Abhiraj Bhal , Co-Founder UrbanCompany. (PC-Facebook)
With an aim to increase the income of partners, on-demand services provider Urban Company has come up with a 12-point programme. This comes in the wake of women partners taking to the streets last week demanding better pay, lower commission rates and safe working conditions, among other things.
In an interaction with Moneycontrol, Abhiraj Bhal, co-founder, talks about some of the hot-button issues such as minimum guarantee and customer sensitisation. Edited excerpts:
What are some of the key measures taken by Urban Company to address partners’ concerns?
On the earnings part, the biggest point is blocks. That ends up hurting partners more than anything else because when they are blocked they have no jobs. Leaving quality blocks aside, we are stopping all other blocks. That's 80% of the blocks ending, leaving more time for partners to work on the platform.
What are some of the things for which partners get blocked right now?
There is a minimum acceptance block. There are blocks related to specific types of jobs partners would like to do. For instance, a cleaning partner wouldn't like to do bathrooms but be okay with sofa cleaning, but customers would like all types of jobs.
In the pandemic, we started the practice where when you start a job, you have to take and send a selfie. This prevents partners from sending somebody else on their behalf and also serves as check on whether they are wearing masks and so on.
We are not saying we are compromising on these principles of the marketplace. There are other ways of driving this behaviour change by focusing more on training and service quality.
You also plan to increase service pricing. Which categories will see the price hike?
This will happen in some select high-demand service categories where costs have caught up. We will make some small tweaks. This will not be major. It will only be about 1-2 percent in select categories where the rate is very low compared to offline.
You are also reducing commissions.
We are dropping commissions for the highest slab from 30 percent to 25 percent. For all the beauty categories, the blended average will come down to 20-23 percent. In our homes business the blended average was anyway already at 20-22 percent.
Besides this we will also be reducing the monetary penalties. Earlier we had no cap. Then we put a cap of Rs 3,000 per month. We have further reduced this cap to Rs 1,500 per month.
I also want to talk about pricing and deductions. We sell genuine high-quality products to our partners and pass on almost all the benefits of bulk procurement to them. In FY21 we made a loss on our product sale business and we are likely to make a small loss or net zero in this financial year as well. If we were selling the products at very high mark-ups then we should be making a profit.
We are also making this change that if any new products are launched, we will first deliver them to the partner and post their consent only do the deductions over a period of time.
We have constantly taken efforts to minimize the cost of products. When we started the cost of the product was 25-26 percent of the service; it has come down to 16-17 percent and across the platform less than 15 percent. We have a path to bring it down to 12-13 percent with value engineering, with buying from good new brands whose brand mark-ups will not be very high, and with private labels.
We have also introduced a cancellation fee to deter customers from making last-minute cancellations. We have now decided that the entire amount that we collect from customers would be passed on to the partners.
How will you sensitize customers?
We will now sensitize customers to provide drinking water as well as the use of bathroom facilities. In case customers have been lowly rated by partners, we will not reassign that customer to the partner. We will also take strict action against customers who mistreat partners by blocking them.
The protesting workers have been demanding minimum guarantee. Can you offer that?
We are a marketplace. That's what we stand for. Partners can work flexibly. There are lots of jobs on the platform. You can see if you do 30 jobs in a month averaging 1.5-2 hours, there is no dearth of earning for anybody who wants to earn. For those doing 30 jobs or more the average is already—net of all costs—Rs 28000. If you are in the top 25 percent of partners who are doing on an average about 45-50 jobs, that's Rs 35,000.
We don't have an employer-employee relationship with them. We are very clear about that. The government has come out with a clear social security code for the workers. We are committed to following that.
What is the average overall time a partner should invest to get into this bracket?
To earn Rs 27,500, the average time spent through the month is 102 hours including travel, which is 3.5 hours a day.
Does the rating of a worker reduce if she takes fewer jobs?
There is no correlation. We show partners how much the acceptance rate is but there is no correlation with the rating. The ratings are only driven by customers. We have partners who have done 5-10 jobs per month and are rated 4.7-4.9.
Did you speak to the protestors?
We have been talking to all partners including those who were protesting over the last few months. We have discussed this with several of them. We obviously cannot satisfy everybody all the time. Our conscience is clear. We have put our best foot forward and done it for everybody, not for a limited set of people.