A CASE STUDY ON

DELIVERY PARTNERS LIGHTENING STRIKE AT

ABOUT SWIGGY

Swiggy is India's largest and most valuable online food ordering and delivery platform. Founded
in 2014, Swiggy is based out of Bangalore, India, and as of March 2019, is operating out in 100
Indian cities. Swiggy is a phoenix that rose out of Harsha & Nandan's earlier venture, Bundl
Technologies. After a slow start, Swiggy snowballed into an unstoppable force that is now
changing the way India eats. The beautiful journey of Swiggy started back in 2014 when two BITS
Pilani graduates, Sriharsha Majety and Nandan Reddy decided that they wanted to make life
easier by changing the way India eats - all with just a tap! With their idea of “Hyperlocal Food
Delivery”, all they needed was the tech to power it, so they were introduced to Rahul Jaimini,
who brought this vision to life with the first website. And with this, Swiggy was launched as a
food ordering & delivery platform.

In August of 2014, Swiggy began operations by signing up with few restaurants in Koramangala,
Bengaluru. Soon enough, the first team of Hunger Saviors came into action to deliver food within
40 minutes. Shortly after, Swiggy raised its first round of funding and launched the app in May of
2015. But, the most amazing thing was that the technology which delivers great food right to your
doorstep was completely developed in-house. Swiggy has received investments worth USD 155.5
Million via six rounds of funding. Investors include SAIF Partners, Harmony Partners, Naspers,
Norwest Venture Partners, Bessemer Venture Partners, and Accel Partners. With love and support
from consumers, Swiggy expanded far and wide, first through the entire city of Bengaluru and
then across the entire country. As they say, the rest is history.
Today, Swiggy is the leading food ordering and delivery platform in India. Swiggy works by acting
as a bridge between customers and restaurants. It utilizes an innovative technology platform that
allows customers to order food from nearby restaurants and get it delivered at their doorstep. With
Swiggy, customers do not have to keep the contact numbers of various restaurants and eateries in
their locality. Swiggy works as a single point of contact for ordering food from all restaurants that
may be there at a particular location. Swiggy has its own team of delivery professionals who
pickup orders from restaurants and deliver it at the customer's doorstep. This has made the task of
ordering food a lot easier for customers. Restaurants also gain by getting more orders and avoiding
costs and efforts associated with maintaining their own delivery personnel.

The innovative technology, large and nimble delivery service, and exceptional consumer focus at
Swiggy enabled a host of benefits that includes:

 Lightning Fast Deliveries

 Live Order Tracking
 No Restrictions On Order Amount
 Pleasure of Enjoying Your Favourite Meal Whenever the Customer Had Like it.

WHAT SWIGGY BELIEVES IN?

 Consumer Comes First

 Strive For Excellence
 Be Honest and Display Highest Level of Integrity
 Exhibit Bias For Action
 Stand up, Disagree and Commit
 Be Humble
 Act Like An Owner
 Always Be Curious
 Always Be Learning
CHALLENGES/PROBLEMS FACED BY DELIVERY PARTNERS

Swiggy, a leading food ordering and delivery platform in India, had to partially withdraw food
delivery services in Chennai, owing to a flash strike by its delivery workers. The Delivery staff in
Chennai went on a strike on 5th December, 2018 to protest against the newly devised salary plan
which cut Re 1 from their first four kilometres of coverage. On December 5, people from parts of
Chennai started tweeting about how their favourite online food ordering platform, Swiggy, failed
them by not delivering food at their doorstep. It was just a handful of delivery persons, in their
trademark orange and black uniform, who just gathered in city corners and asked their company
executives to give clarifications on their wage concerns. The self-organized protest was the result
of a unilateral decrease in delivery charges by Swiggy. The demands of Delivery Workers were
simple. The salary of delivery staff had been reduced from Rs 36 to Rs 35 for the first four
kilometres they covered. The delivery staff was protesting against this newly devised salary plan
and against the unwarranted cut in their incentives for petty reasons. This, from a company, whose
valuation has been estimated at $3.3 billion. In parts of South Chennai, a message saying
‘Temporarily Unavailable. We are sorry. Delivery is not possible at the moment due to unforeseen
circumstances’ appeared on the Swiggy App.

