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Business Standard
31-07-2025
- Business
- Business Standard
One Act and 3 Bills on, gig workers say there is progress, but not enough
With the publication of Telangana Gig and Platform Workers (Registration, Social Security and Welfare) Bill, 2025, Telangana is all set to join the list of states with a legislation to ensure social security, and regulate working conditions for gig workers. The only state to currently have a gig workers Act in place is Rajasthan. The state assembly had passed the Rajasthan Platform Based Gig Workers (Registration and Welfare) Act in July 2023. In Karnataka and Jharkhand, the Cabinet has cleared the respective Bills. They are expected to be introduced in the Monsoon session of the assemblies. These developments point to increasing state-level efforts to bring India's gig workers under some form of welfare net. While they see these developments as welcome efforts, gig workers' unions say they are, at the same time, insufficient. For many worker unions, and gig workers themselves, these welfare boards and registration drives are only partial answers to deeper issues of recognition, accountability, and rights. These efforts by states are also seen as a follow-up after the central government introduced the Code on Social Security in 2020, which, for the first time, tried to include gig workers under the legal ambit. Section 2(35) of the Code defines a 'gig worker' as someone who performs tasks or participates in work arrangements and earns from such activities outside of traditional employer-employee relationship. Sunand, president of the Rajdhani App-Based Workers' Union who goes by only his first name, says the state Bills are similar to the social security code. Neither the code nor the Bills, he says, talk about the kind of welfare schemes that will be implemented and where the money for these schemes will come from. For gig workers, fixed working hours, a guarantee of sufficient wages within that period, and ID blocking or termination from work by the platform at will are the most pressing issues. 'Platforms have undue control over workers,' says Sunand. 'These issues of algorithmic control and arbitrary deactivation directly affect workers' livelihoods, yet remain absent from the legal discourse.' Shaik Salauddin, national general secretary of the Indian Federation of App-Based Transport Workers, and president of the Telangana Gig and Platform Workers' Union, also says there are missing links in the Telangana Bill, and the issue of wages are not addressed in it. That said, Salauddin considers the Telangana Bill to be better than others. 'Grievance redressal mechanism is better in this Bill; the time to lodge complaints is mentioned. There is a provision of penalty as well,' says Salauddin. Sunand echoes the same sentiment: 'There is greater government monitoring of platforms in the Telangana and Jharkhand Bills.' Employer-employee relationship at the core The social security code explicitly states that gig workers fall outside of traditional employer-employee relationships. At the heart of the dissatisfaction is this broader structural issue. The unions highlight that none of the Bills consider gig workers as employees of a company. All legislation focuses on welfare boards, registration, and modest benefits such as accident insurance or health schemes. They stop short of challenging the aggregator platforms' insistence that gig workers are 'partners' or 'independent contractors'. 'Gig workers should come under traditional employer-employee relationships, and platforms should work as traditional employers. This is the core problem. Unless this is resolved, other things don't matter,' says Sunand. A traditional employer-employee relationship is a structured, long-term one between the employer and employee, with the employee getting certain benefits such as gratuity and provident fund (PF). Sunand says since governments are not addressing the core problems of wages, working hours and blocking, there has been minimal resistance from the companies, except in Karnataka, where gig workers appear to have been equated with traditional employees. Industry body the National Association of Software and Service Companies (Nasscom) issued a statement highlighting this concern around the Karnataka Bill: 'It assumes gig work to be a part of employer-employee relationship, which risks unsettling the conceptual and legal basis of gig work. This assumption is core of the Bill and basis this, it prescribes several obligations, which may be relevant only in an employer-employee relationship.' Uber, one of the largest players in India's ride-hailing and gig economy sector, said it is engaging with state-level policymakers as new laws take shape. It called for consistency, operational clarity, and inclusivity across the ecosystem in emerging frameworks. 