How Will India’s New Labour Code Impact Eternal, Swiggy And Urban Company
Overall, the estimated impact on adjusted Ebitda ranges between 4% and 10% across the sector, suggesting a meaningful but manageable hit.
India’s fresh labour code rollout has placed platform-based companies such as Eternal Ltd., Swiggy Ltd. and Urban Company Ltd. squarely in focus, marking the first time ‘gig work’, ‘platform work’ and ‘aggregators’ have been formally defined in law.
The Ministry of Labour has announced that all firms using gig workers will now fall under the ambit of the new rules, which require aggregators to contribute 1–2% of their annual turnover towards worker welfare, capped at 5% of the amount paid or payable to gig and platform workers.
Impact On Eternal, Swiggy And Urban Company Financials
For the platforms, the immediate question is the financial cost. Based on current business metrics, the contribution per order varies meaningfully across segments.
Eternal’s food delivery business would need to set aside roughly Rs 0.95–1.9 per order, rising to Rs 4.4–8.8 for its quick commerce unit. Swiggy’s numbers look similar, with a Rs 1.1–2.2 per-order contribution for food delivery and Rs 1–2 for quick commerce.
Urban Company, which pays substantially more to its service partners, could see the contribution jump as high as Rs 47 per order if calculated at the 5% payout threshold. Overall, the estimated impact on adjusted Ebitda ranges between 4% and 10% across the sector, suggesting a meaningful but manageable hit.
What Do Companies Have To Say?
Even so, the companies appear largely unperturbed. Eternal has said the new rules will not harm the long-term health or sustainability of its business. Swiggy echoed that sentiment, adding that it does not foresee any material impact on its cost structure or financial performance.
Analysts argue that the costs may eventually be shared across the ecosystem, including consumers, delivery partners and merchants, softening the blow for any single stakeholder.
Brokerages View New Labour Code As Positive
Brokerages view the reforms as structurally positive. Bank of America describes the labour codes as a major step towards formalisation, scale and wider social security. They see the changes bolstering organised employment, supporting financial inclusion and giving a long-term push to manufacturing under the Make in India umbrella.
In their view, the new framework works in tandem with previous reforms such as RERA and GST to accelerate the formalisation of the economy.
Citi holds a similar stance, calling social security coverage for gig workers a healthy development for the broader ecosystem. While the new laws impose a financial cost, its analysts estimate that the burden is relatively mild — around Rs 2–3 per order in food delivery and quick commerce if absorbed entirely.
They also note that platforms have historically managed to raise convenience fees with minimal impact on demand, suggesting that most of the incremental expenses can be passed through without disrupting growth trajectories.
