Urban Company is eyeing profits and an IPO. But gig workers are angry

Beauticians working with Urban Company gathered outside the company’s office in Hyderabad last month to protest the rollout of its auto acceptance feature.
Beauticians working with Urban Company gathered outside the company’s office in Hyderabad last month to protest the rollout of its auto acceptance feature.

Summary

  • Urban Company has touted an ‘auto acceptance’ feature as being beneficial to gig workers and said it would ensure they did not miss out on any assignments that came their way. But, women workers feel the move has taken away the flexibility of their work. What is the way ahead?

Bengaluru: With three children to raise and a household to run, the Lucknow-based beautician had her hands full. So, when she joined home services platform Urban Company three years ago, she was clear about exactly what kind of bookings she would accept. When the app buzzed with an incoming salon job, her mind would quickly run through a checklist: Is it at a time when I don’t have caregiving responsibilities? Is the distance under 7km? Is the value of the service at least 2,000? Do I have the products required? If the booking checked these four boxes, she’d accept it. Else, she would ignore it.

“That was the only way to ensure that I made money on each booking," said the 43-year-old beautician, who requested not to be named for fear of being blacklisted by the company. “Otherwise, most of it would go towards petrol, platform commissions and product costs." The beautician used to earn around 40,000 a month, which went towards her children’s school fees and household costs.

But over the last six months, her monthly earnings have halved because of a sweeping algorithmic change. In the middle of 2023, Urban Company introduced a feature on its app called ‘auto acceptance’ where the algorithm assigns the day’s work to ‘partners’ without allowing them the option of accepting or rejecting bookings—they have to compulsorily complete the assigned tasks. Simply put, the gig workers are now at the mercy of the company’s algorithm. The beautician couldn’t work on some days and ended up getting blocked a couple of times.

Urban Company has been slowly rolling out the auto acceptance feature across different categories in various cities, including Hyderabad and Bengaluru. As it eyes an initial public offering, the company has been looking for ways to show profitability in its books. While this has meant adding new revenue streams such as home painting and in-house branded products, and a greater focus on its entry into tier 2 cities, it has also meant holding the company’s roughly 45,000 workers to higher metrics, reducing flexibility and creating situations where they are forced to work.

According to a business summary on the company’s website, its revenue from operations surged 45% in 2022-23 to 637 crore, while losses before taxation fell 40% to 308 crore.

Abhiraj Singh Bhal, cofounder and chief executive, Urban Company.
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Abhiraj Singh Bhal, cofounder and chief executive, Urban Company.

Mint reached out to Urban Company with a detailed questionnaire for this story but the company declined to comment. We did, however, manage to speak to a senior executive, who sought anonymity as he is not authorized to speak to the media.

“Salon is a massive category, so it becomes super-inefficient to handhold thousands of partners in each city, which is why we rolled out this feature," said the Urban Company executive. “The leads are assigned based on who is available on their calendar. We tell our partners that it will be great (for them to be available) from 7am to 7pm but it’s not mandatory."

While the company told them the new feature was introduced to ensure they did not miss any work that comes their way, women workers Mint spoke with feel the move has taken away the autonomy and flexibility of their work, which were the primary reasons for their joining Urban Company in the first place.

The shift has been especially hard on women workers—who make up at least a third of the company’s partners—due to their domestic responsibilities. Their relationship with Urban Company has become fraught over the last year as they believe the platform has shown little regard for their concerns. And this has prompted the workers to erupt in protests against the company’s diktats.

“It’s getting more and more difficult to work with them," said a Bengaluru-based Urban Company beautician, who is in her thirties. “It’s not like it was when we joined them." She, too, did not want to be named.

Salon is a massive category. It becomes super-inefficient to handhold thousands of partners in each city. —An UC executive

Mint spoke to more than a dozen Urban Company gig workers from Hyderabad, Lucknow, and Bengaluru for this story. None of them was willing to be named.

Since the change kicked in, salon workers say their earnings have dwindled. Urban Company charges a 25% commission on each job. On top of that, the workers are required to buy products from the company. Moreover, the workers added, they have to bear all commuting costs—some of them told this writer that while most auto-acceptance orders are within their hub of 6-10km radius, they often get bookings that are further away, at least 4 to 5 times a week. The beautician from Lucknow said she sometimes has to go as far as 13km for a booking.

It isn’t just the women who are affected, though it has been harder on them. New workers joining Urban Company over the last few months are directly being inducted into the auto acceptance feature.

The shift has been especially hard on female workers—who make up at least a third of the company’s partners—due to their domestic responsibilities.