'We look forward to ongoing dialogue with governments at all levels and remain committed to constructive engagement on matters concerning the platform economy,' a spokesperson of the company said. States and gig workers Feature Telangana (draft Bill) Karnataka (draft Bill) Jharkhand (draft Bill) Rajasthan (Act) Definition of gig worker Work arrangement falling outside the traditional employer-employee relationship Work through an online platform, with pay determined by terms and conditions Work falls outside the traditional employer-employee relationship, obtained through an online platform, contractual, piece-rate Work falls outside the traditional employer-employee relationship, obtained through an online platform, contractual, piece-rate Platform worker's definition Persons obtaining work through an online platform No distinction between a gig worker and platform worker No distinction between a gig worker and platform worker No distinction between a gig worker and platform worker Rights Registration, social security schemes, and grievance redressal mechanism Registration, social security schemes, and grievance redressal mechanism Registration, social security schemes, and grievance redressal mechanism Registration, social security schemes, grievance redressal mechanism, participation in board discussions Gig worker registration Self-registration as prescribed. Aggregators provide a database of workers registered with them within 60 days from commencement of the Act Workers must be registered by aggregators within 60 days from commencement of the Act Workers must be registered by aggregators within 60 days from commencement of the Act Workers must be registered by aggregators within 60 days from commencement of the Act Aggregators registration Must register within 45 days from the commencement of the Act Must register within 60 days from commencement of the Act Must register within 60 days from commencement of the Act Must register within 60 days from commencement of the Act Algorithm transparency Aggregators must inform workers about how to access information on automated systems that monitor and affect their work Aggregators must inform workers about: (i) rating systems, (ii) worker classification, (iii) use of personal data, and algorithms affecting work conditions Aggregators must inform workers about: (i) rating systems, (ii) worker classification, (iii) use of personal data, and algorithms affecting work conditions No provision for transparency in automated monitoring and decision-making systems Termination of work Reason for termination must be given in writing, with a seven-day prior notice Reasons must be included in the contract, and a 14-day prior notice Reasons must be included in the contract, and a 14-day prior notice No provision for termination of work Grievance redressal Grievances can be filed via a portal or through an officer. Order within 30 days Grievances can be filed via a portal or an officer. Appeals within 90 days Grievances can be filed via a portal or an officer. Appeals within 90 days Grievances can be filed via a portal or an officer. Appeals within 90 days Welfare fee 1 to 2% of the individual payout to the gig worker, paid by the aggregator quarterly Based on worker pay per transaction or aggregator turnover, paid quarterly Percentage of transaction value, as specified by the state government Percentage of transaction value, as specified by the state government Sources of fund Welfare fund fee, contributions by platform and workers, grants-in-aid from the Centre and state government, CSR fund, grants, gifts, or donations Welfare fee, contributions by platform-based gig workers, grants-in-aid from both central and state government, grants, bequests or transfers Welfare fee, contributions by platform-based gig workers, grants-in-aid from both central and state government, grants, bequests or transfers Welfare fee, grants-in-aid from state government, any other sources Usage of fund Not specified Prescribed by the state government Prescribed by the state government Prescribed by the state government
Mint
06-05-2025
- Business
- Mint
Who pays for cancelled rides? Maharashtra's new cab rules stir industry debate
Maharashtra's new policy for cab aggregators has raised concerns across the ride-hailing ecosystem, particularly over a provision for penalties if a driver cancels a booking. While the policy introduces a penalty of ₹ 100 or 10% of the fare (whichever is lower) to be credited to the rider, it is unclear whether the cost will be borne by the driver or the cab aggregator. In addition to cancellation charges, two other provisions are also expected to spark further debate: the introduction of mandatory meter pricing and a surge pricing cap of 1.5 times the base fare, which could limit driver incentives during high-demand periods such as festivals, peak hours, or adverse weather conditions. The Maharashtra government officially rolled out the Aggregator Cabs Policy 2025 on 1 May, aiming to regulate app-based cab services. The policy was developed following Supreme Court directives urging states to regulate the sector. The rules are expected to be notified later this week, Maharashtra's state officials said. Here's an overview of the provisions that have raised concern among industry players. Industry executives from the ride-hailing industry told Mint that the policy imposes an undue compliance burden on platforms that act purely as intermediaries. Since aggregators do not own vehicle fleets, they argue they lack the control necessary to manage driver behaviour around cancellations. 'Usually, it's the driver cancelling the ride—the platform has no incentive to do that. Aggregators don't own vehicles, so they cannot enforce the kind of control fleet operators can," said an executive from the industry close to the matter. Driver-led unions have also raised concerns that the cancellation clause could shift the financial burden onto drivers. 'Cancellation will likely get pushed onto drivers, further making it difficult for them to sustain their livelihood," said Shaik Salauddin, national general secretary of the Indian Federation of App-Based Transport Workers (IFAT). However, some experts said the policy introduces accountability and may be a step toward greater professionalism in the sector. 