Workers’ Body Calls On Blinkit To Reconsider Delivery Workers’ Pay Cut Decision

The Indian Federation of App-Based Transport Workers (IFAT) has called on the Zomato-owned quick commerce unicorn Blinkit to reconsider its position on the recent pay cuts for delivery drivers.

The industry body’s national general secretary, Shaik Salauddin, said, “The sudden reduction in their wages not only undermines the workers’ hard work and dedication but also puts their livelihoods at risk.”

Salauddin added that around 600 delivery workers met with the company officials on April 14 to find a solution though the company remained adamant to carry on with the pay cut.

To recap, last week, Blinkit cut the wages of its delivery workers from INR 50 per order to INR 14, sparking outrage and protests across Delhi NCR. Per IFAT, more than 50% of the 200 dark stores Blinkit has in Delhi, Gurugram, Faridabad, Ghaziabad, Noida and Greater Noida have been shut since April 13.

Last week, in response to an Inc42 query on the pay cuts, a Blinkit spokesperson had said, “We have introduced a new payout structure for our partners that compensates them based on their effort to deliver an order. This is an opt-in exercise, and our teams are on the ground to answer any questions from the partners.”

According to IFAT, Blinkit used to pay INR 50 per order to the early batch of its delivery workers, with newer delivery workers receiving INR 25 per order. The industry body added that the quick commerce startup also added incentives and fuel charges, which would reach INR 1,400 per week in some cases on top of the delivery payouts.

“The protesting workers are also angry as these incentives have been gradually tapered out,” said Salauddin, adding, “We strongly condemn this unilateral decision by Blinkit and call on the company to reconsider its stance.”

Last week, a BJP spokesperson from Haryana, Yashpal Batra, met with a local industry body in Gurugram which represented protesting Blinkit workers, giving the whole chain of events a political colour.

Many industry experts have also been chipping in with their opinions on the viability of the whole quick commerce model, including Blinkit’s (erstwhile Grofers) ex-CFO and BharatPe cofounder Ashneer Grover.

Grover, who left Blinkit back when it was Grofers in 2017, took to Twitter to express doubt about the business model.

“BlinkIt/Zepto – [the] problem is not ₹15 for delivery against ₹50. [The] problem is 10 Min delivery has no economics – low ticket size and low margin can never be solved through forced low delivery cost. BlinkIt journey: 90 Min (bull run) —> Next day (bear run) —> 10 Min (bull run) —> ??,” wrote the ex-CFO on Twitter on Sunday (April 16).

Per Zomato’s Q3 FY23 financials, Blinkit’s order volume grew 21% QoQ to 3.16 Cr, while the average order value (AOV) declined 2.6% to INR 553.

Noting that AOV is important, Zomato founder Albinder Dhindsa said that the company can still build a profitable business at an AOV 20% lower than the current level.

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