The narrow, meandering lanes of HSR Layout in south-eastern Bengaluru has, 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 start-up realm. Flipkart and Swiggy started life a few streets to the west, in Koramangala, HSR’s older, more congested cousin. That is why what happens on this tiny patch of land in the erstwhile suburb of India’s silicon city can sometimes have far-reaching implications.

On Monday, the zone became a protest ground, with roughly 1000 Zomato delivery executives turning up to protest outside the company’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 watered down, effective from Monday. Protests also broke out in Mumbai. Orders coming in via Zomato promptly dropped, by as much as 80%, said one prominent Bengaluru-based restaurant partner with outlets in Indiranagar and Koramangala.

This week’s saga of #logout orchestrated by delivery personnel is another version of the tiff which played out a few weeks ago, between the restaurant association and food delivery apps. That was about who foots the bill for the deep discounts. And this week’s protest is 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 start-ups and it is going to leave a lot of players unhappy. “Zomato has [also] cut down on discounts, which has also led to a drop in orders,” said a delivery executive who has been working with Zomato in Bengaluru for almost a year.

This day was long coming, said one investor, who added 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 an investor in the space, requesting anonymity.

Just one year ago, it was possible to earn anywhere between ₹40,000-60,000 per month as a Swiggy or Zomato delivery guy. That has now plummeted to between Rs.20,000-25,000, and may fall further. The question is an eternal one: what is fair? Ferrying food to someone 5-6 km away, while it is raining, for Rs.30-40… is it fair? That question is not likely to go away any time soon. Currently, a group of delivery partners in Bengaluru are seeking legal advice from NGOs and other institutions.

In many ways, the food delivery business in India is at an inflection point. The protests are acquiring momentum because a slew of firms have quickly transformed from start-ups to behemoths. As the market for online food delivery has sprawled—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.

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Most delivery personnel #KhabarLive 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.

Gig economy
On a Saturday morning, Delhi’s usually busy central business district Connaught Place wears a deserted look. Sweepers are cleaning pavements and early morning walkers are returning home. But there’s another group of people—delivery boys from aggregators such as Swiggy and Zomato—who begin to flock outside CP’s outer circle that houses a slew 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 assignment flashed on his mobile screen—a single serving of samosa mattar chaat was to be delivered at Vikram Nagar, some 4.5km away. By 9:02, 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 clocks 17-20 daily orders, 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 in his Honda Activa—bought on an 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 over a recent weekend. For every order, delivery boys make ₹30-70, based on the distance covered, ratings, waiting time at the restaurant, weather conditions, etc., besides incentives over and 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 Rs20,000 per month login in the absence of alternate job opportunities. Most delivery executives are contract workers who essentially use the technology platforms to login and are not employed directly by the companies.

Over the last few months, Zomato has on-boarded an average of 40,000 partners every month as it has expanded operations in more cities, the company told #KhabarLive. Bengaluru-based Swiggy has over 200,000 active delivery partners, who are not 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, an economist at the Indian Council for Research on International Economic Relations who is currently piecing together strands of the gig economy ecosystem.

Kapoor adds that 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.”

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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 reflect 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 (think of everyone from an Uber driver to a Swiggy or BigBasket delivery person).

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 communist-ruled Kerala, some food delivery personnel have even demanded PF 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 formalised over the last few decades, while in India, it is evolving,” said EY’s Ankur Pahwa, national leader, e-commerce and consumer internet.

India’s online food delivery business is today estimated at Rs12,000 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 are Class 10 pass-outs or have completed high school. On average, delivery executives work between 8-12 months on its platform.

Zomato says that their incentive structures are based on work 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 personnel #KhabarLive spoke with had heard of it. Last month, his two-wheeler went missing when he stepped into a local restaurant in Gurugram’s Sector 29 to pick up a lunch order. 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 the EMI of ₹2,756 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 personnel 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.

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“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 till 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 the 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 boys, 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 with since we are always on the move,” Sandeep Kumar (quoted earlier) said.

While aggregators do not mandate delivery boys to log in long hours, the incentive structures tied to the deliveries often entice them to work longer. Zomato’s Sardana said its delivery partners put in an average of 50 hours of work per week, working a minimum of five days. But most workers #KhabarLive spoke with said they end up working at least six days a week to make extra money as the incentives tied to their work lures them to work longer hours.

While the discord between food aggregators and delivery executives 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 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 was working on its own system to aid more deliveries per person. Will the tech hacks satisfy men like Kabir or Sandeep will become clear by whether they are out in streets delivering food or protesting. #KhabarLive