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Swiggy delivery executives go on strike in Hyderabad, lash out against company for ‘diverting’ orders to third-parties

Swiggy delivery executive strike in Hyderabad

Hundreds of delivery executives working with Swiggy in Hyderabad have been on a 48-hour strike since Tuesday, protesting a massive drop in income over the past few weeks. Executives have claimed that the food-delivery aggregator has changed the payment and incentive structure around a month ago, due to which they make only around Rs 15 per order, from around Rs 35 earlier.

The strike has seen participation from hundreds of executives across the city. On Tuesday, they held demonstrations in front of major “high volume” restaurants. Their largest protest was held in front of the Madhapur police station, in whose jurisdiction Swiggy’s Hyderabad office is located. The police intervened by calling representatives from Swggy for talks with the protesting executives. Madhapur DI Naveen Kumar said that the representatives took an undertaking from the executives with a list of their demands, and promised to relay it to company leadership in Bengaluru. They asked for two days to address the executives’ concerns.

This is, in fact, not the first strike or protest against Swiggy in the recent past. A month ago, when the new payment structure was announced, Swiggy executives held widespread protests in Delhi, Hyderabad and Chennai.

What are the executives’ problems and demands?

Minimum pay per order lowered: Multiple delivery executives told MediaNama that their income had dropped by as much as 60% of what they used to make before the pandemic began. Around a month ago, they said, the base pay had been dropped from nearly Rs 35 to less than Rs 15 per order. They called for the base pay to be increased to the earlier amount for single orders and Rs 20 per batch order (when executives get more than one order in a single trip).

Transparency in incentive payments: The executives also want transparency in the way “incentives” are paid to them — extra money paid for delivering a certain number of orders, working a certain number of days or hours and so on. They said the incentive structure keeps changing, and there is little predictability. Some executives said monthly incentives, given for being on duty a certain number of days a month, had been removed.

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“Third-parties” taking lion’s share of orders: Executives claimed that a bulk of the orders being made in Hyderabad on Swiggy were being routed to bike-taxi aggregator Rapido and logistics company Shadowfax. Executives say that orders have dried up because of this, and that they are lucky if they get 8-10 orders during a normal shift during the day.

The executives demanded that Swiggy return the payment structure to where it was was a month ago. They have also called for Swiggy to stop giving orders to third-parties, thereby increasing their chance of making more money during the day.

Planned, but loosely organised strike

The strike itself has been a very loosely organised affair. Executives living in certain locations have banded together to form groups that are organising entirely over phone calls and WhatsApp. Although they have received the support of the Indian Federation of App-based Transport (IFAT), most executives who we spoke to didn’t seem to know anything about the organisation or any other union.

A group of nearly 30 such executives had gathered near Sarvi Hotel on Road No 1, Banjara Hills — a popular “high-volume” restaurant — on Tuesday evening. They were residents of nearby areas, who had become friends over the years after having bumped into each other at restaurants while they waited to pick up orders. They sat there restless, not sure of whether the strike would be successful.

Javed (name changed), one of the more jovial members of the group, said he had been working with Swiggy for over two and a half years. He showed his daily earnings from the previous day, where he had spent ten and a half hours on duty, but made a little more than Rs 700 (refer to screenshots attached below). Some of this money had to be spent on fuel expenses, which is anywhere between 30% and 50% of earnings on a typical day. “What is even the point of spending 10 hours on the road if I make less than Rs 400?” he asked, “I can’t feed my family with this money. I will have to look for something else soon.”

A Swiggy delivery executive shows his income and duty hours on Monday. He worked for ten and a half hours to make around Rs 700. He made Rs 15 and Rs 16 on two of the orders he delivered that day.

The same executive shows his earnings from Monday: He made less than Rs 30 on four of the six orders shown here.

Other executives said that the Rs 15 base pay component was only one of the factors when it came to their problems with delivery fees. One explained: “We get Rs 15 only for short-distance orders, say shorter than 2 km. If we get an order that is 5 km away, we get paid around Rs 6-8 per km, depending on the time of day and other factors like surge pricing and so on. Is there any sense in making Rs 30-40 on a delivery that requires 10 km of to-and-fro driving. Earlier we could make at least Rs 60 on such orders.”

They also called out Swiggy for collecting higher-than-before delivery fees from customers, but refusing to pass this amount over to the executives.

