Zomato’s Deepinder Goyal Confident Gig Worker Crunch Will Be Solved ‘In A Few Weeks’

Addressing the gig worker shortage impacting the food delivery and quick commerce industries in its FY22 financial and operating performance report, Zomato today said that the availability of delivery partners will normalise in a few weeks.

Founder and CEO Deepinder Goyal admitted that while the company is feeling some pressure from the shortage of gig workers, he expects things to stabilise in the next few weeks. It is unclear what Zomato is banking on to make this claim, but the company said that it is still reeling from the reverse migration that was seen during the various Covid waves in 2020 and 2021. At the same time, Goyal also believes that as the economy in cities opens up, many of Zomato’s delivery workers have moved to other jobs and roles.

“We think this is short-term in nature, as the post Covid economic recovery has brought back jobs in cities, and we lost some delivery partners to such jobs. On top of it, all the workforce which migrated to their hometowns (or villages) during the first Covid wave, hasn’t yet come back to the cities for work – thus hampering our Delivery Partner Acquisition Rate,” Goyal said in Zomato’s first annual report since its public listing in July last year.

Interestingly, Zomato’s leadership chose to answer self-fashioned questions in its annual report, a format which Goyal said is inspired by one of his favourite books: “All I want to know is where I’m going to die so I’ll never go there – Buffett and Munger – A Study in Simplicity and Uncommon, Common Sense”.

In light of the gig worker shortage, Zomato had halted the pilot of its Zomato Instant 10-minute food delivery service in Bengaluru and is also facing a crunch in some of the major metros owing to competition from rivals Swiggy, Zepto, Dunzo, Rapido, Ola Foods, BigBasket among others who are jumping in with both feet into the quick commerce and delivery game. According to a recent RedSeer report, India’s quick commerce market is expected to witness a 15X growth by 2025, reaching a market size of close to $5 Bn.

However, Goyal believes that this is a temporary flux. “We think things will normalise in a few weeks. We are also working on various long term initiatives to drive more stability of delivery partners in our fleet.”

Zomato, Swiggy Feel Gig Worker Crunch

Besides Zomato, Swiggy is also facing challenges in maximising its operations with its existing delivery fleet. It had halted operations of Supr Daily in five cities and temporarily shut down Swiggy Genie courier delivery service in certain cities as well. The entry of new players such as Zepto which have raised substantial capital also makes things complicated for the older incumbents.

But the gig economy extends far beyond just delivery services. According to a Boston Consulting Group study, more than 24 Mn Indians will be part of the gig economy by 2023-24 and 90 Mn before the end of 2030. But many of these workers belong to the non-tech sector, including construction and the manufacturing industry.

In the context of delivery workers, the current crunch mirrors the shortage of adequate talent in new-age startup roles. So retaining this talent is a major priority for gig economy platforms. Since the government’s social security code for app-based gig workers has not yet been notified officially, Zomato, Swiggy and others have resorted to their own policies for retention.

Swiggy is looking to introduce the Step Ahead accelerator programme for its delivery executives to transition into managerial roles within the company, while Zomato’s Goyal donated ESOPs worth $90 Mn to the Zomato Future Foundation, which passes on various benefits to delivery partners

“Our delivery partners are the face of our business. And I believe that quality education is the only thing that can uplift the quality of life for delivery partners’ families. With the Zomato Future Foundation, we are hoping to make a significant impact on the future generations of our delivery partners,” Goyal added about the transfer of ESOPs in the annual report.