The loneliness of the delivery man9 min read . Updated: 18 Sep 2019, 10:24 PM IST
Ferrying a Swiggy or Zomato delivery may earn just ₹30-50 per order. Is it fair?
New Delhi/Bengaluru: The narrow lanes of HSR Layout in south-eastern Bengaluru have, for some years, held up a sign to the rest of the country on what’s going to be the next big thing in the startup realm. A few streets to the west, Flipkart and Swiggy started life— in Koramangala. That is why what happens on this tiny patch of land in the suburb of India’s silicon city can sometimes have far-reaching implications.
On Monday, the zone became a protest ground, with roughly 1,000 Zomato delivery executives turning up to protest outside the food delivery startup’s regional office. The immediate trigger was a drop in the basic pay per delivery: from ₹40 to ₹30. Incentives (which kick in after a certain number of orders per day) have also been lowered, effective from Monday. Protests also broke out in Mumbai. Orders coming in via Zomato dropped promptly, by as much as 80%, said the owner of a prominent Bengaluru-based partner restaurant, which has outlets in Indiranagar and Koramangala.
This week’s saga of #logout orchestrated by delivery persons is another version of the tiff that played out between the National Restaurant Association of India and food delivery apps a few weeks ago. While that was about who foots the bill for the deep discounts, this week’s protests are about who foots the bill for the near-free home deliveries. Essentially, at its heart, they are both about one thing: cash burn.
The era of growth-at-all-costs may be coming to an end for several Indian startups, and it is going to leave a lot of players unhappy. “Zomato has cut down on discounts, which has led to a drop in orders," said a delivery partner who has been working with Zomato in Bengaluru for almost a year.
This day was a long time coming, said one investor, adding that what’s underway is merely “market correction". “Delivery partners were initially on-boarded at much higher salaries and now it’s being corrected," said the investor, requesting anonymity.
The monthly income of a Swiggy or Zomato delivery partner has plummeted to between ₹20,000-25,000 from ₹40,000-60,000 in a span of just one year. And it may fall even further. The question is an eternal one: what is fair? Ferrying food to someone five-six kilometres (km) for ₹30-40... is it fair? That question is not likely to go away any time soon. Currently, a group of delivery partners in Bengaluru is seeking legal advice from non-governmental organizations (NGOs) and other institutions.
In many ways, the food delivery business in India is at an inflection point. The protests are gaining momentum because a slew of firms have quickly transformed from startups to behemoths. As the market for online food delivery has expanded—today 80 million orders of chai, biryani, and cakes are ferried monthly—companies have inevitably added delivery partners by the thousands, crowding out the earning potential of these foot soldiers and resulting in an increase in wage-related demands.
Most delivery partners Mint spoke to clock in long hours at work, shuttling through narrow lanes, braving extreme weather, zip across highways, service large apartment complexes where they are forced to take separate elevators, and deliver even late into the night, sometimes facing rogue customers, just to make an extra buck.
On a Saturday morning, Delhi’s usually busy central business district Connaught Place (CP) wears a deserted look. Sweepers are cleaning pavements and morning walkers are returning home. But there’s another group of people—delivery boys from food aggregators such as Swiggy and Zomato—who begin to gather at CP’s outer circle that houses a number of restaurants.
It was 8.50am. Kabir, 37, had just returned after delivering an order off Minto Road. Even before he could park his two-wheeler, a second order flashed on his mobile screen—a single serving of samosa mattar chaat was to be delivered to Vikram Nagar, some 4.5km away. By 9.02am, Kabir was at Chaayos to pick up the order.
“I took up this job because I couldn’t find work for almost a year," Kabir said. He joined Swiggy earlier this year and delivers 17-20 orders daily, starting at 7am and logging out at 10pm. In a busy month, he can earn upwards of ₹25,000. “The target is to clock ₹1,000 daily so that I can get an incentive, over and above the payment," he said, before driving off on his Honda Activa—bought on an equated monthly instalment (EMI) of ₹5,700—to drop off his order. He is one of the several riders that Mint tracked in and around Delhi and Gurugram.
For every order, delivery partners make ₹30-70, based on the distance covered, ratings, waiting time at the restaurant, weather conditions, etc., besides incentives above the basic payment.
The country’s top food aggregators currently employ close to half-a-million delivery partners. Low entry barriers mean that those looking to make roughly ₹20,000 per month take up the job in the absence of other opportunities. Most delivery partners are contract workers, who essentially use the technology platforms to log in, and are not employed directly by the companies. In the months of June and July, Zomato on-boarded an average of 40,000 partners (each month) as it expanded operations in more cities, the company told Mint. Bengaluru-based Swiggy has over 200,000 active delivery partners, who are not directly employed by the food aggregator.
