“Aap vishaas nahi karenge, hum log kaise kaise jagah delivery karne jaate hain.. kahin paanch talla chadh ke jaana padta hai dopahar ke garmi mein. Monday ko aisi jagah gaye jahaan taalab ka pani raaste mein aa gaya tha baarish mein, pair ke aas paas machli ghum raha tha par customer zidd kar raha hai ki aap ghar aake delivery kijiye. Aap sochiye cyclone wala baarish mein, 10-12 kilometre door koi restaurant se deliver karne gaye hain. Kaun sunega ye sab? Company koi help karne nahi aata,” says Shan (name changed on request), a food delivery worker in Kolkata who has been working with Zomato for seven years now.

[“You won’t believe the places we have to go to make deliveries… in the afternoon heat, I had to climb 5 floors to reach the customer. On Monday, I went somewhere where the water from the nearby pond had overflown into the streets, there were fish floating near my feet but the customer was insistent on getting the delivery at their doorstep. In the cyclonic rains [Remal], we are delivering from restaurants 10-12 km away. Who will listen to us? The company is of no help.”]

This is the plight of delivery partners like Shan who have become the cornerstone of last-mile connectivity across cities. Come rain, heatwave or strikes, their work goes on.

App-based food deliveries that surged during the COVID-19 pandemic are becoming more convenient by the day, allowing people to order in from anywhere with minimal charges. For as little as Rs 30 (the offer is apparently customized), Zomato’s Gold service allows free food deliveries for up to 7 km for three months—a deal that is bound to lure more people to sign up.

But while the company’s profits have increased, for Shan and his colleague Tahir (name changed on request), things seem to have gotten worse.

“The company is forcing us to deliver from very far-off places but won’t pay us per kilometre to get to that far-off place. They calculate only from the restaurant to the customer’s place. So, we have to now work 14-15 hours to make what we earlier made by just working 8 hours a day,” says Tahir.

A food delivery partner working with Zomato in Mumbai also said that the company has implemented several changes over the past two years. Where he earlier made about Rs 75 for every 4 km, he now makes only a third of that. Incentives for fulfilling a certain number of orders have also reduced, he said.

Zomato recorded profits for a fourth straight quarter in March. Its quick commerce bet, Blinkit, also turned EBITDA positive. On paper, these are all good signs, so what explains the delivery workers’ problems?

A look at the numbers: For the fourth quarter ended 31 March 2024, Zomato’s consolidated net profit stood at Rs 175 crore compared to a loss of Rs 188 crore in the year-ago period. Sequentially, its profit was up nearly 27%. Its revenue from operations for the January-March period stood at Rs 3,562 crore. Through the financial year 2023-24, Zomato turned in a profit of Rs 351 crore compared to a Rs 971 crore loss in FY23.

While this indicates that business is doing well, a look at the financial metrics for the food delivery segment clearly shows that growth here has been stagnant. As a percentage of revenue, the food delivery business in the quarter ended March was two percentage points lower than for the December 2023 quarter.

The growth in user base has also been slow. Zomato’s average monthly transacting customers stood at 19 million in the March quarter, a mere 1% increase from the previous quarter. Through FY24, this number only grew 14%.

We have written in detail about the industry-wide slowdown in the food delivery segment in an earlier story. Here, we also mention that Zomato seems to be increasingly dependent on frequently transacting customers for growth in this segment, which has not really happened.

So, a slowdown in the segment and the rush to acquire more customers or increase the frequency of orders could explain why the company is going all out to deliver from faraway places in difficult weather conditions without compensating delivery partners commensurately.

But keeping delivery partners happy is key to Zomato’s food business, which still constitutes nearly half its revenue.

No better, but worse: Interestingly, during the earnings presentation, CEO Deepinder Goyal said that one of the factors behind the food delivery business’s improved EBITDA margin was cost efficiency. While it’s not clear what these cost efficiencies are, last-mile delivery workers are surely facing a squeeze.

“When we started, this was very lucrative. Now companies make money and just order us around. Our pay has suffered. The base fare we were paid has significantly come down from earlier and instead we now have to bring food faster, maintain the food temperature and travel greater distances. Petrol is not getting any cheaper either,” says Shan.

Both Shan and Tahir explain that the base rate per delivery within a 4-km radius is Rs 20. It used to be as high as Rs 80-100 seven years ago, says Shan. Beyond that, they receive a minimum Rs 8-9 per additional kilometre. This additional charge goes up to Rs 10-11 during peak ordering hours—lunch or dinner—and, during rains, it goes up to Rs 14 per km. For delivering from faraway restaurants, they also get an extra Rs 40 per delivery.

The rates also vary from city to city. A delivery partner for Zomato in Hyderabad says that he receives Rs 10 per km above the base fare and a rain surcharge of Rs 14-17 per km—higher than his Kolkata peers.

Despite these differences, one aspect is clear: over the past few years, the earnings of delivery partners has taken a hit. They all say that when calculating the pay, only the distance between the restaurant and the customer’s location is taken into account; they are not compensated for the distance they travel to get to the restaurants, no matter how far it may be.

The distances that delivery partners must now traverse is also taking on their vehicles. “We made investments when we came into this line of work. We bought a phone, a bike. The bike we use for deliveries, we pay its EMIs from our monthly salaries. But the amount it runs, by the time we finish paying these instalments, it’s in almost unusable condition. No Zomato will help fix or pay for it. What about that?” says a third Kolkata-based Zomato delivery partner.

The Morning Context reached out to Zomato for comment but did not receive any response till the time of publication. The story will be updated as and when it responds.

But delivery workers’ plight is also an industry-wide problem.

A wider issue: Shaik Salauddin, founder and president of the Telangana Gig and Platform Workers Union, tells The Morning Context that earnings since the pandemic have definitely come down for food delivery partners across companies. After deducting costs, they can barely make Rs 20 for every 4 km that they travel, he says. Salauddin, however, is not surprised that profit-making Zomato’s delivery workers also face the same issues.

“Companies will make profits but they are focused on customers’ interests, not the delivery workers… Look at the heat, there is no arrangement of water or washrooms for them. It is mentally and physically draining, they don’t care” he says.

Salauddin goes on to add that even accident coverage for riders is only when they are on duty. If they turn off their availability after having made deliveries and meet with an accident, the companies are not liable to offer them coverage because technically they were “off-duty”, he explains.

For things to be fair, the central and state governments will have to come up with policies as no company—profit-making or not—can fix it, says Salauddin.

Lead illustration by Ujjaini Dutta.