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Most of the executives were unwilling to go on record as they feared Swiggy would suspend their IDs, making it impossible for them to ever work with the company again. 

Another delivery executive, a resident of nearby Mallepally, said he had been Swiggy for four years. A father to three young children, he said working with the company didn’t make sense to him anymore. He recalled his experience from last week, when he spent hours waiting in front of restaurants waiting for an order to appear on his phone, only to be left disappointed. On a “lucky day”, he said he would get two orders between three hours of duty.

When asked whether this could be blamed on the general drop in orders volumes due to the pandemic, he said, “I would have liked to believe this theory, but it is not true. Last week, while I sat waiting for orders, I saw guys working with Rapido and Shadowfax walk into restaurants several times an hour to collect parcels. They were getting their orders from the Swiggy app. Sure, there might be fewer orders overall, but I don’t believe it is the reason for our problems. I believe Swiggy is favouring Rapido and Shadowfax over us.” Other executives who were listening to this conversation closely jumped in enthusiastically, narrating similar experiences of their own. One of them spoke, almost shouting in anger: “I spoke to many restaurant managers. They said order volumes are nearly normal. So why is Swiggy not giving them to us?”

This animated discussion was broken up when an middle-aged executive, who seemed to be a leader of the group, arrived at the location. He called everyone to accompany him to a nearby restaurant where some delivery executives were apparently still working. “Come, let’s stop them,” he said, and within moments the place was empty. We trailed them to at least two such locations, where they were able to politely convince executives, all working directly with Swiggy, to show solidarity to the strike and cancel their orders.

Elsewhere, however, things weren’t so peaceful. Some Swiggy delivery executives in the area reportedly roughed up another executive, who lodged a complaint with Banjara Hills police. N Kalinga Rao, Banjara Hills SHO, said his team had gone to the location and brought a few of the men to the police station. “But the complaint couldn’t be traced to the person who lodged it. The number from which this person called 100 was switched off. We haven’t been able to take it forward,” he said. The men were let go late at night after Majid Hussain, a local municipal corporator and former Hyderabad mayor, intervened in the matter.

Did the strike have an impact on Swiggy’s services?

Despite the widespread participation in the strike, Swiggy services seemed largely normal, with customers facing no trouble in placing orders. However, on Wednesday, users were shown messages telling customers services were restricted, and that “slight delays” were expected. Many users raised complaints (examples one, example two) to Swiggy’s customer care account on Twitter.

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‘We are giving them one more day’

Shaik Touseef, one of the informal leaders of the strike, confirmed that Swiggy representatives had asked until Thursday to address their concerns. However, Touseef said there isn’t much hope. “The company knew about our plans to protest nearly two weeks ago. But they did not do anything about it,” he said.

Touseef alleged that Swiggy was diverting orders from executives such as himself to those working with Rapdio and Shadowfax as it was able to make more money that way. “When we get an order, Swiggy gets commission only from the restaurant, out of which it pays us our delivery fee. But when a third-party like Rapido or Shadowfax get an order, Swiggy gets commissions from both them and the restaurant,” he said.

Touseef said the executives were giving Swiggy “one more day” until Friday to address their demands. When asked what they would do if Swiggy remains noncommittal, he didn’t have a specific answer but said the situation would get “ugly”.

Meanwhile, Sheikh Salauddin, national general secretary of IFAT, said Swiggy was trying to break the strike up by enticing executives with new offers. “They are spreading word about a new offer during the upcoming IPL season, with guaranteed surge pricing and other bonuses. Sure, the executives will make some extra money, but it will only be for four weeks. After that, everything will inevitably return to normal. We need a long-term answer from Swiggy.” IFAT has extended its support to the executives, and has requested the state’s labour and transport departments to intervene as well.

Swiggy denies executives’ claims, says it pays executives on-par with industry standards

Meanwhile, in response to MediaNama’s questions on the subject, Swiggy denied the executives’ claims of a drop in base pay per order. A company spokesperson said that the average earning per order for many executives in Hyderabad was higher than Rs 45. She said that “highest performing” partners were making over Rs 75 per order. “This Rs. 15 is ONLY ONE of the many components of the service fee. No active delivery partners in Hyderabad have made only Rs 15 per order in the last four weeks. It is important to note that the service fee per order is based on multiple factors to adequately compensate our partners including distance travelled, waiting time, customer experience, shift completion and incentives.”

