In today’s Finshots, we dive into Karnataka’s Draft Gig Workers Bill and see if it can really tackle the challenges gig workers face in the state.

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The Story

Meet Rakesh, a delivery partner with one of India’s top food delivery platforms. This chap is literally a machine, pulling off 100 deliveries a week and 14-hour days. His hustle earned him a gold-level rating, unlocking some sweet perks. For context, some food delivery companies have a ranking system split into gold, silver and bronze, based on how much and how well their delivery partners work. When their ratings go up, so do their perks. And for Rakesh, that translated into a company-sponsored health insurance policy for him and his family.

But then, out of nowhere, Rakesh’s wife got really sick. He had to take time off work. And bam! His ratings tanked. See, these platforms use automated systems to monitor everything — work hours, earnings, customer feedback, you name it. So, when Rakesh wasn’t working, his rating dropped like a rock. And with that, he lost his insurance benefits and ended up paying over ₹1,00,000 for his wife’s hospitalisation out of pocket.

And this isn’t just a story. It’s a real slice of life for gig workers, reported by Rest of World. It gives you a peek into the grind gig workers face ― long hours, low pay and no one to back them up when things go south.

That’s why Karnataka, following Rajasthan’s lead, has stepped up with a proposal to discuss a Bill to support gig workers’ rights.

And it has some great stuff. Gig workers will be formally registered, making it easier to keep track of their rights and benefits.

There are measures to address grievances, ensuring workers have a voice. Worker contracts must be in simple language, and companies have to give 14 days’ notice before making any changes. Plus, gig workers’ pay is being protected by requiring companies to explain any deductions.

A Welfare Board will be set up with two representatives from the gig workers’ community, so they can voice their concerns directly. There’s also a plan to create a welfare fund to support gig workers.

But do these proposals mean that the Bill will solve all the problems gig workers face?

Not really. Despite good intentions, the Bill has some basic flaws that make it tough to implement effectively.

First off, there’s the issue of classifying gig workers as independent contractors instead of employees. The Bill uses the term ‘aggregator’ for app companies instead of ‘employer’. This means that there’s no formal employer-employee relationship, which is crucial for enforcing labour laws like minimum wage, safety while at work, working hours, leave entitlements or other benefits such as insurance. And this issue mirrors what we saw in Rajasthan’s recent Act for gig workers.

You could argue this is because gig workers are more like freelancers than regular employees.

But, it’s not like this problem is unsolvable.

Look at places like California, the UK and the Netherlands. These countries have acknowledged the misclassification of gig workers and reclassified them as employees. And courts there have stressed how much control platforms have over workers, arguing that gig workers deserve the same protections as traditional employees.

Then there’s the issue of ambiguity in the way the Bill is drafted.

Sometimes gig workers might want to turn down certain work orders because they don’t pay enough. Maybe the fuel cost is higher than what they’d earn. Or, like our friend Rakesh, they might have to miss work due to health issues — either their own or their family’s. In such cases, platforms might penalise them by lowering their ratings or stripping away benefits they were previously entitled to.

And the Bill tries to tackle this by stating that workers can “refuse or reject, with reasonable cause” work requests without facing penalties.

But here’s the kicker. The term “reasonable cause” isn’t really defined. And that can make this clause sound pretty vague.

Then there’s the whole ambiguity around the welfare fund. The goal is to establish a fund funded by a welfare fee, which could be based on either the earnings of gig workers per transaction or the overall turnover of the aggregators. But this could mean two things.

First, the aggregators themselves might have to chip in, which could hurt their profit margins. Plus, it would be a double hit because the Code on Social Security (CoSS), passed by the Union government in 2020, already requires aggregator companies to contribute 1-2% of their annual turnover to a central social security fund for gig workers. Although this framework hasn’t kicked in yet, we could see a clash between central and state laws, leading to a double whammy for these companies.

Second, since it’s not clear who exactly should pay this welfare fee, aggregators might just pass the cost onto customers. Sure, people who use delivery services because they’re busy or impatient might not mind paying a bit extra. But generally, higher costs could dampen demand and hurt revenues. And if that happens, aggregators might end up deducting these welfare payments from the gig workers’ pay. And that would be really tough on the workers.

Despite focusing on gig workers’ rights, the biggest miss in the Bill is defining the responsibilities of aggregators.

For example, it’s not uncommon for gig workers to face inappropriate behaviour from customers. And while aggregators are quick to resolve customer complaints, they often overlook the needs of their workers.

Including formal contracts with clear terms and conditions, respecting delivery partners and warning against customer misconduct when ratings drop could really make a difference.

Besides, workers often struggle to find time for food breaks or even access to toilets. But ensuring this is not just the aggregators’ responsibility, it’s also the government’s.

Think about it. Gig workers are constantly on the move. When they need a restroom break, they often have to hunt for a nearby public toilet or mall.

And let’s face it, public toilets in India often don’t meet basic standards. Take Hyderabad, for instance — just 1 public toilet for every 10,000 citizens, with 70% of coin-operated toilets out of order due to poor maintenance.

Now, you might say that this is a Karnataka-specific Bill, but there isn’t enough data on toilet density across the state that can prove this point. But recent figures for the state’s capital city, Bengaluru, just might. To put things into perspective, the city only has 5 public toilets per 100 km of road, much lower than Chennai or Ahmedabad, which have 25 and 15 toilets respectively per 100 km. So you can imagine what a struggle that could be for gig workers.

And remember those smart toilets some cities like Mangaluru introduced? They’re practically forgotten now because they’re poorly maintained or unhygienic.

So the state government needs to step up and take responsibility for these basic amenities too.

And finally, there’s the big question ― Will this Bill actually be enforced after all the discussions, or will the buzz fade away with a change in government?

We say this because, like we mentioned earlier, last year, Rajasthan introduced the Rajasthan Platform Based Gig Workers Bill, becoming the first state to do so. The Bill was introduced when the Congress party was in power. But when the BJP took over in the state, the Act was simply put on hold.

Could Karnataka’s Bill end up getting caught in a political tug-of-war, where it’s pushed aside or changed whenever a new party comes into power?

We hope not. But only time will tell.

Until then…

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