Simply put, according to a report by Rest of World, the platform ranks its gig workforce based on a dynamic rating system, where a higher ranking ensures more perks and better insurance coverage while a slip in rating can take away certain benefits.
Food-tech unicorn Swiggy, which is gearing up for an IPO later this year, provides an incentive-based structure for health insurance for its delivery agents, which works to the advantage of the company, while putting the delivery personnel at a huge disadvantage in case of any leave taken in case of family emergencies etc.
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Simply put, according to a report by Rest of World, the platform ranks its gig workforce based on a dynamic rating system, where a higher ranking ensures more perks and better insurance coverage while a slip in rating can take away certain benefits.
“Gold-rated workers receive health insurance for themselves and their families; in the silver category, the family is ineligible for insurance. Bronze-rated workers are only eligible for insurance coverage in case of accidents,” the report said.
A “perfect order” that is delivered on time and without calling the customer too much, or damaging the package gives the rider one point. Every week, delivery riders need to earn 70 points or more to maintain the coveted gold ranking. Between 50 and 70 points drops them to the silver category, and under 50 points to bronze.
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These rankings were rolled out last year, and changes every week based on the quality and quantity of work the delivery agent has put in. Higher ranking ensures perks such as the ability to book the following week’s shifts in advance and “attractive interest rates” on personal loans, the report added citing 40 Swiggy food delivery riders across Delhi, Mumbai, Bengaluru, Hyderabad, and Jaipur.
Prior to this model, Swiggy used to have fixed and uniform health cover benefits for all delivery riders, much like its rival Zomato, which offers a general medical insurance plan for all its workers and their families, while a set of benefits such as priority support are preserved for riders with higher ranks.
Zomato also has a four-tiered categorisation for its delivery workers — blue, bronze, silver, and diamond — which refreshes on a weekly basis.
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“The whole point of insurance is to reduce insecurity by giving people a safety net if something bad happens,” the report said, quoting Alex Wood, a labour researcher with the Oxford Internet Institute. “Instead, Swiggy’s system is turning something that’s meant to provide comfort into something that further incentivizes to drive productivity through gamification.”
On its path to profitability and becoming IPO-ready, Swiggy has laid off over 3,200 employees since 2020, as per data from layoffs.fyi, to cut costs, while hiking platform fee to Rs 5 within a year of introducing it at Rs 2 to increase its income from the platform. In FY23, the company’s losses expanded 15% to Rs 4,179 crore while revenue rose 45% to Rs 8,625 crore.
In a blog post that was published a day after the Rest of World report was released, Swiggy noted that all its delivery partners get insurance benefits such as accidental coverage of Rs 2 lakh, accidental death and disability cover of Rs 10 lakh, accidental OPD of Rs 10,000, loss of pay compensation up to 3 months in case of accident, and free ambulance service right from their first order.
The platform had 1.25 million registered delivery workers on our platform last year, however, out of this only about 350,000 workers are actively delivering orders.
Delivery agents with higher engagement get incrementally better insurance benefits, including Rs 1 lakh general hospitalization cover, mobile insurance cover up to Rs 5,000, hospitalization coverage for dependents up to Rs 1 lakh, and maternity cover for spouse up to Rs 40,000, it said.
