Cab Unions Urge Reconsideration of Proposed GST on Subscription-Based Earnings to Protect Livelihoods
Cab unions across India have strongly opposed the potential imposition of GST on drivers' earnings under the subscription-based model of ride-hailing platforms.
Union leaders from Rajasthan, Uttar Pradesh, Tamil Nadu, and other states have urged the Centre to reconsider the proposed tax, which will directly hit the income of the cab drivers and impact their livelihoods. Under this model, drivers already pay GST on the subscription fee to the ride-hailing platform. Hence, the union leaders said that an additional GST on their earnings would be an extra burden on the drivers’ earnings.
The subscription-based Software-as-a-Service (SaaS) model eliminates commissions, enabling drivers to retain their entire earnings while operating more efficiently by paying a reasonable subscription fee. It has been lauded as a transformative model for gig workers, promoting financial independence and sustainability. It also allows them access to essential tools such as ride-matching algorithms, navigation systems, and digital payment platforms without being involved in the transaction per se.
“The SaaS model has empowered drivers by eliminating hefty commissions and giving them full control over their income. However, imposing the additional GST on the ride fare will increase costs, leaving drivers with reduced earnings. This policy will undo years of progress and push many back into informal, insecure jobs,” Zahir Hussain, General Secretary of the Urimai Kural Drivers’ Trade Union.
Kuldeep Singh, President of the Jaipur Mahanagar Tepayia Vahan Chalak Union, voiced similar concerns: “Drivers are already paying GST on their subscription fees. Adding a tax on every ride would create an unsustainable double burden. This model is a business tool and a lifeline for thousands of families across India.”
The Chaalak Welfare Samiti from Uttar Pradesh echoed these sentiments, particularly highlighting the challenges for women drivers. “Women drivers have finally found safer, tech-backed options to earn a living through the SaaS model. If GST is imposed, the cost increase will disproportionately affect them, driving many out of the system,” said RK Pandey, President of the Samiti.
Key Concerns Raised by Union Leaders:
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Reduced Earnings: Double taxation will significantly decrease drivers’ income.
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Increased Costs: Essential tools provided by the SaaS model may become unaffordable due to the additional GST imposition.
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Adverse Impact on Women: Higher costs due to GST on ride fare could hinder the participation of women drivers.
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Reversal of Progress: Risks of pushing drivers back either into the traditional aggregation model extracting high commissions or into informal, unstable jobs.
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Marginalised Communities at Risk: The livelihoods of vulnerable groups would be severely affected.
Union leaders have called on the Government to exempt SaaS platforms from additional GST on ride fare and classify drivers' earnings through these platforms as personal income, which is already subject to income tax. “The government must adopt a progressive approach and ensure policies do not harm those at the grassroots level. The SaaS model is a stepping stone to equitable growth, and its benefits should remain accessible to all,” added Zahir Hussain.
The widespread opposition from cab unions underscores the urgent need for policymakers to reconsider GST regulations to protect the livelihoods of millions of drivers across India.
