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[Update] Swiggy Ops In Chennai Partially Hit As Delivery Partners Strike Over Pay Cut

[Update] Swiggy Ops In Chennai Partially Hit As Delivery Partners Strike Over Pay Cut

Swiggy delivery executives have been on a strike since Thursday night

They have alleged the company of reducing per order-pay to less than half of the earlier amount

Foodtech sector have been battling drop in order volumes since the lockdown started

Swiggy delivery executives in Chennai have been on strike since last Thursday (August 13), in response to the food delivery company’s recent cut on delivery executives’ pay. They have alleged that the foodtech unicorn has brought down their per order pay from INR 35 to INR 15. Similar concerns have been raised by delivery executives in Hyderabad as well.

“We did not fight back when they brought it down to INR 35 from INR 40. But now, it has further dropped to INR 15. How can we feed our family with this?,” a delivery executive told Indian Express. Further, Swiggy also allegedly reduced overhead incentives such as long-distance delivery, services during rains, monthly and weekly incentives.

In an official statement, Swiggy explained that INR 15 per order is one of seven components that make up the per order payout for the delivery partners. Other components include distance travelled, waiting time, customer experience, shift completion and incentives. Swiggy claimed that none of the active delivery partner have earned just INR 15 per order. On average, the delivery partners are said to make over INR 45 per order, which could go up to INR 100 per order for the highest performing delivery partners.

The delivery executives, however, said,  “We have been risking our lives during the pandemic to ensure that people do not go hungry. We need to have minimum wages in place,” They have demanded that Swiggy’s old wage structure should be reinstated and the basic wage per day should be introduced.

“We have always maintained that our delivery partners are the backbone of Swiggy; more so in the current scenario where they have enabled us to serve millions of fellow citizens as an essential service. It is our constant endeavor to ensure that their service fee is sustainable even in the most difficult of times so that they are able to continue serving our consumers,” the company said in a media statement.

Swiggy claimed that during the nation-wide lockdown, it financially aided delivery partners who continued to log-in despite not being able to deliver any orders.”In an industry first, we supported close to 40,000 delivery partners to the tune of Rs 18 Cr in earnings guarantee to tide through the lockdown,” the Swiggy spokesperson added.

Since the coronavirus lockdown, overall ordering-in sentiment in the country has gone down. Curefit’s cloud kitchen brand has also scaled down operations from 15 cities to three South Indian cities (as of August 2020). 

Commenting on this scaling down, Curefit cofounder Ankit Nagori told Inc42 that “Supply chain disruptions were not the biggest reason for the fall (in the volume of food orders), I think the overall sentiment around ordering in has gone down in the country,” said Nagori. 

He added that even a Twitter survey today will show that 50% of people have not ordered in since the lockdown, and even the ones who are ordering in, are doing so at a much-reduced frequency. 

Swiggy also seems to be battling this sudden shift in consumer sentiment. The company has laid off about 1350 employees since the pandemic. The realignment exercise at the company started in May with the hope that the business will recover the Covid-induced loss in a few months. However, in July, the company said that the foodtech industry still only had recovered to about 50% of its peak. 

Another foodtech major, Zomato also laid off more than 5000 employees citing a fall in revenue. Zomato CEO Deepinder Goyal had said that the company did not have “enough work for all our employees. We owe all our colleagues a challenging work environment but we won’t be able to offer that to 13% of our workforce going forward.”

Update | 19:33, August 17, 2020

A statement by Swiggy spokesperson was added.