IndiaTech pushes for gig worker levy reform, citing inequities in turnover-based system

IndiaTech, an industry association representing major gig economy platforms like Ola, Swiggy, and Zomato, has urged the Union labour ministry to overhaul the method of calculating social security contributions for gig workers. The group argues that the current turnover-based system disproportionately impacts platforms reporting high transaction values as revenue, proposing instead a model tied to payments made to workers.

Proposal to revise social security contributions

According to Mint (Technology), IndiaTech, an industry association representing new-age startups including Ola, Swiggy, Zomato, and Porter, has urged the Union labour ministry to reconsider the method of calculating social security contributions for gig workers. The group argues that linking contributions to annual turnover disproportionately burdens platforms that report the full transaction value as revenue, such as food delivery and e-commerce companies.

In a white paper submitted to the ministry on 29 September, IndiaTech proposed that contributions instead be linked to the amount paid or payable to gig and platform workers. The current system, established under the Code on Social Security, 2020, requires aggregators to contribute 1-2% of their annual turnover toward gig worker social security, with a cap of 5% of the amount paid to workers.

Disparities across business models

The white paper highlights structural inequities in the current system, which treats platforms differently based on their business models. For instance, ride-hailing apps acting as agents record only their commission as revenue, while inventory-led e-commerce platforms report the entire transaction value (GMV) as revenue. IndiaTech’s Chief Operating Officer, Dhiraj Gyani, stated that linking contributions to accounting turnover rather than actual labor utilization creates "profound structural inequities."

Legal experts and labour representatives echo these concerns. Shoubhik Dasgupta, Partner at Pioneer Legal, and Vivek Tewary, Senior Partner at Trust Law, noted that the 5% cap is merely a ceiling and does not address inherent disparities. Shaik Salauddin, Co-founder and National General Secretary of the Indian Federation of App-Based Transport Workers (IFAT), emphasized that logistics and delivery platforms are particularly disadvantaged, describing the cap as "not an equaliser."

The white paper also calls for the Code on Social Security to be updated to include newer business models, such as subscription services and Software-as-a-Service (SaaS) platforms, where customers may pay workers directly.

Gig workforce growth and policy implications

India’s gig workforce is projected to surpass 1 crore in 2024-25 and reach 2.35 crore by 2029-30, according to estimates from NITI Aayog. This rapid growth has intensified scrutiny of the Code on Social Security, 2020, which consolidates existing social-security laws and extends coverage to unorganised, gig, and platform workers. The Code was enacted in September 2020 and implemented on 21 November 2025.

Since the Code does not define "turnover," companies rely on corporate, tax, and accounting standards to interpret the term. This ambiguity has led to calls for clearer guidelines to ensure fairness across sectors, including logistics, ride-hailing, and food delivery.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

For founders in India’s gig economy, this push for policy change underscores the growing tension between regulatory frameworks and diverse business models. The current turnover-based levy may seem straightforward, but it fails to account for how companies like Swiggy or Porter structure their revenue—whether as agents or principals.

If the government adopts IndiaTech’s proposal, it could level the playing field for platforms that rely on high transaction volumes but low margins. However, it also signals that gig economy operators must prepare for potential shifts in compliance costs and pricing strategies. For labour advocates, the debate reveals a deeper question: how to balance worker protections with the sustainability of platform-based businesses. Expect rigorous discussions—and possibly legal challenges—as stakeholders weigh in on what constitutes fair contributions.

Key takeaways

• IndiaTech’s proposal targets a structural issue in the gig economy: linking social security contributions to turnover rather than worker payments.
• The current policy disproportionately impacts platforms that report full transaction value as revenue, such as inventory-led e-commerce companies.
• Growth projections for India’s gig workforce (2.35 crore by 2029-30) amplify the urgency of resolving these policy inequities.
• Experts argue the existing cap on contributions does not address disparities across business models, particularly in logistics and delivery.
• This debate highlights broader challenges in regulating gig work, including defining fair contributions without stifling innovation.

FAQ

Why is IndiaTech pushing for changes to gig worker social security contributions?

IndiaTech argues that the current system, which links contributions to annual turnover, unfairly burdens platforms reporting full transaction value as revenue. These companies, such as food delivery and e-commerce platforms, face higher contributions despite operating on thin margins, creating structural inequities.

How does the current system under the Code on Social Security, 2020, calculate contributions?

The Code requires aggregators to contribute 1-2% of their annual turnover toward gig worker social security, capped at 5% of the amount paid to workers. However, the lack of a clear definition for "turnover" has led to disparities across business models.

What alternative does IndiaTech propose?

IndiaTech proposes linking social security contributions to the amount paid or payable to gig workers, rather than annual turnover. This approach, they argue, would create a fairer system that reflects actual labor utilization.

How might this policy change impact gig economy startups?

If adopted, the change could reduce compliance costs for platforms with high transaction volumes but low margins, such as logistics and delivery companies. However, it may also prompt reviews of pricing strategies and worker payment models to align with the new requirements.

What are the concerns raised by labour unions and experts?

Experts and labour unions warn that the current 5% cap does not address disparities across business models. For example, logistics and delivery platforms may hit the cap faster than ride-hailing apps, putting them at a disadvantage. Unions also emphasize the need for a uniform mechanism that accounts for differences in worker payments.

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