Urban Company Revolutionizes Gig Work for Women in India

Urban Company Revolutionizes Gig Work for Women in India

Urban Company Revolutionizes Gig Work for Women in India

In 2018, Shakeela Banu, who had been working at a salon in Bengaluru for years, decided to make a big change in her life and joined Urban Company (UC), an app-based home services platform that has a workforce of over 52,000 people in cities across India, with one-third of them being women.

Initially, Banu was quite satisfied with the working conditions. She had a supportive manager and received a good amount of work as a beautician on call. Since joining UC, she estimates that she has served around 3,000 customers and even turned down numerous requests from people who wanted her services privately. She saw this as a way to remain loyal to her employers.

Unfortunately, circumstances have deteriorated since then.

Last year, the platform introduced new regulations, requiring users to maintain a rating of 4.7 or higher and accept 70 percent of job leads. Users risk being blocked if they exceed four cancellations per month.

Unfortunately, Banu was one of the UC workers whose profile was blocked due to “low” ratings.

The company’s blog states that workers implemented these measures to enhance service quality and improve the overall customer experience. Additionally, future plans include introducing even stricter rules, requiring workers to accept at least 80 percent of jobs, and allowing only three cancellations.

Workers who fail to meet requirements will receive a warning and must attend online or offline training to enhance their skills. If performance doesn’t improve, profiles will be blocked. Online retraining is provided free of charge, but if workers need to train at the UC office, they will have to pay a fee ranging from 6,000 rupees to 15,000 rupees (approximately $72 to $180).

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Urban Company employs a pay-to-work model, treating workers as “independent partners” and providing access to customers and professional training they wouldn’t otherwise have.

Before qualifying for jobs with UC, workers have to bear various costs, including training fees, onboarding fees, product fees, and a monthly subscription fee to secure a guaranteed quota of jobs, averaging around 50,000 rupees (about $600). Additionally, for each job, UC also deducts a commission fee of up to 25 percent in service charges and taxes. The company does not reimburse workers for travel expenses or vehicle rentals.

Negative feedback, restrictions

When introduced in 2014, UC drew employees with the flexible hours it provided. In Ghaziabad, Maya Pal, a former salon owner, decided to join UC for additional work in 2018.

“Previously, we used to receive 60 to 70 job opportunities every month. Now, if we’re lucky, we get job leads once every two days,” Pal mentioned. “Then they expect us to maintain our acceptance rates. But how can we secure jobs if they don’t offer us any?”

Even after being online on the app for 12 hours, workers claim that the job leads are insufficient.

“On the app, we have to keep our location services on. If we move away from our designated location, they stop sending us job leads,” Pal explained, noting that the system essentially requires her to stay at home all day.

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During the lockdown, Pal had to shut down her salon. She then encountered a couple of accidents and had to cancel UC jobs. As a result, her ID was blocked for four months. With no other source of income to support her family, Pal, a single mother of two, had to withdraw her children from school.

She mentioned that Urban Company workers only see an improvement in their ratings when they consistently receive five-star reviews on 10 jobs. However, it only takes one negative review to bring their ratings down again.

Urban Company has collaborated with the National Skill Development Corporation (NSDC) under the Ministry of Finance to offer training and digital certification to skilled professionals, enabling them to transition into microentrepreneurs. Furthermore, we caution employees not to disclose their phone numbers to clients; they must exclusively use the UC app for all orders. Any violations could result in termination or blocking.

Spandan Pratyush, the secretary of the All India Gig Workers’ Union (AIGWU)-NCR, which represents all app-based workers in India, mentioned the occurrence of seasonal blockings. He noted that there were fewer blockings during the high-demand period of Diwali, but the frequency has since increased, according to workers.

Workers believe that the recent surge in blockings since May 2023 is an attempt to extract money from new recruits while phasing out older workers. Pratyush explained that new workers may not question the new policies, rates, and conditions, unlike veteran workers who are more likely to resist changes due to their years of experience under specific conditions.

Things are not going smoothly for the new trainees. In Gurugram, on the outskirts of New Delhi, Deepali Khare interviewed with UC and became a trainee beautician in late August.

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The beautician training at Urban company costs around 45,000 rupees (about $540), which includes the training fee and money to buy products used during training sessions. Khare agreed to make payments in installments for this amount.

The company did not mention “that we need to get 45 models for 45 days of training”, Khare told The Diplomat News.

Then, suddenly, in September, Khare received a message from her trainer that she need not attend more sessions. Baffled, the company excluded her from training midway without providing any performance reviews. Despite her repeated inquiries, they cited quality issues.

Urban Company obligates trainees and workers to directly purchase products, including a mix of well-known and in-house brands for beauty, repairs, and home-cleaning services. Before each job, workers must scan the barcodes of the products and maintain a usage rate of at least 70 percent. However, the workers assert that the company sells these products to them at inflated prices.

