Explained: What new labour codes mean for gig workers and why apps like Swiggy and Eternal may pass on cost to consumers

India's 40 crore+ gig workers are set to receive legal recognition with the government  implementing all four new labour codes, including the Code on Social Security (CoSS) 2020. This brings gig and platform workers under a formal social-security framework for the first time, marking a major structural shift for India’s expanding gig economy, covering food-delivery, quick-commerce, ride-hailing, e-commerce and home-services platforms.

The new codes define “gig work”, “platform work” and “aggregators”, for the first time giving delivery partners, drivers and service workers formal worker status outside a traditional employer-employee relationship. Gig workers are individuals who work independently, while platform workers provide services through online applications. Online aggregators are defined as platforms that connect a service provider to the customer.

Under the Code on Social Security, eligible workers will receive access to life, accident and disability insurance, health cover, maternity benefits, pension or old-age protection, and financial assistance, including skill-development schemes. An Aadhaar-linked Universal Account Number will allow them to access benefits across states and platforms. A dedicated social-security fund, financed by governments, platform companies and CSR contributions, will be used to roll out schemes through state welfare boards.

The code mandates that aggregators contribute 1-2% of their annual turnover to the social-security fund, capped at 5% of payouts made to delivery partners or service workers. The new framework applies to major platforms and apps including Swiggy, Instamart, Zomato, Blinkit, Zepto, Amazon, Flipkart, Urban Company, Ola, Uber, Rapido, Meesho and others providing services through digital platforms.

Brokerage estimates indicate this could raise costs for food-delivery and quick-commerce companies by ₹2-₹3 per order, translating to an incremental burden of ₹150-₹200 crore on GMV for larger players.

"Based on rough estimates, we see a gross impact of 4-10% of adjusted EBITDA on a steady-state basis for food delivery, quick commerce, online home and beauty services categories," Morgan Stanley said in a note.

Elara Securities said that any development towards monetary benefits for gig workers will result in short-term demand challenges till the customer adapts. Analysts note that Eternal (Zomato + Blinkit) and Swiggy already spend around 1% of revenue on partner benefits such as accident and health insurance.

Large platform companies have welcomed the implementation, while noting that detailed financial implications will become clear once the government notifies specific rules and schemes.

Swiggy said it does not anticipate any material long-term impact on business sustainability or cost structure, adding that it already extends accidental insurance, health-insurance access, maternity benefits and welfare programmes at no cost to delivery partners. The company said it is strengthening internal systems to integrate future compliance requirements.

Eternal called the consolidation of 29 laws into four labour codes “a major systems reform”, stating that it has been planning for social-security contributions and does not expect any detrimental long-term financial impact. The company said it already offers comprehensive insurance and welfare benefits to gig workers free of cost.

A Rapido spokesperson said, “We welcome this progressive step that recognises how India’s work ecosystem has evolved. Strengthening social security for gig and platform workers is vital for long-term resilience and inclusion. The notification has just been released, and we are reviewing it to understand its implications.”

Flipkart Group’s Chief Corporate Affairs Officer, Rajneesh Kumar, said the new codes provide a clearer and more predictable framework for businesses and workers. “We are reviewing the notification and will remain fully compliant with all requirements,” he said.

An Uber spokesperson stated: “Uber welcomes the government’s move to implement the new labour codes, including the Code on Social Security. Uber looks forward to working closely with the government to ensure the speedy and effective implementation of these reforms.”

Analysts say most platforms are expected to pass on the remaining costs, given the thin-margin nature of these businesses.

Consumers may see a marginal rise of ₹2–₹3 per online order, likely added to existing platform, handling or convenience fees. Analysts expect the impact on demand to be limited in the medium term, noting that platform-fee revisions in the past have not significantly affected order volumes until now.

The government will now draft and notify detailed rules, schemes and standards in consultation with companies, worker groups and state governments. During the transition, provisions of existing labour laws will continue to apply.

The implementation formalises social-security access for millions of gig and platform workers, while introducing additional compliance requirements for leading digital platforms and modest price adjustments for consumers.

This has been a long-standing demand of gig workers across the country, most of who have often complained of long working hours, limited benefits and not enough income.

Shaik Salauddin, co-founder and national general secretary of the Indian Federation of App-Based Transport Workers (IFAT) said this will finally ensure gig and platform workers receive the protections and social security they rightfully deserve.

"IFAT believes that genuine reform can only be achieved through collaboration, transparency, and active worker participation. We look forward to constructive engagement with policymakers and platform companies to build a future where gig and platform workers have access to fair and dignified working conditions, social security and welfare protections, effective grievance redressal mechanisms and legal recognition as part of India’s formal workforce," he said in a statement.