A Second Company Gets the Same Lifeline
On July 28, 2026, the Karnataka High Court issued notice on a petition by Uber India Systems Private Limited challenging the constitutional validity of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 and its Rules. Justice Suraj Govindaraj extended to Uber the same interim arrangement an earlier coordinate bench had granted on July 3 to Zomato (Eternal Ltd.), Swiggy, Blinkit and Zepto: deposit the disputed welfare fee with the Court Registry each quarter, and the state cannot take coercive action to recover it directly (LiveLaw; Bar and Bench). Uber's core claim, like the earlier IAMAI-led petition, is that the state law is repugnant to the Centre's Code on Social Security, 2020 under Article 254 of the Constitution.
The Case Karnataka Can Fairly Make
Before dismissing the state's law, it's worth stating its logic plainly. Gig and platform work in India spent years in a regulatory vacuum: no employer-employee relationship, no ESI, no PF, no accident cover, for a workforce doing physically risky, income-volatile work. Parliament passed the Code on Social Security in September 2020, but it sat un-notified for five years while gig workers had literally nothing. Rajasthan moved first in 2023 with its own platform-worker welfare Act; Karnataka followed, promulgating an ordinance in May 2025 and introducing the Bill in its Legislative Assembly on August 12, 2025 (PRS Legislative Research). The Karnataka Act created a tripartite welfare board, mandatory worker and aggregator registration, and a welfare fee funded entirely by platforms — not deducted from worker payouts. States filling a five-year vacuum with worker protections is a defensible use of the concurrent list, not regulatory overreach on its face.
Why the Timing Now Cuts Against That Defense
The problem is that the vacuum Karnataka was filling has closed. The Union government notified S.O. 5319(E) bringing the bulk of the Code on Social Security — including its gig and platform worker provisions — into force from November 21, 2025 (Bombay Chamber of Commerce), followed by the Code on Social Security (Central) Rules in May 2026. Article 254 repugnancy analysis turns on whether a state law occupies a field the Centre has actually entered, not one it merely legislated for on paper. When Karnataka's Act was drafted in 2025, the central Code was a dead letter — a weak repugnancy target. By the time Uber's petition reached the High Court in July 2026, the central Code was live, with its own aggregator-funded Social Security Fund and e-Shram registration architecture running in parallel to Karnataka's welfare board. That is precisely the scenario Article 254 exists to resolve, and it is a materially stronger case for the platforms than the one Zomato and Swiggy argued in the spring.
Two Levies, Two Registrars, One Set of Riders Paying for Both
Set the constitutional question aside and the compliance picture alone justifies scrutiny. Karnataka's Act authorizes a welfare fee of 1–5% on aggregator payouts to gig workers; the government's first notification, effective February 13, 2026, set an initial rate of roughly 1% with per-transaction rupee caps that vary by vehicle and service category (SCC Online). Aggregators must self-declare and remit quarterly, register within 45 days, and feed worker data into a Karnataka-specific database — on top of whatever the central Code's own e-Shram registration and contribution regime now requires. Rajasthan, Telangana, Jharkhand and Bihar have each floated or enacted their own variants. A national platform operating in a dozen states could, in the worst case, be reconciling a dozen different levy formulas, deposit schedules and worker databases against a thirteenth, central one — a compliance tax that scales with geography rather than risk, and one that ultimately shows up in rider fares, driver incentives, or slower platform expansion into smaller Karnataka towns where gig work is often the only formal-sector option available.
The Fix Doesn't Require Choosing Sides
None of this means gig workers don't need the protection Karnataka is trying to provide — accident cover, transparent fee structures and a grievance mechanism for a workforce excluded from the Industrial Disputes Act are reasonable asks. But the answer to overlapping regimes is harmonization, not litigation-by-attrition with money sitting idle in a court registry instead of reaching a single worker. The cleanest outcome would have the Karnataka Welfare Board operate as a state-level delivery arm of the central Code's Social Security Fund — one registration, one levy, state-level disbursement — rather than a second parallel cess. Until the High Court rules on repugnancy, or the Centre and states negotiate a harmonized model, platforms are stuck funding two social security regimes for the same worker, and the workers the law is meant to help are the ones actually waiting.