Zomato will pay delivery partners more as a result of the high fuel costs, the company declared on Thursday. The Gurugram-based company said that the revised pay structure would include an additional component of distance pay that would be pegged to adapt changes in fuel prices. This comes only days after its several delivery partners went on strikes in various parts of the country, supposedly over insufficient pay, saying that fuel costs were clearing out their income.
The revised pay structure will be relevant over and above existing compensation, Zomato said in a statement. It will be changed based on changes in fuel costs to compensate delivery partners for the expense they take on to do food deliveries. The company confirmed that the extra segment of distance pay will be directly proportional to the increment in fuel costs.
Notwithstanding the new compensation part, Zomato said that it had recognized the effect of fuel cost increment in case of long-distance orders and introduced long-distance return pay. This will either enable delivery partners making long-distance deliveries to either receive another order within 15 minutes that would bring them back closer to their base areas of working or they will instead receive an additional payout for travelling the extra distance they take while returning back from a long-distance deliver to their base-working localities to get another order assigned.
The new considerations combined will increase the income of delivery partners by seven to eight percent, Mohit Sardana, COO of Food Delivery at Zomato, said.
“We have already implemented the new structure in about 40 cities and will be rolling it out in other cities in the coming week,” he added.
Zomato additionally said that it had expanded its “focus to understand and solve proactively for concerns raised” through a week by week review that they direct with its delivery partners. This appears to be the company’s response to the recent strikes that took place in cities including Chandigarh.
“For delivery agents, the bone of contention is a revision in the way Zomato calculates payment for deliveries based on distance. For orders up to 5.5 kilometres, the company would pay a flat rate of Rs. 30 and an additional Rs. 10 for every km beyond that. While the company has not changed the base pay, it will now pay one rupee per additional 100 metres over the 5.5 km limit, the executives said,” Indian Federation Of App Based Transport Workers (IFAT) National General Secretary Shaik Salauddin told Gadgets 360.
“While the firm would earlier pay agents Rs. 300, Rs. 600, and Rs. 800 for completing 11, 16 and 20 orders, respectively, in a day, delivery executives say the new structure is nowhere as attractive. They claim the company has reduced the payments to Rs. 250 for 10 orders, Rs. 400 for 15 orders, Rs. 600 for 19 orders, and Rs. 850 for 23 orders, in a day,” Salauddin said.
Presently, Zomato claims to have a base of over 1.5 lakh delivery partners in its fleet. It is also in plans to fortify that number further.
Zomato recently raised $250 million (generally Rs. 1,811 crore) at a valuation of $5.4 billion (generally Rs. 39,100 crores). The company is also planning to file for its initial public offering (IPO) later this year.