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7mo ago

India Brings Gig Workers Into Social Security as New Labour Codes Take Effect

Brokerages peg a roughly Rs 1–3 per‑order hit that platforms say is manageable.

Swiggy and Zomato delivery boys take rest near the closed restaurants in DLF Phase III, Gurugram on the outskirts of New Delhi, India on 05 April 2020. To combat the spread of deadly COVID-19, PM of India Narendra Modi has recently announced a 21-day lockdown. However, the curfew-like situation has forced migrant workers to return to their homes when traffic is entirely off the roads apart from the railway and air traffic. So much so, many workers are left stranded with no food, shelter and other necessities. The lockdown has also enforced multi-national companies to fire thousands of employees amid the Coronavirus pandemic (Photo by Nasir Kachroo/NurPhoto via Getty Images)
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Overview

  • Effective November 21, the Code on Social Security formally defines gig, platform and aggregator roles and requires aggregators to contribute 1–2% of annual turnover to a fund, capped at 5% of payouts to such workers.
  • Shares of platform companies fell in early trade on November 24, then stabilised, with Swiggy closing up about 5% and Eternal (Zomato, Blinkit) ending slightly lower after brokerages reassured investors.
  • Analysts estimate per‑order contributions of about Rs 1–2 for food delivery and Rs 4–9 for quick commerce at Eternal and Swiggy, while higher‑payout services such as Urban Company could see up to roughly Rs 47 per order at the 5% threshold.
  • Sector‑wide models point to a 4–10% adjusted EBITDA impact, with brokerages expecting costs to be shared across consumers, delivery partners and merchants and partly offset by existing partner benefits.
  • Swiggy and Eternal welcomed the reforms in regulatory filings and signalled limited long‑term disruption, as legal experts note the ultimate effects will depend on central and state scheme design and implementation rules.