What the court actually ordered
On July 28, 2026, Justice Suraj Govindaraj of the Karnataka High Court issued notice to the Union government, the Karnataka government, and the Karnataka Platform-Based Gig Workers Welfare Board on a petition by Uber challenging the constitutional validity of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 (Bar and Bench, July 29, 2026). Uber wasn't asking for a blank check. The court extended to Uber the same interim protection already granted to other petitioners in connected cases — protection from coercive enforcement conditioned on depositing its disputed welfare-fee contribution with the court registry within three weeks, rather than paying the state directly (LiveLaw, July 2026).
Uber is a late entrant to a queue that already includes Swiggy, Zomato, Zepto, Urban Company, and Valmo Transportation, all of whom Justice M. Nagaprasanna ordered on July 4, 2026 to escrow their disputed fees within three weeks while litigation proceeds, with the state barred from coercive action so long as they comply (Business Today, July 4, 2026). Uber's petition has been tagged with those pending matters, and the state and Board now have until August 24 to respond.
The law aggregators are fighting
The Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025 began life as a May 2025 ordinance, moved through draft rules that July, and was introduced as a bill to the Legislative Assembly on August 12, 2025 (PRS Legislative Research). It creates a welfare board — the state Labour Minister, government secretaries, a CEO, four gig-worker representatives, four aggregator representatives, and two civil-society members — funded by a per-transaction welfare fee on aggregators, worker contributions, and government grants. Under the rules now in force, ride-hailing platforms owe a flat fee per trip — 50 paise for two-wheelers, 75 paise for auto-rickshaws, and ₹1 for four-wheelers — while food and grocery delivery platforms owe an additional 1% levy on worker payouts (Business Today). Missed payments accrue interest at 12% per annum, and other violations carry fines from ₹5,000 to ₹1 lakh (PRS Legislative Research). The underlying bill text is on the record with the Karnataka Legislative Council (Karnataka Legislature).
The case for the law, stated fairly
Karnataka's law answers a real gap. India's Code on Social Security, 2020 promised gig and platform workers welfare coverage but left implementation to rules the Union government has been slow to notify five years on. Meanwhile gig work in Karnataka's cities has scaled fast, and delivery and ride-hail workers carry the accident, health, and old-age risk of full-time employment without any of its protections. A per-transaction fee spread across hundreds of millions of rides is a genuinely modest ask if it funds real insurance and pension access, and Karnataka is not alone — Rajasthan, Bihar, and Telangana have passed comparable statutes, suggesting a considered, not opportunistic, state-level response to a national policy vacuum. As the Economic and Political Weekly has noted, the deeper risk with a levy like this is that platforms simply pass it through to workers via lower per-ride payouts or to consumers via higher prices, and that compliance costs disadvantage smaller aggregators, entrenching the incumbents the law is meant to check (EPW) — a caution regulators should take seriously, not evidence the law is illegitimate.
Why the challenge still deserves to be heard
But Uber and the Internet and Mobile Association of India aren't merely disputing the fee's size — they're raising Article 254 of the Constitution, arguing Karnataka's law duplicates obligations Parliament already occupies through the Code on Social Security, 2020, and that a state cannot layer a second, inconsistent welfare-fee regime on top of a central one without express Presidential assent (Business Today). That is a genuine, and unresolved, constitutional question — not a delay tactic. Five states running five different fee schedules, board structures, and registration timelines is precisely the kind of compliance fragmentation that raises costs disproportionately for smaller aggregators and drags on precisely the platforms that most need scale economics to survive thin margins on food and ride-hailing.
What proportionate regulation looks like here
The Karnataka High Court has so far taken the sensible middle path: it hasn't stayed the law, but it also hasn't let the state seize disputed funds while the repugnancy question is unresolved. Escrowing welfare fees with the court, rather than either blocking collection outright or letting the state spend disputed money before the constitutional question is settled, protects workers' eventual claim to the fund without prejudging the federalism fight. The right outcome isn't for courts to strike down worker welfare protections — it's for Delhi to finally notify the Code on Social Security rules it promised in 2020, giving states a single national floor to build on rather than a patchwork Uber, Swiggy, and every other platform now has to litigate state by state.