To make up for the skyrocketing prices of petrol and diesel, online delivery company Zomatao on Thursday said that it has increased the remuneration of its delivery executives by 7-8%. In a series of Tweets, Zomato founder and Chief Executive Officer Deepinder Goyal said the company has increased the pay structure of its delivery partners.
In a statement, Zomato said the massive hike in fuel prices had impacted the net earnings of Zomato delivery partners. However, the company is "not yet passing on this cost to our customers".
Petrol prices in some cities have already hit Rs 100, with the price of diesel not far behind. Zomato said the rise in fuel prices has increased the delivery partners monthly spending by Rs 600 to Rs 800 on average which is affecting their take-home income. Keeping this in mind, the firm has decided to launch an additional ‘distance pay’ component, over and above the remuneration that its delivery executives currently receive, and will also adapt to changes in fuel prices in the future. An additional payout for long-distance journeys is also being considered, as delivery executives often return to familiar localities after making a delivery far away. The company said it will either try to match delivery executives with an order that takes them back to their base locality within 15 minutes or pay them an additional amount for travelling far, the firm said.
Clarifying that these additional remunerations will be born by the firm, it will not pass on to its customers or restaurants partners.
“We are committed to making Zomato the best place to work for our delivery partners. We understand how fuel price hikes can impact their earnings and have decided to factor in such developments in their pay structure,” said Mohit Sardana, COO, food delivery, Zomato. He further added, “Both of these inclusions combined will increase their earnings by 7-8%.”
Zomato has already unfurled the fresh remuneration model in 40 cities and a similar model will be implemented in other cities in the coming weeks. There are more than 1.5 lakh delivery executives and the firm is continuing to expand its number to meet the rising demand for food delivery. The firm stated that the delivery partners cover a distance from 100 to 120 kilometres a day, using 60 to 80 litres of fuel in a month. Thus, the current fuel hikes have raised their running costs by Rs 600-800, which is about 3% of their monthly income.
The announcement comes soon after Zomato closed a $250 million funding round led by existing investors Tiger Global, Kora and Fidelity at a valuation of $5.4 billion.