Urban Company has also raised the prices of its products. For example, the price of disposable kits used for massage services, which include 25 packets of single-use items like bedsheets, pillow covers, towels, candles, and napkins, Surging from 1,440 rupees (approximately $17) in October to 1,800 rupees (around $22) in November. The cost of massage oils has also gone up from approximately 54 rupees to 66 rupees.

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“It’s acceptable for them to increase the prices of the products. But shouldn’t they also increase the price of the services? Only then can we cover the expenses,” expressed an anonymous worker.

According to Urban Company’s annual business summary for the financial year 2023 (FY23), their losses before taxation decreased from 5.14 billion rupees (about $62m) in FY22 to 3.08 billion rupees (about $37m) in FY23. Product sales accounted for 22.13 percent of the FY23 revenue, with the collection increasing from 910 million rupees (about $11m) or 20.77 percent in FY22 to 1.41 billion rupees (about $17m) in FY23.

Urban Company generates the remaining revenue from service sales, including the commission it charges its workers. When combined with product sales and fees, this can amount to nearly 40 percent of the total revenue.

Protests

UC workers in Bengaluru, New Delhi, Kolkata, and other cities staged protests following a series of ID blockings last year.

In August, despite the protests, AIGWU lodged a complaint with the state labour department regarding unfair labour practices, such as the permanent and arbitrary ID blocking of workers.

AIGWU also urged the department to enact legislation that clearly defines the employee-employer relationship, ensuring that Indian labor laws grant workers their rights, including collective bargaining. AIGWU argued that the level of control exerted by the company over its workers contradicts the claim of them being independent contractors.

Rajesh Joseph, a labor expert at Azim Premji University in Bengaluru, emphasized the importance of defining what constitutes ‘gig’ work. He stated, “A transparent contract should reflect the extent of dependence these companies have on their workers. When a worker must follow specific work conditions, the relationship goes beyond mere gig work.

In September, UC responded to AIGWU’s complaint, stating that UC workers operate as independent contractors, exempt from Indian labor laws, citing the absence of an employer-employee relationship.

Despite the aim of extending social security schemes to gig workers and platform workers, India has not yet implemented the 2020 Code on Social Security. Currently, only limited local initiatives are in place.

In a significant ruling in 2021, the United Kingdom’s Supreme Court declared that Uber drivers should be classified as workers rather than independent contractors. This decision grants them benefits such as minimum wage and paid leave. Experts believe that this ruling has set a crucial precedent for gig workers worldwide.

According to the government think-tank NITI Aayog, approximately 7.7 million workers were part of the gig economy in 2020-21. It is projected that this number will more than triple to 23.5 million by 2029-30.

It remains uncertain how platform work is categorized within Indian labor laws. As per the Shops and Establishments Act in most states, the term “employee” can encompass individuals compensated based on a contract, piece rate, or commission – with the employer obligated to either provide a month’s notice or offer payment for termination or dismissal.

In Gurugram, the labor department has been facilitating a conciliation process between UC and the workers associated with AIGWU since August.

Pratyush, who attended the meetings, mentioned, “The labor commissioners in Gurugram and Noida have verbally acknowledged that these workers are full-time employees.”

In a mid-October meeting, company representatives agreed to unblock workers’ IDs and refund money to trainees like Khare, who faced layoffs. However, The Diplomat News reported that she never received the reimbursement.

Pratyush informed The Diplomat News that the company representatives were absent for several consecutive meetings. During a meeting held on November 21 in Gurugram, the company stated that they had examined each case individually and were unable to unlock the IDs or refund the money. No explanation was provided by the company, according to Pratyush.

Fairwork India evaluated digital labor platforms in India based on five principles: fair pay, fair conditions, fair contracts, fair management, and fair representation, as stated in their annual report (PDF). Urban Company, which had previously achieved a score of seven out of 10 in the 2022 ratings, has now dropped to a score of five out of 10.

The Gurugram labor department transferred the case to the industrial tribunal and labor court in January as no compromise was reached during the conciliation process. While the labor department can determine the status of an employee and employer, only the courts have the authority to enforce this during the claims process.

Pratyush mentioned that the recommendations made by the conciliation officer regarding unfair labor practices, such as constantly changing employment terms, mandatory 12-hour shifts, absence of a leave policy, and lack of maternity benefits, would be beneficial.

Banu opted out of further work with Urban Company, but Pal persisted and is presently engaged with the platform. However, Pal’s recent monthly earnings have significantly decreased from 50,000 rupees to 15,000 rupees (equivalent to $603 to $181) during the initial months of 2018. After deducting product costs and commissions, Pal barely earns 6,000 rupees ($72) per month.

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