Swiggy And Dunzo Want To Be The Everything Store Minus Risks And Responsibilities

AHMEDABAD, Gujarat—A few months ago, food delivery platform Swiggy  introduced a concierge service called Swiggy Go in Bengaluru, which will pick up and deliver mostly anything for you. Using this, you could place an order from that mom-and-pop bakery that’s not listed on Swiggy, or have a package delivered from across the city. Even stores have the option to partner with Swiggy.

Swiggy Go is a direct competitor to Dunzo , a Google -backed startup that has been offering the same service for over five years. While Dunzo operates only in a handful of Tier-1 cities, Swiggy plans to bring Swiggy Go to over 300 cities this year.

The idea is simple and fits comfortably in the busy lives of most people. Once you request a pick-up, a delivery partner reaches the location, grabs the package, which can be anything from a document to medicines from a nearby pharmacy to your laptop charger which you forgot at home, and delivers it at the destination in under an hour.

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It’s the kind of behaviour that has become increasingly mainstream in countries such as Indonesia and China, where convenience and time saved have gradually taken precedence over the actual cost—courtesy of apps such as GoJek and Grab.  

But what happens if your Dunzo or Swiggy executive can’t make the delivery? Maybe there were some insurance documents you needed to send across the city in a rush, and instead, they were lost. Or maybe you needed to send across something fragile, and it fell and was smashed to pieces.

That’s where things become complicated. It turns out that these apps don’t really have a solution or protection for such problems, leaving it to the customer to take action—which could even be as extreme as filing an FIR against the delivery person.

On a food-delivery app, when your order isn’t delivered or is damaged in transit, you can claim a full refund. Likewise, when a cab driver misbehaves or wrongly takes you through a longer route, you can get your money back. The process may be complicated but there exists some way for the customer to be compensated. But even this minimal level of responsibility is missing in services such as Dunzo or Swiggy Go, which don’t take on any liability—like other companies in the gig economy , their delivery persons are not considered employees but ‘partners’. 

This lack of safeguards—which both hurts customers and more significantly, further marginalises economically vulnerable employees—is what makes it easier for tech companies to ‘disrupt’ existing services.

Dunzo spells it out clearly in its Terms and Conditions : “You hereby agree that Dunzo shall not be liable for any conduct or misbehaviour or actions of Delivery Partner with respect to any transactions initiated on the Platform. Further, You agree that Dunzo has no control over the Items provided to You by the Merchants and therefore, Dunzo shall not incur any liability with respect to such Items.”

What happens when things go wrong?

A couple of weeks ago, when Srishti Bhardwaj, a New Delhi-based photographer, dispatched a hard drive through Dunzo to her friend, the delivery executive disappeared with the package. Hours after going back-and-forth with the customer support centre, Bhardwaj took the matter in her hands and told the delivery executive that she would file an FIR. Later that night, he dropped the hard drive on her doorstep.

Others aren’t that lucky. Bengaluru resident Gautam [last name withheld on request] ended up losing an important document and said Dunzo still hasn’t been able to trace the rider.

R. Choudhary, a bakery owner in Mumbai, often turned to Dunzo for picking up cakes from the franchise’s factory outlet. However, a month ago, she began looking for alternative methods as riders had spoiled her deliveries way too many times and Dunzo didn’t come to her rescue even once.

For Choudhary, the final nail in the coffin was during her last Dunzo order. When a delivery person learned the package contained a personalised cake, she said, he asked for an additional Rs 100 for the delivery, without giving any explanation. Other customers we spoke to also said they had faced this particular issue.

“Dunzo doesn’t have any number. When I contacted them through Twitter, they said they are just providing the service. They don’t get involved between the customer and delivery partner,” she said.

Online, Dunzo’s support channels have been flooded with complaints from angry customers. Both its, and Swiggy’s, rating on consumer review platform MouthShut are 1.7 (out of 5).

“Dunzo is an intermediary that connects users with the nearest available delivery partner to facilitate the movement of goods across a city. In situations where the partner is guilty of behavior like theft, Dunzo immediately suspends the Partner from the platform while it investigates,” a Dunzo spokesperson said over email.

Employees are the most vulnerable

To bring more riders on board quickly at the beginning, most start-ups barely have a vetting process and a frail set of guidelines. A third-party Dunzo recruiter from Chennai told HuffPost India that even though documents such as an Aadhaar card and PAN card are technically required, he didn’t insist on riders providing these if an area had heavy demand and was running low on riders.

