How could the new social security requirements affect Zomato's operating costs?
Zomato may face increased financial obligations due to new social security mandates The Centre has mandated that aggregators contribute to a Social Security Fund for gig and platform workers under the Code on Social Security, 2020. This requires aggregators to contribute between 1 per cent and 2 per cent of their annual turnover towards social security, subject to a ceiling of 5 per cent of the amount paid or payable to gig and platform workers. While the reports specifically name Zepto, Swiggy, Urban Company, and Rapido as representatives on the new National Social Security Board, the requirement for contribution applies to all aggregators operating under the Code.
- Effect
- Strong negative
- How direct
- Brind's reasoning
- When
- Within months
- The story
- Gone quiet
How it reaches Zomato
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The Centre established National Social Security Boards for unorganised, gig, and platform workers under the Code on Social Security, 2020. These boards are mandated to advise the government on social security measures for these worker categories. The boards have a three-year tenure, and Section 114(6) requires them to discharge functions for gig and platform workers.
The full event1independent outlet -
Swiggy, along with Zepto, Urban Company, and Rapido, is listed as a representative on the board for gig and platform workers. Since Zomato operates in the same food delivery sector and functions as a platform aggregator, the regulatory requirement applies to it. Under the Code on Social Security, aggregators are required to contribute between 1 per cent and 2 per cent of their annual turnover towards social security, subject to a ceiling of 5 per cent of the amount paid or payable to gig and platform workers.
No report states this step directly. Brind drew it from the reporting on each side of it, so treat it as an informed guess.
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Indian food delivery service
Everything about Zomato
Tap any step to see the evidence behind it.
The facts so far
As reported. Each one links to where it comes from.
- The Centre constituted the National Social Security Boards for unorganised workers, and gig and platform workers under the Code on Social Security, 2020 (CSS).business-standard.com
- The board for gig and platform workers includes five representatives from aggregators, namely, Eternal Group, Swiggy, Zepto, Urban Company and Rapido.business-standard.com
- Under the Code, aggregators are required to contribute between 1 per cent and 2 per cent of their annual turnover towards social security.business-standard.com
- The contribution is subject to a ceiling of 5 per cent of the amount paid or payable to gig and platform workers.business-standard.com
Why it matters
The introduction of mandatory social security contributions fundamentally changes the cost structure for all gig economy platforms. For Zomato, this means a new, significant financial obligation tied directly to its operational scale (annual turnover). This requirement is designed to provide life and disability protection, accident insurance, health and maternity benefits, old-age protection, and crèche facilities for gig workers.
This regulatory move is part of a broader national effort to formalize and protect the large segment of unorganised and platform workers in India. The establishment of the National Social Security Boards, with representatives from aggregators, trade unions, and state governments, signals a permanent shift in how the government views and regulates the gig economy sector.
What we don't know yet
- When will the Centre notify the specific rate of contribution and the date from which the provision will come into effect?
- How will the new social security fund be financed beyond contributions from the Centre, state governments, and aggregators?
What would change this answer
Who else could feel it
Other possible ripples from the same event.
Reporting
- business-standard.comOct 30
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Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.