Tech Startups Raise Concerns Over Karnataka's Proposed Gig Workers Bill

Bengaluru, Jul 15 (KNN) A coalition of prominent tech startups and unicorns has voiced "serious concerns" regarding Karnataka's proposed Platform-Based Gig Workers Bill, warning that it could hinder business operations and increase regulatory burdens in the emerging gig economy.

The group, including companies like Swiggy, Ola, Zomato, Uber, and Amazon, submitted their concerns through industry bodies such as CII, Nasscom, and IAMAI.

The draft bill aims to provide formal rights and social security for gig workers, including cab drivers, delivery personnel, and service providers. However, startups argue that the bill grants excessive inspection powers to the state government, potentially reverting to an "Inspector Raj" system. This approach, they claim, goes against the spirit of ease of doing business and could harm Karnataka's reputation as a progressive state and startup hub.

Unlike similar legislation in Rajasthan, the Karnataka bill allows gig workers to seek redressal under the Industrial Disputes Act, effectively equating them with traditional employees. This deviation from recognising gig workers as being outside the traditional employer-employee relationship has raised concerns among the tech companies.

The proposed personal liability for company directors and employees in case of offenses is seen as overly harsh and potentially deterring businesses. Industry representatives argue that this approach could breed mistrust with the industry and goes against the current push for decriminalisation in labor laws.

Concerns were also raised about provisions allowing state intervention in business operations, including mandating notice periods and regulating order cancellations. The tech companies view these as direct attempts to dictate how they operate their businesses, which may not consider sector-specific nuances.

The requirement to share proprietary algorithm information and integrate with a central transaction system is viewed as burdensome and potentially compromising competitive advantages.

The group argues that such information is confidential and provides a competitive edge for each platform, and sharing it without adequate safeguards could be detrimental to their businesses.

To address some of these issues, the group recommended capping the proposed welfare fee at 1-2 per cent of worker payouts or state-specific net revenue, with a maximum of Rs 1-2 per transaction.

They argue that anything higher would be burdensome on platforms and may need to be passed on to customers or gig workers, which would be counterproductive.

Industry executives warn that the bill, if passed in its current form, could damage Karnataka's reputation as a startup hub and hamper ease of doing business in the state.

The bill is expected to be tabled during the upcoming monsoon session of the Karnataka Assembly, and the tech industry is hoping for revisions that address their concerns before it becomes law.

(KNN Bureau)