June 24, 2021

Zomato Revises Pay Structure for Its Delivery Partners Because of Fuel Prices

Zomato will pay delivery partners more because of the high fuel prices, the company announced on Thursday. The Gurugram-based company said that the revised pay structure would include an additional component of distance pay that would be pegged to adapt changes in fuel prices. This comes just days after its several delivery partners went on strikes in various parts of the country, allegedly over inadequate income, saying that fuel prices were wiping out their earnings.

The revised pay structure will be applicable over and above existing remuneration, Zomato said in a statement. It will be adjusted on the basis of changes in fuel prices to compensate delivery partners for the cost they take on to carry out food deliveries. The company confirmed to Gadgets 360 that the additional component of distance pay will be directly proportional to the increase in fuel prices.

In addition to the new remuneration component, Zomato said that it had identified the impact of fuel price increase in case of long-distance orders and introduced long-distance return pay. This will either enable delivery partners making long-distance deliveries to either receive another order within 15 minutes that would bring them back closer to their base areas of working or they will instead receive an additional payout for travelling the extra distance they take while returning back from a long-distance deliver to their base-working localities to get another order assigned.

The new inclusions combined will increase the earnings of delivery partners by seven to eight percent, Mohit Sardana, COO of Food Delivery at Zomato, said.

“We have already implemented the new structure in about 40 cities and will be rolling it out in other cities in the coming week,” he added.

Zomato also said that it had increased its “focus to understand and solve proactively for concerns raised” through a weekly survey that they conduct with its delivery partners. This appears to be the company’s response to the recent strikes that took place in cities including Chandigarh.

“For delivery agents, the bone of contention is a revision in the way Zomato calculates payment for deliveries based on distance. For orders up to 5.5 kilometres, the company would pay a flat rate of Rs. 30 and an additional Rs. 10 for every km beyond that. While the company has not changed the base pay, it will now pay one rupee per additional 100 metres over the 5.5 km limit, the executives said,” Indian Federation Of App Based Transport Workers (IFAT) National General Secretary Shaik Salauddin told Gadgets 360.

“While the firm would earlier pay agents Rs. 300, Rs. 600, and Rs. 800 for completing 11, 16 and 20 orders, respectively, in a day, delivery executives say the new structure is nowhere as attractive. They claim the company has reduced the payments to Rs. 250 for 10 orders, Rs. 400 for 15 orders, Rs. 600 for 19 orders, and Rs. 850 for 23 orders, in a day,” Salauddin said.

Currently, Zomato claims to have a base of over 1.5 lakh delivery partners in its fleet. It is also in plans to strengthen that number further.

Zomato earlier this week raised $250 million (roughly Rs. 1,811 crore) at a valuation of $5.4 billion (roughly Rs. 39,100 crores). The company is also planning to file for its initial public offering (IPO) later this year.

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