DIPPING WAGES

When the base rate of delivery was reduced, the workers initially didn't pay much attention to it.
But after two days, they started realising that this Re 1 cut was making a huge difference in their
total earnings. The daily wage started dipping by Rs 150-250, going up to Rs 1,000 over the week.
Since the incentives are linked to delivery earning, this dip caused a real decrease in their earnings
as well. This hurt the workers most. According to the Delivery Workers, they were not being paid
as per Kilometers now. Earlier, when they used to go about a long distance of say 6 km for delivery,
they got Rs 70. But, now this has been reduced to Rs 50 to 55. Further, the Swiggy’s Management
has also reduced the Waiting fees that too without informing the delivery staff. Earlier, Swiggy
used to pay the waiting fees to its delivery boys on Fixed Time Basis but as of now, they have
shifted its focus to Per Minute Basis which goes to the maximum amount of Rs 20. That is, even
if the delivery person waits for around 40 minutes in the restaurant for the food being prepared,
then also he will get only Rs 20 instead of getting Rs 40 earlier.
THE SWEET TRAP OF INCENTIVES

It is not the delivery fee that is attracting a person to a delivery job in Swiggy, but the bait of
‘Handsome Incentives’ offered by the company. Swiggy offers three types of incentives to a
delivery person or ‘delivery partner’, as they term it. These are a Week-Day Incentive, Week-
End Incentive and a Monthly Incentive. The factors used to calculate these incentives are hours
of work, earnings from each delivery and the number of rejects (of orders).

The tables given below shows how the incentives are being calculated.
According to this table, to earn a week-day incentive, a person has to deliver seven out of 10 peak-
time orders. The peak times are from 11 a.m. to 3 p.m. and 7 p.m. to 11 p.m. To attain the maximum
week-day incentive of Rs 1,000, a delivery person has to earn Rs 4,400 or more from delivery.

Since the delivery charges alone are never enough for a person to survive, this incentive system
encourages them to work hard and for longer hours, letting go of their right to work eight hours,
which was earned through long struggles. On this account, TN Labour published a report whereby
they calculated that a worker will have to work for 16.6 hours a day for 24 days a month, if he
wants to earn the maximum incentives of Rs 14,000 (i.e. Rs.7,000 monthly incentive + Rs.4,000
weekly incentive for four weeks + Rs 3,000 week-end incentive for four week-ends). Further, if
the rates are reduced, then the working hours will increase to 18.7 hours a day.
MANAGEMENT’S SAY IN THE CONCERNED ISSUE

The Delivery Partners associated with Swiggy urged the company to increase the per order pay
and restore the incentive amounts that had been reduced subsequently. Other demands of delivery
staff included the regularization of per mile compensation, more avenues to communicate with the
organization on delivery related problems, and ensuring that personnel do not face “police
harassment late in the night” when they carry out deliveries.

Swiggy’s Management Team said that the services were disrupted only in handful of areas. They
quoted that “it is their constant endeavour to provide delivery partners with industry-best payouts.
The revised payout scheme is in alignment with the efforts of their partners on ground and takes
various parameters including peak hours and distance into consideration. A Swiggy Spokesperson
said that they remain committed to serving the city of Chennai, while ensuring that their delivery
partners have access to additional earning opportunities, incentives and benefits. They regret for
the inconvenience caused to their consumers in Chennai and worked hard to resume the services
in those areas. While the revision of the payout scheme was done, Swiggy was reportedly working
with delivery executives to explain how it will not result in a reduction in overall payout.

After that, the strike was temporarily called off since the management has agreed to meet the
demands of the workers. The workers, however, have also made it clear that they would resume
the strike after a week if the management fails to fulfill the promises. As per the delivery staff in
Chennai company sought a week to complete the office formalities to restore their benefits. The
decisions regarding the benefits were taken at the head office in Bengaluru. Further, if the company
fails to honour the deadline, they will have to face a more intense protest.
REFERENCES

S.B, N. (2018, December Saturday). The Trap of Incentives: Swiggy Delivery Persons Lightning Strike in
Chennai. Retrieved from News Click: https://www.newsclick.in/trap-incentives-story-behind-
swiggy-delivery-persons-lightning-strike-chennai

Discover Our World. (2019, September Friday). Retrieved from Swiggy:

https://careers.swiggy.com/discover-our-world/

Swiggy- Company Profile. (2018, January Sunday). Retrieved from Dailyhunt:

https://m.dailyhunt.in/news/india/english/news+patrolling-epaper-
newspatr/swiggy+company+profile-newsid-80728099

Swiggy Services Disrupted in Parts of Chennai: Delivery Executives Protest. (2018, December Monday).
Retrieved from News Minute: https://www.thenewsminute.com/article/swiggy-services-
disrupted-parts-chennai-delivery-executives-protest-92828

Swiggy Workers are the Latest Victims of the Incentive Trap. (2018, December Tuesday). Retrieved from
TN Labour: https://tnlabour.in/featured/7701
 MBA-III-B

Industrial Relation And Labour Laws (IRLL)

CASE STUDY

ON

“DELIVERY PARTNERS LIGHTENING STRIKE AT

SWIGGY”

Submitted by: Submitted to:

Rahul Arora Dr. N. Malati
09512303918 Director, DIAS