The spokesperson emphasised that Swiggy paid its delivery executives at par, if not higher, than industry standards even with the revised payout.

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On claims of orders being diverted to third-parties: The Swiggy spokesperson said that third-party companies such as Rapido or Shadowfax only serve as supplements to the existing delivery fleet. She explained that Hyderabad was one of the company’s strongest markets in terms of utilisation (use of delivery fleet) and that the number of orders here was highest across all metros. The spokesperson indicated that the use of third-parties was essential to maintain optimum delivery times on orders. She added that Swiggy has, in fact, recently hired new delivery executives in Hyderabad. The company, however, did not respond to a question regarding the extent of diversion of orders to third-parties.

We only leverage third-party companies as a supplement to our delivery fleet. In the run-up to the cricketing season, we have ramped up our own fleet through aggressive hiring while also getting the support of third-party companies to cope with the rising demand. This is a common practice across e-commerce companies to ensure fulfilment of orders — Swiggy spokesperson

Return to 70-80% pre-Covid order value: Responding to a query about the overall change (drop or rise) in orders due to the pandemic,  the company claimed that it has reached 70-80% of pre-Covid order values. The spokesperson claimed that during the early days of the lockdown, the restaurant supply was between 25% and 40% of pre-Covid levels. She added that the company expects a “robust growth” in order volumes in view of the approaching festive and cricketing (IPL) season.

“We helped delivery executives during pandemic”: The company also claimed that it offered financial support to nearly 40,000 delivery executives to the tune of Rs 18 crore in earnings guarantee during the lockdown.

Here is Swiggy’s full statement:

MediaNama: A lot of delivery partners have complained that the minimum amount they make per order has been reduced to Rs 15, which has led to over a 50% fall in incomes. They say this change happened a month ago. Could you confirm this to us, and if true, why was this done?

Swiggy: Most delivery partners in Hyderabad make an average of over Rs 45 per order, with the highest performing partners making over Rs 75 per order. This Rs. 15 is ONLY ONE of the many components of the service fee. No active delivery partners in Hyderabad have made only Rs 15 per order in the last four weeks. It is important to note that the service fee per order is based on multiple factors to adequately compensate our partners including distance travelled, waiting time, customer experience, shift completion and incentives. Regular competitive benchmarking shows that these are at par, if not higher than the industry standards, even with the revised payout. [emphasis theirs]

MediaNama: Partners claim many orders are being routed to people working with Rapido and Shadowfox. This was a consistent claim I found across the city yesterday, with at least 10 to 15 partners at three locations telling me the same thing. Could you explain the exact commercial relationship that exists between Swiggy and Rapido and Shadowfox, and any other similar company? To what extent are the orders being diverted to these companies?

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Swiggy: We measure both driver earnings and utilization very closely. Adequate utilization of our own fleet is a win-win as it helps us ensure that our delivery partners logged remain fully productive, which in turn enables the best earning opportunities for them. Given that Hyderabad is one of our strongest markets, utilization and the number of orders fulfilled by our partners is the highest across all the metros. We only leverage third-party companies as a supplement to our delivery fleet. In the run-up to the cricketing season, we have ramped up our own fleet through aggressive hiring while also getting the support of third-party companies to cope with the rising demand. This is a common practice across e-commerce companies to ensure fulfilment of orders.

MediaNama: Can you tell us about the overall change (drop or rise) in order volumes since the pandemic began?

Swiggy: The early days of the lockdown saw a considerable drop in restaurant supply, anywhere in the range of 25 – 40% of what it was pre-COVID. Consequently, we noticed that although consumers had the intent to order online, they did not complete the purchase due to factors including limited availability of their favourite restaurants. As a result, order volumes across food delivery were impacted.

During this phase of the lockdown, when many cities were shut, Swiggy 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. At the same time, Swiggy worked with restaurants to get more and more of them back online.

The improved supply and focused efforts by Swiggy, we have been seeing a steady uptake in order volumes over the last two months. Currently, we have reached 70-80% of the pre-COVID order value. As the food and essentials delivery segment continues to register an upward trend in orders and as the festive and cricketing season approaches, we’re expecting a robust growth in order volumes which will create a win-win for our delivery partners, the restaurant ecosystem and us.

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