In the beginning of this year, foodtech giant Swiggy believed it had cracked the perennial problem plaguing the industry: a shortage of delivery personnel.
With most staffers being gig workers who tend to work for the highest-paying platform at any given time, the scarcity becomes more acute during peak hours (breakfast, lunch and dinner times). And the bidding wars for delivery personnel drive up costs for these platforms.
So, what was Swiggy’s solution? It gave delivery personnel the option to do bike-taxi rides during non-peak hours and incentivised them for doing more work in a day, in an attempt to retain them during peak hours.
In January, the food-delivery platform conducted a trial run in India’s southern city of Chennai to gauge delivery partners’ interest in this service and whether it led to increased earnings for them. The trial was made possible by Swiggy’s investment of Rs 950 crore ($125 million) in bike-taxi company Rapido nearly nine months ago for a 15% stake, which made Swiggy the second-largest shareholder after investment firm Westbridge Capital. This valued Rapido at $830 million, more than 3X of its previous valuation.
However, the results from the pilot run were mixed. Although there was an uptick in earnings for delivery partners, it did not meet the company’s early expectations. Integration with the platform, which was manually run, was far from seamless, and some delivery partners weren’t comfortable with the new experience, like carrying a pillion rider.
“It was not the smoothest experience compared to food or grocery delivery via Swiggy’s delivery partner app,” said an employee of the company. Yet, multiple Swiggy employees suggested that the company will take feedback into account and continue with the experiment till it succeeds.
The employee and others quoted in the story requested anonymity because they did not want to be seen commenting publicly on their employers.
This trial run is significant for Swiggy, which is gearing up gearing up Entrackr Swiggy sells Access Kitchens business to [email protected] Read more for a public offering in 2024 and is striving to be profitable before the listing. To this end, it has shuttered unprofitable units, including its meat service and the Delhi NCR branch of its cloud kitchen The Bowl Company. In January, chief executive (CEO) Sriharsha Majety announced that the company has laid off 6% of its workforce.
The company is working towards turning the food business Ebitda-positive by the end of the year ending March 2023. It also wants all dark stores dark stores The term dark store refers to a retail distribution center or outlet that caters exclusively to online shopping.
