Food Delivery Workers Protest Incentive Cuts Despite ‘Recovery’ Projections

New Delhi: The heat of a lockdown-triggered disruption in the country’s burgeoning food delivery industry continues to sweat its rather precarious workforce, even as recent estimates by business leaders suggest that a recovery towards pre-COVID-19 levels of operations might be around the corner.

Given the situation, accusations are levelled – particularly by app-based workers’ unions and federations – against food delivery giants of further pushing workers, ostensibly known as “delivery partners”, to compensate for the fall in revenue in the last few months.

After Bengaluru-based unicorn Swiggy resorted to slashing incentives of its delivery partners, there have been strikes by in at least three major metropolitan cities – Delhi, Chennai and Hyderabad.

In the national capital, anger, which had been simmering for days finally boiled over into a ‘logout’ strike on Thursday, August 20. Delivery partners associated with Swiggy abstained from logging onto the app. As a result, food delivery operations were hit in neighbourhoods including South Extension, Greater Kailash and New Friends Colony, areas which otherwise see a large number of orders, NewsClick has learned.

In Chennai, partners demanded a restoration of the old payment structure – delivery executives have been on strike in Tamil Nadu’s capital since August 15. Similar protests erupted in Hyderabad at around the same time. They continue to persist. 

Introduced in early August this year, Swiggy’s new wage-rates drastically reduced the earning on each order. It forms a major source of income for the delivery executives.

The basic pay-per-order was reduced from Rs 35 to Rs 15, a Delhi-based Swiggy delivery partner, who did not wish to be named, told NewsClick. “Our daily earnings have been badly affected; even incentives based on the distance covered for the completion of a delivery have been cut,” the delivery partner added.

Soon after the new payment structures were introduced, complaints were made to Swiggy’s area managers. Partners mentioned that it would be impossible to make ends meet with such low payments. Another executive, on the condition of anonymity, said: “However, they went unheard.” 

“The company (Swiggy) can never be approached when the delivery partners look to lodge any complainants. In fact, those who usually raise an issue are met with the threat that their app ID will be blocked,” the executive said. 

In a statement released earlier, the company drew attention to the prevailing incentive benchmarks in the market, saying that its delivery partners receive “an industry-best service fee”, adding that this does not change even with the “revised structure” in place. 

“Our delivery partners are the backbone of our organisation, and we recognise their efforts in providing an essential service to the nation,” the statement added. 

The recent pay cuts come at a time when a recent report by another food delivery giant, Zomato, estimated that the industry would bounce back to pre-COVID-19 levels of business “in the next 2-3 months.”

The food delivery industry has “largely recovered”, with the overall sector clocking around 75% to 80% of pre-COVID-19 gross merchandise value (GMV), the report, titled ‘Indian Restaurant Industry – Mid COVID-19 report’, said.

Despite the impact of the COVID-19 lockdown, the fine print bears positive news for the Indian food-tech industry. It was poised to grow at a compound annual growth rate of between 25% and 30% to $8 billion by the end of 2022, according to figures released in January this year.

However, the projections have little effect on delivery executives of these companies, who continue to remain gripped by insecurity, both economically and socially. The labour arrangement has also fuelled health concerns of the workers.

The situation largely remains so due to the lack of any legal framework – a “legal grey zone” –  for app-based companies in India, rues Shaikh Salauddin, national general secretary of Hyderabad-based Indian Federation of App-based Transport Workers. As a result, “these gig companies continue to exploit workers who mostly belong to vulnerable sections,” he said, referring to Zomato, Swiggy and cab services like Ola and Uber.

Salauddin pitched for a convergence of protests which have been staged time and again by ‘partners’ of different gig companies. He suggested a single demand of “social protection for all.”

Kabir Khan of the Delhi-based All India Gig Workers’ Union (AIGWU) told NewsClick that  Swiggy delivery executives will continue with the strike until their demands are met.

Khan, who has been with Swiggy for over a year now, hopes to get support from executives from other delivery platforms in the coming days as well.

“The coming together of all Swiggy delivery executives is already forcing the company to listen to us. Yesterday, it informed us (in Delhi) that the incentive – ‘order completion pay’ – is now restored to Rs 3 per order,” he said. The amount was Rs 5 before August, the month when it was slashed.

Another Swiggy delivery executive in Delhi, who wished to remain anonymous fearing action, said such small wins – though a ray of hope – don’t bring much relief.

“The situation has only gotten worse,” he said, having joined Swiggy in 2017. With family responsibilities to worry about he sounded nervous about his monthly income after the incentive cuts. “I just want to earn enough to provide a roof and three meals a day to my family. But now even that seems tough,” he said.

Update: 

On Friday, Swiggy responded to the queries, sent to it for a comment, saying that the situation in Chennai has resumed back “to normalcy” with “all” delivery partners being back to make deliveries. The full statement of the food delivery giant, sent to Newsclick over mail, is produced below:

“Over the last couple of days, we have had a positive dialogue with our partners to explain the revised pay-outs and assuage their concerns. As a result, most of our partners are back to delivering with us and we're serving 100% of the city of Chennai as of today (Thursday, Aug 20). We are glad that our partners were able to understand the revised service fee which continues to be the best-in-the-industry. Once again, we would like to assert that most active partners have made over Rs 45 per order in the last week, with the high performing partners making over Rs 100 per order. Our partners earn incentives over and above this making their monthly service fee much higher. NO active Swiggy delivery partner in the city makes only Rs 15 or lesser per order on an average. We understand the efforts put in by our delivery partners in making Swiggy accessible to consumers and maintain an honest approach in enabling a sustainable service fee.”

While speaking about the happenings in Chennai – where delivery executives were reportedly on strike since August 15 – the statement shared by Swiggy didn’t mention anything about similar protests that have also erupted in Hyderabad and more recently in Delhi.