Zomato hikes its delivery partners salaries to cushion impact of fuel price rise– but the riders want more

• Along with a hike in salaries, delivery partners will now get an additional ‘return travel’ fee if they have gone far away from their base area.
• Fuel prices in the country have been rising continuously for over 10 days now.
• Zomato along with its rival Swiggy is one of the key gig economy players in the country.

Indian food delivery unicorn Zomato today announced that it hiked the salaries of its delivery partners due to rising fuel prices in the country.

Fuel prices in the country have been rising continuously for over 10 days now. In Delhi alone, petrol costs ₹90.93 while diesel price is now at ₹81.32, in Mumbai petrol is at ₹97.34 while diesel costs ₹88.44.

Zomato said that with the rising petrol prices, its riders who travel 100-200 km every day, are now spending as much as ₹800 more per month. Along with a hike in salaries, delivery partners will now get an additional ‘return travel’ fee if they have gone far away from their base area.

“We understand how fuel price hikes can impact their earnings and have decided to factor in such developments in their pay structure. Both of these inclusions combined will increase their earnings by 7-8%. We have already implemented the new structure in about 40 cities and will be rolling it out in other cities in the coming week," said Mohit Sardana, chief operating officer of food delivery at Zomato.

But the partners who acknowledge the salary increase, say it could have been more. According to delivery partners that Business Insider spoke to, different delivery partners have different remuneration that they receive according to the city they work in and how long they have been working with the company.

The hike amount won't be a fixed amount but will be proportional to the rise in fuel prices, said Zomato.

“I get paid ₹5.25 per kilometre, now while also returning from the delivery destination we get paid if we don’t get an order within 15 minutes. While this is great, we believe it could have been more. Fuel prices are rising every day, and I spend as much as ₹10,000 on petrol every month,” said one of the delivery partners from Zomato, requesting anonymity.

Zomato along with its rival Swiggy is one of the major gig economy players in the country, where they employ thousands of riders for food delivery. According to a Goldman Sachs report from November 2020, for Zomato, which alone employs over 200,000 riders, delivery is 75% of its total revenues in India.

Zomato, founded in 2008, is headed for an initial public offering (IPO) in 2021, and recently raised $250 million which pushed its valuation to $5.4 billion from $3.6 billion.

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