Sun Aug 03 19:02:00 UTC 2025: Here’s a summary and rewrite of the text as a news article:

**Summary:**

A new ordinance in Karnataka, India, aims to provide social security for gig workers. However, concerns are being raised about the proposed calculation of the welfare cess, a fee designed to fund this social security. The ordinance defines the cess as a percentage of the “payout” from the platform to the gig worker, which could result in a lower cess than the minimum required by central government guidelines. Experts point out that a 1% cess on “payout” is less than a 1% cess on turnover. Moreover, the rise of subscription-based models in the ride-hailing sector, where platforms may not directly pay drivers, poses further challenges to the ordinance’s effectiveness. The article suggests alternative solutions, such as building the cess into the customer fee for subscription-based services. It emphasizes the need for sector-specific calibration of cess rates to ensure adequate social security for gig workers.

**News Article:**

**Karnataka Gig Worker Welfare Ordinance Faces Scrutiny Over Cess Calculation**

**Bengaluru, August 4, 2025** – A new ordinance aimed at providing social security for gig workers in Karnataka is facing criticism over its proposed method for calculating the welfare cess, a crucial funding mechanism for the initiative. The Karnataka Platform Based Gig Workers (Social Security and Welfare) Ordinance, 2025, has been lauded as a step forward, but experts are raising concerns that the defined calculation could undermine its effectiveness.

The ordinance bases the welfare cess on the “payout” from the platform to the gig worker, stipulating a range of 1-5% of this amount per transaction. Critics argue that this definition, particularly the potential for the cess to gravitate towards the lower 1% bound, could lead to significantly less funding than intended.

“A 1% cess on ‘payout’ is inherently lower than the 1% cess on turnover mandated by the central government’s Social Security Code,” explains Mohan Mani, Visiting Fellow at the National Law School of India University, Bengaluru. “This difference could significantly impact the amount of funds available for gig worker welfare.”

The analysis points to the financial results of companies like Zomato as an example, highlighting that even a 2% cess on payout would barely equal 1% of the company’s turnover.

Furthermore, the rise of subscription-based models, exemplified by Namma Yatri and now adopted by Uber and Ola for autorickshaw services, presents a unique challenge. In these models, platforms may not directly pay drivers, potentially excluding these workers from the welfare scheme entirely.

To address this, the article suggests that, for subscription-based platforms, the cess could be incorporated into the customer fee, ensuring that all transactions contribute to the welfare fund.

“The platform sector is complex, and a one-size-fits-all approach won’t work,” Mani stated. “Cess rates must be carefully calibrated to reflect the specific employment conditions in each sector to guarantee minimum standards of social security for all gig workers.”

The debate surrounding the ordinance highlights the challenges of regulating the rapidly evolving gig economy and ensuring fair protections for its workforce. Further discussion and potential amendments are expected as the ordinance moves towards implementation.

Read More