Ishaan Khaperde has studied the economics of food delivery by Zomato India and here are the results from the point of view of the delivery person. The data has been culled from videos shared by delivery boys like the one linked here. The delivery frequency is the least on Mondays and reaches a peak with dinner time on Sundays when it is three times that of Mondays. The base delivery payment for up to five kilometers distance combined for pickup from the restaurant and delivery to the customer is Rs 22 on an average while above five kilometers the delivery person gets Rs 11 per kilometer on an average in addition to the base delivery payment. The pickup plus delivery time is about 30 minutes on an average for short orders of less than 5 kilometers while it is 50 minutes on an average for long orders above 5 kilometers. The daily mix is about 30% short orders and 70 percent long orders with the short orders on an average being 2 kms or so and the long orders being on an average being 9 kms or so. The delivery persons on an average operate for 12 hours. Thus, by solving for these parameters and rounding off [30 x number of short orders + 50 x number of long orders = 12 x 60, number of short orders/(number of short orders+number of long orders)=0.3], assuming that they are continually delivering orders, delivery persons can at the most squeeze in 4 short orders and 12 long orders per each 12 hour day. The payment for this is [4 x 22 + 12 x (22 + 4 x 11)] Rs 880.
The total distance covered on an average is 120 kilometers per day. Assuming a coverage of 40 kms per litre in stop and start city traffic at higher driving speeds this means a petrol consumption of 3 litres at a cost of Rs 330. Add another Rs 50 per day towards two wheeler depreciation, insurance and maintenance cost and the total cost comes to Rs 380. Thus, the net earnings are Rs 500 for a 12 hour day which comes to Rs 333 per eight hour day. Whereas the statutory minimum wage in Madhya Pradesh in urban areas for semi-skilled labour like driving a motor cycle is currently Rs 411 per day. Conversely, assuming double wages for the extra four hours of work done, statutorily the wages for 12 hours of work should be Rs 822 and not Rs 500.Moreover, the delivery persons face many challenges like having no place to sit in the shade in restaurants, having to climb up the stairs of buildings where there are no lifts or where use of lifts are prohibited to service persons and also face jams and diversions enroute to delivery which further adds to their troubles.
An analysis of the prices charged by Zomato for the food ordered as compared to the prices that the restaurants charge for in dining, shows that there is a mark up of about 10%. So Zomato is not only grossly underpaying its delivery persons but also overcharging its customers 😜.
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