Zomato will pay more to delivery partners, absorb the impact of rising fuel prices

As rising fuel prices pinch the pockets of its delivery partners, food technology platform Zomato has put in place a revised compensation structure for them that will now include a remote payment component. He also introduced a long-distance return payment, which means that for every completed long-distance order, his delivery partner would receive another order within 15 minutes that would bring them back closer to their base place of work or that they would get extra payment for going the extra distance.

Zomato CEO Deepinder Goyal said on Twitter that the company is not yet passing this cost on to its customers.

“We are committed to making Zomato the best place to work for our delivery partners. We understand the impact of fuel price increases on their income and have decided to factor this into their salary structure. These two inclusions combined will increase their revenue by 7-8%, ”said Mohit Sardana, COO, Food Delivery, Zomato. The company has already implemented the new structure in around 40 cities and will roll it out to other cities over the coming week.

The platform supported by Tiger Global had been criticized for being the lowest performing digital platform in the Fairwork India ranking last year. Goyal then tweeted that the company would do its best to improve working conditions in order to perform better next year.

Fuel prices have been on the rise in India for several days, with gasoline prices exceeding Rs 100 per liter in Rajasthan.

On average, a Zomato delivery partner drives between 100 and 120 km per day, consuming 60 to 80 liters of fuel in a typical month, depending on the company. The recent price increase equates to an additional monthly expense of 600 to 800 rupees, which is about 3 percent of monthly income from her net income. It currently has 150,000 delivery partners in its fleet who earn an average of 20,000 to 25,000 rupees per month.

Swiggy, backed by Tencent, also has a plan underway to cushion the impact of rising fuel prices on passengers, sources say. The startup currently has more than 130,000 delivery partners on its platform.

“My fuel cost has gone up to Rs 100 per day and it could end up hurting my income by Rs 2,500 per month,” said a Swiggy delivery partner who places 15-20 orders per day in Bengaluru.

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