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Blinkit delivery workers go on strike in Delhi-NCR; few dark stores close

Zomato's grocery delivery arm is facing a blow from its delivery partners as they demand Blinkit reinstate commissions. A few dark stores in Delhi, Gurugram, and Noida have reportedly been shut down permanently.

Blinkit delivery workers go on strike in Delhi-NCR; few dark stores close

Monday April 17, 2023 , 3 min Read

Blinkit, Zomato's e-grocery division, is facing backlash from its delivery partners in Delhi, Gurugram, and Noida, who have been on strike for the third day after the company changed its payout system.

Last week, Blinkit revised its commission system from Rs 25 per delivery (plus Rs 7 during peak hours) to a Rs 15 per delivery minimum fee, along with a distance-based component. More than 2,500 delivery executives now demand the old payout system be reinstated.

The protesting workers met Gurugram Deputy Labour Commissioner Dinesh Kumar and submitted their demands, according to an Inc42 report. Representatives of Blinkit were also present at the meeting.

The workers presented a list of five demands—the company must increase the minimum pay to Rs 25; it must reverse any decrease in payscale; it should not terminate access for a rider even if they are unable to log in for 20 days and will inform the rider before doing so; it must revert to giving payment from cash on delivery orders to the store manager so that the drivers can work easily; and the company should arrange for water and toilets for the drivers.

The Gurugram-based firm has also fired several protesting workers and suspended the IDs of some, according to the report.

The strike resulted in the temporary shutdown of several dark stores in the national capital region (NCR). Some stores were closed permanently due to workforce shortage, as per media reports.

However, a Blinkit spokesperson said that almost all stores across NCR are now operational, adding, "We continue to engage with all delivery partners to help them understand the new payout structure."

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According to an April 17 research note by ICICI Securities, Blinkit lost nearly 1% of its revenue in the last four days when 25% of its dark stores were not operational. The quick-commerce firm roughly had about 370 dark stores across India in Q3 FY23.

Although the tweak in delivery fee structure indicates Zomato's move towards cost control, a combination of clear communication to delivery executives on the expected change in earnings is crucial, the note said.

"We believe strikes/agitations are unavoidable in the sector, given the large exposure to an urban blue-collared workforce. However, given that the strike (at Blinkit) is happening in the national capital and has already garnered political attention, we think, the company should try to resolve the issue at the earliest," the note stated.

A report by Motilal Oswal, dated April 16, called Zomato's acquisition of Blinkit an incremental risk to Zomato, given that quick commerce is nascent in India and is highly competitive. Moreover, it is difficult to rationalise delivery fleets due to time constraints in quick commerce.

"The incremental cash burn coming from Blinkit is not well received by investors," Motilal Oswal's note added.

Edited by Kanishk Singh