More troubles for India’s Zomato as food delivery drivers go on strike

Zomato’s founder recently said the company added 10,000 jobs in September alone.

Photo:Shutterstock.com

As food delivery company Zomato’s 6,000 delivery drivers in India’s two metropolitan cities–Mumbai and Bengaluru–went on strike on Monday over a revised payment structure, it seems the Alibaba-backed Indian unicorn’s trouble is not going to end any time soon.

A Zomato spokesperson told KrASIA that the company has changed its payout structure for its delivery fleet across India which resulted in the strikes. According to local media Mint, the remuneration per delivery in Bengaluru has been reduced to Rs 30 (USD 0.42) from Rs 40 (USD 0.56).

“We regret the inconvenience caused to our users and are continuously working to resume our services in the affected areas,” a Zomato spokesperson said in its response to KrASIA, adding that “Different metrics such as base pay, user satisfaction, delivery touch points, minimum guarantee etc. help us appreciate our delivery partners in accordance with their efforts.”

Zomato also suggests that even though remuneration per order is reduced, the revised payment mechanism will result into “Reduced average delivery time” and “increased system efficiency”, allowing the delivery drivers to “perform more deliveries in the same amount of time.”

The company’s new payment structure for its 230,000-strong delivery fleet spread in over 500 Indian cities, means lesser money per delivery for its delivery drivers who fear they will have to deliver more to earn incentive or bonus at the end of the month.

“We are on strike because of the change in payment structure which will force us to put in more hours to earn incentives. The targets we have been asked to get to earn incentive is unachievable, as we don’t even get that many orders,” said Sanjay, who has been delivering food for Zomato in Bengaluru for the last five months. He didn’t wish to reveal his last name. According to Sanjay, around 3,000 delivery-men are on strike in Bengaluru.

Earlier this month Zomato founder Deepinder Goyal tweeted: “Our delivery partners’ monthly income has crossed Rs 200 crore (USD 28 million) for the first time. And we have just hit 230,000 delivery partners in India.”

He further said the company in September aims to add 10,000 new jobs as a result of direct employment/contracts with Zomato.

Recently, Zomato and other food delivery companies faced stiff protest from restaurants across India over deep discounts, which restaurateurs claim is eating into their revenue and logged out of the food delivery apps. After multiple meetings with India’s restaurant association NRAI and the re-jigs to its discounting program in a bid to win over its restaurant partners, the situation hasn’t really cooled down yet.

NRAI claims over 2,000 restaurants have joined in a nation-wide logout campaign against restaurant aggregation and food delivery platforms including Swiggy, Eazydiner, Dineout, Zomato, UberEats, among others.