Zomato delivery boys go on strike in Mumbai, Bengaluru after food app cuts incentives

Zomato delivery executives in Mumbai and Bengaluru went on a mass strike on Monday to protest against the restaurant aggregator's decision to slash incentives which gives less money per delivery.

The executives allege that the new incentive structure would hurt their earnings. Zomato which earlier used to pay Rs 40 per delivery to its executives would now pay Rs 30 for each delivery respectively.

The restaurant aggregator had disseminated a message regarding the revised pay structure last Friday, to be applicable from Monday. Preempting non-cooperation from the executives, Zomato has already informed restaurants about a rider churn this week. The company has taken this decision to rationalise costs on the back of strong competition from rivals Swiggy and UberEats.

Also Read: Zomato suspends its Infinity Dining programme amid protests by restaurants

According to the protesting food delivery executives, they will have to do extra deliveries in order to earn the same incentives under the revised payout structure. But, Zomato has said that it has enabled them to carry out more deliveries in the same duration by lowering average delivery time.

"Roughly, we have to do three-four extra deliveries for each level of incentives. I end up doing deliveries for at least 12 hours per day, and sometimes it has gone up to 14-15 hours as well," Prashanth, a Zomato food delivery executive told The Times of India.

Under the new incentive structure, the delivery executives will get an incentive of Rs 850 for 46 touchpoints. This means they will now get Rs 18.6 per touchpoint as against Rs 20 per touchpoint offered earlier.

Also Read: Zomato fires 540 employees; says automation made several roles 'redundant'

In the face of stiff competition in the market, Zomato earlier this month had laid off 540 employees at its Gurugram office which is about 10 per cent of the overall strength at its head office in India. The company had fired employees from its teams across customer, delivery and merchant support segments. It had also fired 60 employees from its customer support team in August.

The platform started off in 2008 and has expanded to 24 countries so far. It services 10,000 cities globally. In India, it serves 25 million customers in over 500 cities and is valued by analysts at between $3.6 billion and $4.5 billion.

Zomato is backed by Silicon Valley venture fund Sequoia Capital, Singapore government's Temasek Holdings and Indian e-commerce player Info Edge. The company saw its revenue shoot up to $206 million in 2018-19 from $68 million in the previous year, primarily driven by its food delivery vertical, according to the company's annual report. It spent $500 million during FY19, a six-fold jump from the $80 million spending in the previous year. Its losses stood at about $294 million in the fiscal.

Also Read: Zomato set for 10x growth in 5 years; create more jobs: CEO Deepinder Goyal

(Edited by: Manali)