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Lok Sabha MP Karti Chidambaram demands stringent gig economy regulation in Parliament citing lack of worker protection

Lok Sabha MP Karti Chidambaram reacted by calling the move absurd and dangerous while demanding stringent regulations.

Zomato

Karti P Chidambaram, Member of Parliament (Lok Sabha) from the Sivaganga constituency, flagged concerns in his zero-hour intervention on gig economy workers in the Parliament demanding stringent regulations for companies like Swiggy, Zomato, Uber, and Ola, among others*.

“These delivery companies need to be regulated. they can’t have these unrealistic and unreasonable delivery times, which is putting the lives of workers of these companies. I urge the (Union) government to come up with some guidelines for the protection of all workers in the gig economy.” — MP Karti Chidambaram

 

Chidambaram outlined how there were no protections for gig economy workers. “There is no classification whether these (personal) vehicles are meant for commercial deliveries,” he said. He also underscored how insurance companies refuse to give compensation if workers meet with an accident.

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The speech comes closely on the heels of Zomato’s 10-minute food delivery service which attracted flak from many users who concurred with the concerns highlighted by Chidambaram and suggested that the service by the company will only aggravate precarious working conditions of gig workers.

“There are companies which are valued in billions which operate in this gig economy. Companies like Swiggy, Zomato, Dunzo, Uber, Ola…their valuation is based on a principle called TAT – Turn Around Time. The shorter the turn around time of them providing the service, the greater the valuation is…But this delivery is done by workers who are not employees, who are driving a vehicle which is a personal vehicle but are doing a commercial delivery.” — MP Karti Chidambaram

The intense scrutiny comes on account of rider testimonies who complain that they are under undue pressure to meet these targets and face penalties if they miss them. It remains to be seen if the Union government pays heed to the demands made by the MP and gig workers are offered more protections under the law.

What clarity is required from Labour and Road Transport & Highways ministries?

The MP shot off a missive to Labour Minister Bhupendra Yadav stressing that there was an “urgent need to evaluate the actual status of implementation of measures prescribed under Code on Social Security, 2020 and compliance by companies as well as to widen the social security measures such as minimum wage, maternity benefits, and workers compensation.

“There is also a need to categorise gig workers as “workmen” like countries such as the United Kingdom, France and the Netherlands are doing, not only to ensure delivery of social security but also to uphold the dignity of their labour.” — Chidambaram in the letter

He said that the main matter of concern is that many companies that employ gig workers refuse to accord them the term “employee” and instead utilise a ridiculous thesaurus of words to abdicate their responsibilities towards these gig workers.

Chidambaram also sent a letter to the Minister of Road Transport and Highways Nitin Gadkari asking whether insurance companies can reject claims when a personal vehicle is used for commercial deliveries.

What are the questions posed at companies by Chidambaram?

Chidambaram met Zomato’s announcement with derision in a tweet: “This is absurd! It’s going to put undue pressure on the delivery personnel, who are not employees & who have no benefits or security, who have no bargaining power with Zomato.”

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He asked Zomato, and other companies relying on gig workers, to furnish the following details:

  1. Number of workers currently working with your organisation that may be categorised as ‘gig workers’
  2. Total accidents and fatalities among such workers during the course of working for the company and the amount of compensation they are entitled to in case of an accident
  3. Average daily earnings of a gig worker working with your organisation
  4. Average number of hours a particular gig worker working with you is available for work during the day
  5. Benefits, including group insurance coverage, provided by the company to the gig workers “partnered” with your organisation
  6. Number of gig workers who utilise their personal vehicles in the service of your organisation and the compensation they receive in return
  7. Existence of mechanisms or structures of collective bargaining within your organizations, specifically for gig workers whose services are being utilised by the organisation
  8.  Grievance redressal mechanism within the organisation to address the concerns, claims and queries of the gig workers
  9. Litigations initiated by the company against a gig worker who is working or was previously working with it
  10. Average training period for a particular gig worker and the material covered during training
  11. Evaluation of the incentives and if they have led to hazardous consequences like rash driving and flouting of traffic rules
  12. Steps being taken by the organisation to become a better workplace for gig workers, if any

Zomato began its blog post with a clarification that it does not put any pressure on delivery partners to fulfil its quick delivery promise.

“Nor do we penalise delivery partners for late deliveries. The delivery partners are not informed of the promised time of delivery. Time optimisation does not happen on the road, and does not put any lives at risk.” — Zomato

What is Zomato Instant?

Zomato will soon be testing a service in which it plans to deliver food within 10 minutes, according to a blog post by the company on March 21. The service is called ‘Zomato Instant’ with a pilot planned from four stations in Gurugram starting next month, the post added.

The food delivery platform revealed that the feature to sort restaurants by fastest delivery time is one of the most-used filters on the Zomato app.

“Nobody in the world has so far delivered hot and fresh food in under 10 minutes at scale, and we were eager to be the first to create this category, globally!” Zomato CEO and Founder Deepinder Goyal wrote in the post.

Goyal also noted that he felt the 30-minute average delivery time is “too slow”, and will soon “become obsolete”. “If we don’t make it obsolete, someone else will,” he added. Zomato’s announcement comes at a time when the 10-minute delivery, brought to the fore by quick commerce players, is under intense scrutiny. It is not surprising to see Zomato go down this path given its recent acquisitions and announcements.

How is Zomato planning to run ‘Zomato Instant’?

The publicly-listed company wrote that the “fulfilment” of its quick delivery feature relies on a dense finishing stations’ network, located in close proximity to high-demand customer neighbourhoods.

Goyal said that the company plans to rely on dish-level demand prediction algorithms and in-station robotics to keep the food sterile, fresh, and hot at the time it is picked by the delivery partner.

He explained that these finishing stations will house bestseller items (20-30 dishes) from various restaurants based on demand predictability and hyperlocal preferences.

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“We expect that the price for the customer will get significantly reduced due to demand predictability at a hyperlocal level while the absolute margin/income for our restaurant partners as well as our delivery partners, will remain the same.” — Goyal

This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

Disclaimer: This author was allotted shares in Zomato’s IPO.

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I cover several beats such as Crypto, Telecom, and OTT at MediaNama. I can be found loitering at my local theatre when I am off work consuming movies by the dozen.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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