Delivery execs go on strike after Zomato cuts payouts
Bengaluru: Food delivery executives of Zomato hit the streets across Mumbai and Bengaluru protesting the company’s new incentive structure, which offers less money per delivery. Zomato has also informed restaurants that they should prepare for a rider churn in its fleet this week as it is trying to rationalise costs. The move by Zomato comes amid intense rivalry from Swiggy and UberEats, all of whom had doubled payouts last year as they looked to expand fleets aggressively.
According to four delivery executives TOI spoke to, they will have to do more deliveries to earn the same incentive, making it harder to cross the threshold to earn a bonus payout. “Roughly, we have to do threefour extra deliveries for each level of incentives. I end up doing deliveries for at least 12 hours per day, and sometimes it has
. gone up to 14-15 hours as well,” said Prashanth, who had just received a new order to deliver from Bengaluru’s central business district on Monday evening. He did not want to disclose his last name.
For Zomato’s delivery staff, among the changes, they will now get an incentive of Rs 850 for 46 touchpoints, meaning Rs 18.6 per touchpoint. Earlier, the scheme offered Rs 20 per touchpoint. This rate is only for weekdays, and each delivery accounts for two touchpoints.
This comes at a time when the rising ‘gig-economy’ is being seen as a major avenue of job creation for blue-collar workers as internet companies compete against each other to gain market share. The cut in incentives is similar to what happened with ecommerce companies — especially cab-hailing majors Ola and Uber over the past few years as their driver-partners felt the pinch of their overall incomes going down.
On average, delivery personnel can earn Rs 25,000-30,000 per month, including petrol costs for the bike. This had more than doubled last year as companies aggressively tried to hit high volumes of orders, which play a critical role in raising new capital. Currently, Zomato is in the middle of raising $400-500 million from new and existing investors, and is said to be losing $40-50 million per month.
While Zomato told restaurants in Mumbai that it is prepared to manage delivery volumes on time, restaurant partners are not sure about the same. Incidentally, Zomato’s co-founder and CEO Deepinder Goyal had tweeted on September 5 that delivery partners’ monthly income has crossed Rs 200 crore for the first time and that it has 2,30,000 delivery partners in India.