Food apps fuel India’s hungry gig economy

A surge in the popularity of food delivery apps such as Uber Eats, Swiggy and Zomato has led to questions about workers’ rights in India’s growing gig economy. (AFP)
Updated 21 February 2019
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Food apps fuel India’s hungry gig economy

  • A surge in the popularity of food-ordering apps, such as Uber Eats and Swiggy, provides a welcome source of income for many
  • The app-based food delivery industry is worth an estimated $7 billion to Asia’s third-largest economy, according to market research firm Statista

MUMBAI: Suraj Nachre works long hours and often misses meals, but he treasures his job as a driver for a food delivery startup — working in a booming industry that highlights India’s expanding apps-based gig economy.
The 26-year-old is one of hundreds of thousands of young Indians who, armed with their smartphones and motorcycles, courier dinners to offices and homes ordered at the swipe of a finger.
A surge in the popularity of food-ordering apps, such as Uber Eats and Swiggy, provides a welcome source of income for many as India’s unemployment rate sits at a reported 45-year high.
But they also shine a spotlight on the prevalence of short-term contracts in the economy, raising questions about workers’ rights and conditions and the long-term viability of the jobs.
“(These delivery workers) are treated as independent contractors, so labor laws governing employees are not applicable and they lack job security,” Gautam Ghosh, a human resources consultant, said.
“While jobs created by food delivery apps are crucial, they may not exist in 10 years, so for most youngsters they are a stopgap arrangement,” he added.
India’s army of food delivery drivers became a talking point on social media late last year when a rider for the Zomato platform was filmed sampling a customer’s order. The video, apparently shot on a mobile phone, showed the man taking bites from several food parcels before wrapping them again. It sparked anger online and he was promptly sacked.
Many Internet users rallied to his defense, however. They insisted that the two-minute clip showed he was hungry and desperate, and said Zomato had acted harshly in dismissing him.
“It is a challenging job,” said Nachre, expressing sympathy for the unnamed delivery man who was working in the southern city of Madurai before being fired.
“We work 12 hours straight in soaring heat and heavy rains. Sometimes I don’t even have time to eat,” he said.
Nachre drives for the Scootsy platform. He leaves home at 9 a.m. and does not return until after
1 a.m. Navigating Mumbai’s traffic-choked roads makes work stressful, he said.
“We’re always in a rush to deliver and customers keep calling us. We know we have to be on our toes all the time or customers might complain and we may lose our jobs,” he said.
India’s food delivery apps, backed by major international investment, are offering new avenues of employment for Indian youngsters who lack higher education but possess a driving license.
Their importance to the likes of Nachre was highlighted recently when a leaked government report said India’s unemployment rate was 6.1 percent in 2017-18, the highest since the 1970s.
“This job is lucrative,” said Nachre, who has no post-school qualifications and earns a minimum of 18,000 rupees ($253) a month.
In his previous job running errands at an office, he made only 8,000 rupees.
The app-based food delivery industry is worth an estimated $7 billion to Asia’s third-largest economy, according to market research firm Statista, and is expanding rapidly.
Swiggy announced at the end of last year that it had received $1 billion in funding from foreign backers, including South Africa’s Naspers and China’s Tencent.
That put the valuation of the five-year-old company, based in Bangalore, at more than $3 billion.
Zomato, Swiggy’s nearest challenger for market dominance, is being aggressively backed by Alibaba’s Ant Financial. The Chinese giant recently pumped in $210 million, valuing the Delhi-based startup at $2 billion.
The food delivery platforms are soaring as India’s growing middle classes take advantage of better smartphone connectivity and cheap data plans that are fueling a gig economy centered on technology.
Informal, casual labor has long been the bedrock of India’s economy, but now Indians can access a host of services on their phones, ranging from hiring a rickshaw to booking a plumber or yoga teacher.
FlexingIt, a global consulting agency, estimates the country’s gig economy has the potential to grow up to $30 billion by 2025.


SoftBank to launch Vision Fund 2 mega-venture

Updated 11 min 37 sec ago
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SoftBank to launch Vision Fund 2 mega-venture

  • Vision Fund 2 will aim to pull in existing investors such as the Public Investment Fund in Saudi Arabia and Mubadala in the UAE
  • Vision Fund 2 is expected to at least equal the original fund’s $97 billion fund, and could reach $150 billion

LONDON: The global mega-investor SoftBank Vision Fund is preparing to launch another giant investment venture.
Vision Fund 2 will aim to pull in existing investors such as the Public Investment Fund in Saudi Arabia and Mubadala in the UAE, the biggest investors in the original fund along with SoftBank, the Japanese group run by Masayoshi Son.
Sources told Arab News that Vision Fund 2 is expected to at least equal the original fund’s $97 billion fund, and could reach $150 billion — which would make it the largest private investment fund in history.
A team from SoftBank Investment Advisers led by its chief executive Rajeev Misra and Masayoshi Son have been in preliminary discussions with potential investors for several months.
They have been talking to sovereign wealth funds in the Middle East and elsewhere, as well as big global corporates, some of which were also investors in the first fund.

*** Read our full interview with CEO Rajeev Misra here: SoftBank Vision Fund stands shoulder to shoulder with Saudi Arabia — CEO Rajeev Misra ***
Investment is also expected from global banks, insurance companies and pension funds, and SoftBank is expected to put up about $40 billion.
The first phase of the launch is due to end “in the next few months,” with a final close around 12 months later.
The original fund plans to return profits to existing investors over the next few months, including big partners such as PIF, Mubadala and SoftBank. If they see healthy returns they may be more likely to invest heavily in the new fund.
The interests of Saudi Arabia and the Vision Fund align as the Kingdom diversifies away from reliance on oil, Misra told Arab News. “Our commitment is to support the creation of tens of thousands of jobs in Saudi Arabia, high-tech jobs not blue collar, over the next few years,” he said.