'These penalties are expected to go to the aggregators that should further pass on to the drivers, leading to more professionalism in the game. The ultimate beneficiary of this discipline-based structure is going to be the end consumer, which is a welcome move by the government," said Amit Kaushik, managing director at Urban Science, an automotive consultancy firm. Still, concerns persist about implementation. Executives noted that drivers often reject rides informally, forcing users to cancel their trip. 'Drivers can game the system—delay pickups until the customer cancels, for instance. And if I'm a driver facing cancellation penalties, I'd rather switch to a platform that doesn't charge me," said an executive representing the companies, speaking on condition of anonymity. 'Even models like Namma Yatri and Sahakar Taxi should fall under the same compliance lens. You can't regulate one segment while letting others operate freely," they added. While Mint's queries to Uber and Ola did not elicit a response, Rapido said it may remain partly unscathed. Rapido functions as a software-as-a-service (SaaS) provider, charging drivers a one-time subscription fee and taking no commission from fares. As a result, it considers itself a technology provider, not a traditional aggregator. It operates on a model where no commissions are charged from drivers, and 100% of the fare goes directly to the driver's account, 'with no intervention or settlement on the platform," a company spokesperson said. Instead, it charges drivers a one-time software subscription fee, addressing the 'dissatisfaction with high commissions charged by other platforms," the company said. 'This is akin to digitisation of offline negotiation as to an app based negotiation," the company clarified, adding that, "we don't face the problem of ride cancellation from the drivers on Rapido." The model mirrors those of other platforms such as Namma Yatri and inDrive, which also bypass the conventional aggregator structure. Also Read: Uber's lifeline off the table for BluSmart as EV depreciation becomes key contention Industry executives fear that despite the central government's Motor Vehicle Aggregators Guidelines, 2020, state-specific regulations will require aggregators to constantly adjust their software, resulting in a compliance nightmare and increased costs. 'Jurisdictionally, it will be a software nightmare. Each state-specific tweak increases the cost of compliance, which eventually makes the business model unviable. Compliance shouldn't increase to an extent where business models begin to look like charity," said an executive from the ride-hailing industry. Industry players also pointed out that the current regulatory environment may incentivise both drivers and platforms to shift toward Saas-based formats, which are largely exempt from such regulation. 'You now have models like Namma Yatri, Sahakar Taxi, and Rapido. If these continue to grow, drivers will naturally be drawn to them. The question is: Are we unintentionally pushing all aggregators to adopt this format just to avoid compliance?" said another industry official. Also Read: Rapido takes on Ola, Uber with 'low-cost' guarantee airport cab service The provision on surge cap of 1.5 times the base fare which could curb pricing flexibility during high-demand periods is also likely to backfire, experts said. 'Surge isn't just about profits—it's also how you incentivize drivers to respond to demand spikes. If the government itself uses surge pricing in other services, clearly the model has merit," said another executive, representing the companies, speaking on condition of anonymity. Surge pricing, also known as dynamic fare pricing, is implemented by the state-owned Indian Railway Catering and Tourism Corporation (IRCTC) for train tickets during peak times. In regulated industries like airlines, this pricing strategy helps manage demand and optimize service availability. The mandatory meter pricing may not be a feasible model, industry executives said, noting that customers switched to alternative platforms in the first place because traditional models were unreliable. 'Customers jumped to these platforms for two reasons: easier access to cabs and more predictable pricing. While meters are intended to make fares transparent, the lack of other technological innovations (like app-based fare estimates) still leaves consumers with an uncomfortable feeling of fare unpredictability and service availability," said an executive from the ride-hailing industry. Maharashtra state officials maintained that this policy is essential to ensure fare transparency and curb exploitation of riders. They emphasised that these new rules aim to strike a balance between consumer protection and driver welfare, improving service reliability and safety in Maharashtra's fast-growing urban mobility sector. As of now, there is no publicly announced formal feedback window for stakeholders or the public to submit comments on the policy. However, the state transport department has indicated that operational guidelines are being finalised and will be communicated to all stakeholders soon. While Maharashtra's new policy attempts to bring greater accountability and protect consumer interests, the execution will be closely watched, particularly for its impact on driver earnings, platform viability, and the broader future of app-based mobility in India. Also Read | The curious case of Ola's scooter 'sales' without invoices
