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Urban Company tweaks algorithms, lowers partner commissions after protests
(From left) Founders Varun Khaitan, Raghav Chandra and Abhiraj Bhal

Following partner protests outside its Udyog Vihar office last week, Gurugram-based on-demand household service provider Urban Company on Friday announced changes in its algorithms, pricing and commission structure in a bid to improve partner earnings and placate its partners and gig workers.

On October 12, close to 100 professionals protested against the home service marketplace demanding better pay and safer working conditions. The partners accused Urban Company of charging commissions as high as 30%, and assigning bookings at night which jeopardises the safety of women partners. 

Further, grievances of these professional workers included being penalised for accepting fewer bookings on the platform. This included locking out partners from the platform. In addition, partners were upset about high costs for beauty products charged by Urban Company to the partners.  

As a part of the 12-point programme now, Urban Company said it will "reduce overall algorithmical blocks by 80% on the platform", which prevents partners from providing household services. It will only be putting quality blocks for partners and work towards upskilling them in case of bad customer ratings, the company said.  

Further, to improve the take-home earnings of its partners, the company will also be marginally increasing prices for high demand services on its platform, and will be capping commissions charged from partners at 25% for categories such as beauty services. Thus, overall commissions taken from partners will range from 8.5% to 25% on the platform depending on categories.

The company added that it will cap monetary penalties charged to partners for bad service or not following safety norms at Rs 1500 per month, instead of Rs 3000 earlier.  

“Following the protest, our teams spoke to almost 4000 partners collecting their feedback. Based on the discussions with partners, we have arrived at this 12-point program. Further, we have communicated this to all our partners and we will be speaking today (Thursday) regarding our new program to the beauticians who were on protest,” Abhiraj Singh Bhal, chief executive and co-founder of Urban Company, told Mint.

“I agree that we could have done this earlier, and the protests did allow us to take a deeper look. Our conscience is clear and we want to make our partners happy, who are at the core of Urban Company. We may not be able to make all our partners happy all the time, but our heart is in the right place,” added Bhal.  

For beauty services like facial and waxing, Urban Company provides the necessary products to its partners, for certain costs. As a point of the new program, Urban Company said it will be reducing the costs of these products charged to partners by 10% and will also transfer the entire cancellation fee charged from the customer in case of last-minute cancellations.

“The beauty industry is filled with spurious products and therefore we supply products to partners. If you look at Urban Company’s product business in its financials, we make 0% margins and in some cases losses for supplying these products to our partners,” explained Bhal to Mint. 

Commenting on allegations of forcing partners to take evening jobs, Bhal said it is the decision of the partners. “We do not force our partners to take jobs on the platform during evenings, but allow them to make a choice. Less than 7% of bookings on our platform come post 6 PM and less than 2% after 7 PM. Further, we follow an area-wide approach where assigned partners reside in nearby areas as customers, during these bookings,” he added.  

At present, Urban Company claims to have 100 skilling centers for its partners, across India.  It has close to 35000 partners delivering almost 1.5 million services every month.  

“It is important to note that in a gig economy there is no employer and employee relation and finally it's the choice of the gig entrepreneur to take the job. There needs to be a balance, where we let economies of market demand and supply decide and be patient. It's a balancing act for tech-aggregators where they need to keep partners and customers happy. At the same time, we should also not kill the ‘golden goose’ which is today providing employment to hundreds of youth,” said Rituparna Chakraborty, co-founder and executive vice president at TeamLease Services, a staffing company. 

In the past months, several delivery workers of food aggregators Swiggy and Zomato have also protested relating to commissions and changed service algorithms by the companies.  

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