Karnataka HC refuses to stay Gig Workers Act, orders Swiggy, Zepto, Eternal to deposit welfare fees
The Karnataka High Court declined to halt the state's Gig Workers Act, directing platforms including Swiggy, Zepto, Eternal and Urban Company to deposit welfare levies with the court registry within three weeks. Fees run up to Rs 1/ride plus a 1% levy on food and grocery deliveries. Next hearing August 14, 2026.
What happened
Karnataka HC refused to stay the state's Gig Workers Act, directing Swiggy, Zepto, Eternal and Urban Company to deposit welfare fees (up to Rs 1/ride plus 1% on
Key facts
- 50 paise per ride two-wheelers
- 75 paise three-wheelers
- Rs 1 four-wheelers
- 1% levy on food and grocery deliveries
- 3 weeks deposit deadline
Why this matters
Treat this Karnataka precedent as a template for state-level gig welfare levies nationwide and factor recurring compliance costs into any platform M&A or partnership valuation.
What to watch
- Aug 14, 2026 next hearing outcome and any interim relief
- Whether Swiggy/Zepto/Eternal actually deposit within the 3-week window or seek extension
- Consumer-facing surcharge line items appearing in Karnataka app checkouts
- Other states announcing or activating gig welfare cess
- Eternal (Zomato) and Swiggy earnings commentary on levy provisioning and regional margin impact
- Platforms deposit welfare levies with registry under protest while filing appeal/SLP
- Introduce or raise a 'platform/handling fee' on Karnataka orders to recover the 1% + Rs 1 charge
- Model Karnataka GMV exposure and disclose provisioning in next quarterly earnings
- Industry bodies (NASSCOM/food-delivery associations) lobby for uniform national gig framework to pre-empt state fragmentation