), said registering on the portal could mean lost wages for gig workers, since they would have to take time off to fill in required details.

“These workers work for 16 hours a day,” she told TechCrunch. “They don’t have time to go and register themselves on the government portal.”

CITU is also among the ten major Indian trade unions calling for the withdrawal of the new labor laws, ahead of nationwide protests planned for Wednesday.

The benefits of registering on the E-Shram portal are not compelling for many gig workers, Tandon noted, because the law does not address more immediate concerns such as fluctuating earnings, account suspensions, and sudden termination of accounts — issues that workers say matter far more right now than access to insurance or provident fund benefits.

Trade unions often organize strikes to push platforms to address these concerns directly. However, such actions can disrupt everyone involved, including consumers, and put workers at further risk, as they are not paid while striking and may even face termination for participating.

“While the social security rules have now been put in place, we demand a minimum wage and an employer–employee relationship for gig and platform workers, which are yet to be set by the government,” said Shaik Salauddin, founder president of the Telangana Gig and Platform Workers Union (TGPWU), which has more than 10,000 members in the southern state of Telangana, and national general secretary of IFAT. “We urge the government to obtain data from aggregators and secure their monetary contributions to the fund to start offering benefits to workers.”

There is a broader debate over whether gig workers should be treated as employees — a question the new labor laws do not address. The Social Security Code defines gig and platform workers as a separate category, rather than extending them the rights and protections that come with employee status. In contrast, courts and regulators in markets such as the U.K., Spain, and New Zealand have moved toward recognizing platform workers as employees or “workers,” entitled to minimum wages, paid leave, and other benefits. In some U.S. jurisdictions, regulators and courts have pushed for platform workers to be treated as employees or similarly protected workers, though many ride-hail and delivery drivers remain classified as independent contractors.

“With this law, the Indian government has settled this debate by saying that these gig workers do not sit within the ambit of employment or other protections,” Tandon said.

The Indian labor ministry did not respond to a request for comment.