Karnataka High Court Issues Notice on Uber India Challenge to Gig Workers Social Security Law

The Karnataka High Court has issued notice on a petition filed by Uber India Systems Private Limited challenging the constitutional validity of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025. Justice Suraj Govindaraj, hearing the matter on July 28, 2026, extended to Uber the benefit of an interim arrangement made earlier by a coordinate bench: platform aggregators were directed to deposit the welfare fee with the Court Registry and were granted protection from coercive action upon making such deposits. The next hearing is scheduled for August 14, 2026.

What Is the Karnataka Gig Workers Act 2025?

The Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, is a state legislation aimed at providing social security protections to gig and platform workers in the state. The Act creates a Gig Workers Welfare Board, empowers platforms to establish Internal Dispute Resolution Committees (IDRCs), requires platforms to provide reasons before deactivating workers, and imposes a welfare fee on each transaction. The welfare fee is capped at 50 paise per ride for two-wheelers, 75 paise for three-wheelers, and Rs 1 for four-wheelers, along with a 1% levy on food and grocery deliveries. Karnataka is the first Indian state to enact such a comprehensive law for gig workers.

The Constitutional Challenge: Article 254 and Repugnancy

Uber's petition invokes the doctrine of repugnancy under Article 254 of the Constitution. Article 254(1) provides that if a state law is repugnant to a central law on the same subject in the Concurrent List, the central law prevails and the state law is void to the extent of the repugnancy. Uber argues that Parliament has already occupied the field through the Code on Social Security, 2020, which establishes a national framework for gig and platform workers, covering their identification, welfare schemes, and aggregator contributions. The central labour codes, according to Uber, leave no room for a parallel state regime.

The Broader Industry Challenge

Uber is not alone in challenging the Act. Earlier, in June 2026, the Internet and Mobile Association of India (IAMAI), along with Swiggy, Zepto, Zomato, Urban Company, and Rapido, filed a separate writ petition before the same High Court. That batch of petitions was heard by Justice M. Nagaprasanna, who refused to stay the Act but directed the platforms to deposit their second-quarter welfare fees with the Court Registry within three weeks. Justice Nagaprasanna also ordered that no coercive action be taken against the platforms until the next hearing date. The Court directed that Uber's petition be tagged with this pending batch.

The Code on Social Security 2020 vs. the Karnataka Act

The Code on Social Security, 2020, is one of the four labour codes enacted by Parliament to consolidate and reform India's labour laws. It specifically defines "gig workers" and "platform workers" and provides for a National Social Security Board and state-level boards to recommend welfare schemes. The Code also empowers the Centre to frame schemes for gig workers funded by contributions from aggregators. The eShram registration deadline for platform aggregators under the Code underscores that the central framework is actively being implemented. However, the Karnataka Act goes significantly further by creating specific fee structures, dispute resolution mechanisms, and deactivation protections that are not present in the central Code.

Implications for Gig Workers and Platforms

The outcome of this case could reshape the regulatory landscape for India's gig economy, which employs an estimated 7.7 million workers across food delivery, ride-hailing, and logistics platforms. If the Karnataka Act is upheld, it could serve as a model for other states. If struck down on repugnancy grounds, it would reinforce the Centre's exclusive domain over gig worker welfare through the Code on Social Security 2020. The implementation of the four labour codes has been a key development for Indian employment law in 2026.

The Interim Arrangement: Deposits with Court Registry

The Court's interim order is notable for the balance it strikes. Rather than staying the Act entirely (which would deprive gig workers of the welfare fund) or enforcing it fully (which the platforms claim would cause irreparable financial harm), the Court directed platforms to deposit the welfare fee with the Court Registry. This ensures that funds are collected and preserved while the constitutional validity of the Act is decided. If the Act is ultimately upheld, the funds can be transferred to the Welfare Board. If struck down, they can be returned to the platforms. This approach also ensures that platforms such as Uber do not gain a competitive advantage by refusing to comply while other platforms deposit the fee. Employers should also note the recent Code on Wages (Central) Rules 2026 which have also come into effect.

Key Takeaways

1. The Karnataka High Court has issued notice on Uber India's challenge to the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025, and tagged it with the pending batch of petitions by Swiggy, Zomato, Zepto, and IAMAI.

2. The core legal challenge invokes Article 254 of the Constitution, arguing that the state Act is repugnant to the Centre's Code on Social Security, 2020, which already provides a framework for gig worker welfare.

3. Platforms must deposit the welfare fee with the Court Registry as an interim measure; no coercive action will be taken against compliant platforms until August 14, 2026.

4. The welfare fee under the Act is capped at modest amounts (50 paise to Rs 1 per ride, 1% on food and grocery deliveries), making the financial burden relatively low per transaction.

5. The ruling will have national significance: if the Karnataka Act is upheld, other states may enact similar laws; if struck down, the Centre's EPF Scheme 2026 under the Code on Social Security will remain the exclusive framework for gig worker welfare.

6. Gig workers who face algorithmic deactivation without reasons should be aware that the Karnataka Act, if upheld, would require platforms to provide written reasons, creating a new layer of employment protection for platform-based workers.