One electrician from Bengaluru, who joined the platform this month, said that with jobs being auto assigned, his days are hectic. One Saturday this month, he was assigned eight jobs, which he said was frustrating because many assignments took longer than expected, forcing him to call customers and cancel some jobs. His day started at 9 am, and he was only able to wrap up 12 hours later. “Having jobs auto assigned is difficult because the system assumes a certain amount of time for each task without taking into consideration the issues that crop up," said the electrician.

 

No repercussions

Gig work in India is growing—as per a NITI Aayog report, gig workers are expected to grow from roughly 7 million to 23 million by 2030. While cab-hailing and food delivery are dominated by men, Urban Company engages a high number of women. It has over 15,000 salon workers currently, and aims to train at least 200,000 women service partners by 2030.

Labour experts point out that the concept of auto acceptance goes against the very foundation of gig work, which promises flexibility and autonomy. Instead, it has created a situation where the workers are coerced into accepting the bookings.

“The fundamental issue with any imposition of a ‘neutral’ algorithmic system is that it has a disproportionately negative impact on women workers, in particular, because it is not considering their unpaid care burden or other aspects like mobility or safety," said Chiara Furtado, a gig work researcher with the Bengaluru-based nonprofit Centre for Internet and Society (CIS).

While platform companies steer clear of offering employee benefits to their gig workers by claiming that they are intermediaries, lawyers believe that in this specific case, an argument can be made for gig workers to be treated as workers, extending the entire gamut of labour laws to cover them.

“This is because they are no longer gig workers if they cannot control their hours, and if they cannot control the tasks they take up," said Shreya Munoth, a Delhi-based lawyer, who has done work with informal labour. “If everything is assigned to them, then for all intents and purposes, they are workers, and there should be no reason for a company to evade its obligations under labour regulations."

She added that in this particular case, it can be considered as “indirect discrimination on the basis of gender, because the people most impacted are women."

How it happened

Sometime in January, a Hyderabad-based beautician received a call from a manager asking her to appear at the office for a meeting. When she reached the office, she found 12 other workers waiting to attend the same meeting. The agenda was clear: introduce the group to Urban Company’s new auto acceptance feature and its benefits.

“They told us that sometimes we miss accepting leads because our phones are off, or we might be driving, so with this new feature, the system will assign the leads to us and that way we’ll never have to miss out on incoming work," she recalled. “They said it would be good for us."

After painting a rosy picture, the Urban Company executives reeled off a laundry list of new rules: the worker would have to maintain a minimum credit of 2,000 on her app (this is where Urban Company deducts its commission from); they mandatorily had to work on weekends, for 10 hours. And though they could take time off during the weekdays, they had to complete 50 bookings each month.

The beautician, 37, was perturbed by the new rules. She had joined Urban Company two years earlier due to the flexibility it offered. With a husband who is partially paralysed, and two daughters to take care of, she wondered if she would be able to handle the added responsibility of automatically-assigned bookings without any planning. “I have family responsibilities," she said. “What if my daughters or I get our periods on the weekends? How can I leave them in pain and go for a booking?"

Not signing up for auto acceptance would have repercussions. “They gave us that option. But then they also warned us that they would not give us many leads, and even if we got leads, the booking value would not be more than 600-800," she said. Caught between a rock and a hard place, she signed up.

What if my daughters or I get our periods on the weekends? How can I leave them in pain and go for a booking? —A beautician

A few weeks after starting work under automatic acceptance, the beautician is already facing a multitude of problems. She has to lug a 15kg bag around all day in a bus and sometimes risk travelling at night after completing a job fixed for 7 pm.

“Previously, I would carry products based on the service booking, which I would know days in advance," she said. “But now the bookings can come at any time and we have to be prepared with all the products in our bag."

As news of the difficulties faced by the beauticians spread in Hyderabad, many of them showed up last month outside Urban Company’s office in Madhapur to protest the coercion and question the introduction of automatic acceptance. No resolution has been reached yet.

This isn’t the first time the salon workers and Urban Company have been at loggerheads. Last year, thousands of them protested in June and July across multiple cities fighting for their right to work after the company permanently blocked their accounts. While the company gave in and reinstated the accounts of some workers, it also launched a new programme called ‘Project Shakti’, to tighten the reins on workers.

This isn’t the first time the salon workers and Urban Company have been at loggerheads. Last year, thousands of them protested after the company permanently blocked their accounts.

Following this, in December, the Telangana Gig and Platform Workers Union (TGPWU), of which Urban Company workers are a part, filed a complaint with the Telangana department of labour. “We complained against the company pressuring the workers and then deactivating their accounts," said Shaik Salauddin, founder of TGPWU. “Urban Company is not interested in sitting down and having a conversation, citing that this is not an employer-employee relationship (since these are gig workers)."