Acting as a backbone to intermediary services such as Dunzo is Section 79 of the Information Technology Act, 2000 and the Information Technology (Intermediaries guidelines) Rules, 2011. The law allows these companies to play the middleman role and technically exempts them in an event of any dispute. It is what other companies including Uber and Ola have cited when under fire. However, none of them have been able to successfully use it as a defence for the actions of their so-called partners in court so far.

“The Intermediaries liabilities law is a poor excuse to hide behind in these cases where the third party does default on its services. The Act was instituted not to escape culpability and responsibility for chain of action but to in fact protect intermediaries from the actions of the unintended populations. Any company hiding behind the law while harming their customers and employers is eventually going to face a backlash and boycott as we have seen in many recent instances,” said Nishant Shah, Vice President Research at ArtEZ University of the Arts, the Netherlands. 

Shah, who was earlier director, research, of the Centre for Internet and Society, added that the pressures of the gig economy highlight the pitiable plight of their employees, who aren’t protected by adequate labour rights and reforms.

“Technology does not exist in a vacuum and radical reform of jobs in tech is going to work only with radical reform of the entire labour sector. That being said, the one thing that can happen, and is possible, is to hold these tech companies socially and globally accountable,” added Shah. 

As they rush to ratchet up their valuations, these startups have largely overlooked what arguably their entire business model rests on — delivery partners.

Over the years, startups and companies such as Swiggy and Amazon have spent most of their time building an extensive and reliable fleet of delivery boys. But once they built the foundation, they began to scale back on the incentives those riders were promised when they first signed up, often forcing them to adopt dire methods — like asking for an additional Rs 100 fee in the case of Choudhary, or forging bills to ask for more money at the time of delivery.

“The scale of logistics in India — not just for food delivery, but e-commerce and other industries — means that there are so many people doing deliveries that incentives and benefits are now real issues that matter to the workers, and these will continue to become bigger issues as the scale grows,” said Satish Meena, Senior Analyst, Forrester Research.

In Mumbai, a group of Dunzo riders went on strike when the startup abruptly cut their daily rewards by half. Dunzo has promised to restore the original incentives, but this is unlikely considering that it recently also reportedly had to scale back due to cost cuts. Agents of Zomato and Swiggy have suffered a similar fate in the last couple of months.

“As mentioned, we do not employ our partners, incentives allow for partners to be online during the busiest times, allowing users to get what they need within 30 minutes on average. Dunzo’s incentive structure is designed to empower partners with the maximum earning potential. To be fair, while taking feedback from the partners is crucial, one must look at overall daily earnings as a measure of a partner’s earnings and not just incentives,” a Dunzo spokesperson said over email.  

While the constant controversies have forced a handful of startups such as Swiggy to offer additional benefits including medical insurance, they still keep a safe distance by refusing to hire delivery agents as full-time employees. 

A growing opportunity

In the last few years, hyperlocal has emerged as the new battleground for startups and investors. A joint report by EY and PE/VC body IVCA shows that the sector gained the most funding in 2018 and accounted for about a quarter of all investments.

Other than Dunzo and Swiggy, there are a range of local startups delivering groceries, carrying packages for businesses, and more. But as more people grow comfortable with using them regularly, there’s an urgent need for a refreshed intermediary law similar to what the Indian Postal service adheres to — that holds these companies accountable and not leave the user stranded.

“The opportunity here is that India has a trillion monthly commerce transactions. The challenge is that 90% of those transactions are still offline. By digitising the majority of those offline transactions, we will need to enable local, offline merchants to be a part of the digital marketplace so they can withstand the pressure from e-commerce companies,” said a Dunzo spokesperson.

“With changing customer dynamics, burgeoning salaries, and the rise of the ‘urban’ population, there is a latent demand for convenience. Now that Swiggy has cemented this type of consumer experience through mass adoption, the same level of benefits will come to be expected across all aspects of hyperlocal delivery,” a Swiggy spokesperson told HuffPost India.

By choosing to offload all the risks and responsibilities on the customer, merchant, and delivery executive, startups such as Swiggy and Dunzo are overlooking the most vulnerable links of their businesses. Until they’re tackled proactively, such oversights can lead to grave consequences and end up costing startups more than just a handful of users.