“Essentially, these are new forms of informal work arrangements. So, they don’t get covered in the ambit of any labour regulation or social security, because the relationship is (merely) task-based," said Radhicka Kapoor, a fellow at the Indian Council for Research on International Economic Relations, who is currently piecing together the strands of the gig economy ecosystem.
In India, much like in other global markets, such workers are not classified as regular salaried workers but as “independent contractors". As a result, benefits such as social security or a minimum wage evade them because “they don’t get covered in the standard employer-employee relationship", Kapoor added.
The upside: freedom to choose work hours. The downside: limited say on wages or terms of work. The gathering rebellion in different parts of the country reflects a general unrest among this class of new-age workers—part of India’s sprawling gig economy—who are now starting to constitute a fairly significant chunk of the country’s informal workforce.
And things could be changing. Last week, California’s legislature passed a watershed bill requiring companies like Uber and Lyft to start treating their contract workers as employees. Closer home, in Left-ruled Kerala, some food delivery persons have even demanded provident fund accounts. While India may head that way, it may take many years, say experts. “The entire (domain of) labour law and social security in the US is far more stringent and formalized over the last few decades, while in India, it is evolving," said EY’s Ankur Pahwa, national leader, e-commerce and consumer internet.
On the go
Today, India’s food delivery business is estimated to be well over ₹12,000 crore, dominated by companies such as Swiggy, Zomato, and UberEats.
Sudeep Sen, head of industrial, manufacturing and engineering vertical, at human resources firm TeamLease Services, explained that unemployed youth are drawn to such gigs because of the money they can make and the low entry barriers. For instance, 95% of Swiggy’s delivery partners only have a high school education. On average, delivery partners work between 8-12 months.
Zomato says that their incentive structure is based on working hours, which are flexible. “Our platform for delivery partners is enabled for complete flexibility and partners can choose to log in and log off at any time," said Mohit Sardana, chief operating officer, food delivery, Zomato.
Both Zomato and Siwggy also claim to offer employee benefits like accident, medical and life insurance, but very few of the delivery partners Mint spoke to had heard of it. Last month, Zomato rider Prabin Kumar’s two-wheeler went missing while picking up a lunch order in Gurugram’s Sector-29. He had no idea if the company would help since he was after all “on the job".
“I had to buy a new one from my own money to keep the deliveries going," said Kumar, who hails from Uttar Pradesh, adding that he was still paying EMIs of ₹2,756 each for his stolen bike. Kumar’s doubts are typical, in a workforce that, on most days, does not know if it has any rights or social protections at all.
There are other very peculiar, typically Indian problems too. In Gurugram, many delivery persons have endless stories of being harassed by rogue customers who place orders (cash-on-delivery), snatch the food, and then rough them up at remote locations, especially late at night.“They should reduce deliveries at night, especially cash deliveries," said Sandeep Kumar, 21, while waiting to pick up an order from Om Sweets in Sector-14. Kumar previously worked at a call centre in Gurugram. Both Swiggy and Zomato accept late-night orders, which may stretch till 3am. Swiggy even has plans to serve consumers up to 6am.
Back in Swiggy’s office in Gurugram, where delivery partners are on-boarded, a branch manager admitted that instances of late-night food robberies occur, and they have to often call in police. The company also has a security helpline for delivery partners, which is activated in case of dubious orders, a company spokesperson said.
The way ahead
It is not just a litany of complaints though. “This job gives us azadi (freedom and flexibility)," said Sandeep Singh, when asked why he moved to Delhi from Hardoi in Uttar Pradesh to start delivering food. But Singh who shuttles between his village and Gurugram every month is worried that as the number of delivery partners, especially in Gurugram, has gone up, the compensation has gone down steeply.
There is very little interest in a union though. “We don’t know where we will be next, and we don’t really know who we are working for since we are always on the move," Sandeep Kumar said.
While the discord between food aggregators and delivery partners may only get worse as the cash burn strategy peters out, at least one temporary solution may come from technology, which set off the app-based delivery business boom in the first place. There are attempts to dynamically direct delivery partners to areas where order density is high.
Swiggy has rolled out a revamped partner app to increase operational efficiencies and earnings. The app includes a “heatmap" feature that directs partners to locations with a high density of orders, enabling them to earn more, a Swiggy spokesperson said. Zomato’s Sardana said the food aggregator is working on its own solution to aid more deliveries per person. With the increased efficiency of the system, the reduction in the average delivery time (less than 30 minutes) has enabled them to deliver more orders in the same amount of time, he added.
Meanwhile, men like 23-year-old Bechal Kumar Singh, a native of Darbhanga in Bihar who joined Swiggy a year-and-a-half ago, continue to hold on to the job despite the long hours—over 15 hours a day to deliver 15-20 orders. His monthly income touches ₹20,000, up from the ₹12,000 he had made previously as a private driver. “I make enough to send some money home," he said. But if wages continue to go down, delivery persons like him may have to take some hard decisions.