Chandrika Goud, 32, a beautician, explains the difficulties she and others face in dealing with Urban Company to Telangana Chief Minister Revanth Reddy at an event in December last year.
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Chandrika Goud, 32, a beautician, explains the difficulties she and others face in dealing with Urban Company to Telangana Chief Minister Revanth Reddy at an event in December last year.

Flexible work promise

Urban Company started out in 2014 under the name Urban Clap, with the aim of organizing the home services market. For customers, this meant being able to find a plumber, electrician or beautician from the comfort of their smartphones. For workers, the discourse at the time was focused on flexibility, and drew thousands to the platform.

According to a 2020 report by global NGO Oxfam, Indian women put in 3.26 billion hours of unpaid care work every day. So, when Urban Company came along with its flexible work options, women workers grabbed the opportunity. “When women workers were recruited, they were told that they could handle both home and work," CIS’s Furtado recalled from her interviews with several workers. And while flexibility and high earnings were a reality during the initial years, things started to go downhill around 2021.

“Workers are starting to realize that they’re not receiving the kind of flexibility they had hoped for, which is probably why they are no longer taking jobs that will require them to get in an autorickshaw and travel for 45 minutes," said Sabina Dewan, founder and executive director of labour research organization JustJobs Network. “So, the platform…says they will remove their right to refusal. But what they should do is create incentives so that workers are attracted to the platform. And if they are spread out well geographically, then they will not need to institute such a rule."

Sabina Dewan, founder and executive director, JustJobs Network.
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Sabina Dewan, founder and executive director, JustJobs Network.

Many women switched industries or left inflexible jobs to start working with Urban Company. One woman, for instance, used to run a small salon in Telangana’s Mahboobnagar district. Concerned that the salon wasn’t making enough money for her family of five, she started seeking alternative options. Her friend told her about “a company in Hyderabad that’s offering flexible salon work and paying well", referring to Urban Company. Excited at the prospects, she made three trips to Hyderabad with her husband to understand the job, get trained and find a house. Convinced that this was their path to a better life, the couple along with the family relocated to Hyderabad four years ago.

Now, with the introduction of auto acceptance, she is worried that her only source of livelihood is hanging by a thread. “I have already been (temporarily) blocked twice. With auto acceptance, if I miss a single booking and get blocked a third time, I will be permanently blocked," she said.

When women workers were recruited, they were told that they could handle both home and work. —Chiara Furtado

Workers are given three strikes: they are temporarily blocked twice due to reasons like non-acceptance of jobs, or low ratings. Their third block is a permanent one. Introduction of the new algorithmic rule has only heightened anxieties, many women said.

Labour experts believe that the only solution to balancing company incentives and worker rights is to bring in regulation. The business model of these platforms, they pointed out, is based on surplus labour, the strength of the network, and low-cost delivery of services.

“I don’t think there’s any incentive for the platform to really value the worker; their whole model is based on a labour-surplus structure," said Dewan. “It will only change when there’s government/regulatory pressure, consumer pressure or union pressure." She added that regulations can change how platforms operate and bring in algorithmic transparency, as well as structured working hours and remuneration. “There’s a huge role for regulation here."

Ratings decline

A screen grab from the Fairwork India Ratings 2023. Urban Company’s score has been dwindling in the last few years.
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A screen grab from the Fairwork India Ratings 2023. Urban Company’s score has been dwindling in the last few years.

According to Fairwork, a research group that regularly evaluates platform companies on a range of criteria from fair pay and working conditions to fair representation, Urban Company’s score has been dwindling in the last few years. It went from 8 out of 10 in 2020 to 7 in 2022 to 5 in 2023. “The drop in score was due to losing out against principle 4 in 2023," said Mounika Neerukonda, a lead researcher with Fairwork India. Principle 4 refers to “fair management", which evaluates a company based on whether it has provided due process in decisions affecting workers.

Neerukonda added that no platform, including Urban Company, has tried to get the collective perspective of gig workers before making significant policy changes. Just days after the protests in Hyderabad, for instance, Urban Company posted two clarification videos on YouTube. One has a bunch of managers explaining the different ways in which auto acceptance will help the partners. They speak about creating a fair earning system and creating a better customer experience. “Auto acceptance will help all partners with equal earnings," Harsh, an Urban Company category manager from Hyderabad, explains in the video. But neither of the videos addresses the issues specifically faced by women workers.

No platform has tried to get the collective perspective of gig workers before making significant policy changes.

Meanwhile, the Lucknow-based beautician featured at the beginning of this story is walking a tightrope with Urban Company these days. Last month, she did not work two weekends due to family commitments, which led to her getting blocked twice. “I had to attend my daughter’s school function and parent-teacher meeting, so I marked my calendar as unavailable because of which my acceptance rating dropped. A manager told me that if I regularly mark weekends off, I will be blocked permanently," she said. “Since then, I ensure that I am available all weekends. This is my last lifeline."

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