Urban Company to reduce commissions, increase earnings for gig workers after facing backlash

Amidst concerns over the high commission rates and low wages for its service partners, Urban Company (UC) on Thursday announced that it has decided to reduce the commissions charged from its service partners as well as a marginal increase in the payouts.

This comes after service delivery partners (beauticians) staged a protest a few days ago in Delhi demanding pay-parity. The company earlier released detailed data on the earnings of its delivery partners and denied allegations that surfaced on social media saying that some executives made a meagre Rs 67 for four orders during the day.

The company has now released a 12-point programme to improve the earnings of its workers. Under the new policy, the digital-first services firm entails a marginally increase in the prices of several high demand services across categories.

In terms of commissions, UC said that for the beauty categories (in which almost all our women partners work), given the impact of COVID-19 and other factors, we are reducing the highest commission slab from 30 per cent to 25 per cent.

Earlier, commissions ranged from 8.5 per cent for small orders to 30 per cent for high-ticket orders. Commissions will now range from 8.5 per cent to 25 per cent. The highest slab currently applies to high-value orders and this change will now help partners earn more on these high-value orders (shown below is the commission graph for one of our beauty categories - Salon at home for women). Average commissions after this change come out in the range of 20-22 per cent, it added.

Similarly, the new policy envisages aims to cap the penalties on those workers who weren't able to deliver the services. The cap price for penalties has been halved to Rs 1,500 from Rs 3,000 earlier. In addition, the company also said that it will transfer the entire amount, collected from the customers due to order cancellations, to its partners.

The various better livelihood measures for the delivery partners, as a part of the new action, will involve insurance, vaccination coverage, skilling and women SOS helpline.

How much does a UC partner earn?

As per the data shared by the Urban Company, on average, a service delivery partner earns Rs 34,657 on a monthly basis of which the company charges Rs 7,622 (22 per cent commission). However, for the delivery service partners who are able to process more than 30 orders per month, the payouts are in the range of 47,745-Rs 60,024 of which the commission charges are between Rs 10,174-Rs 12,244 respectively.

On average, a partner spends 69 hours monthly on the platform earning Rs 277 per hour.

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