Urban Company, hit by protests, promises to enhance partners’ earnings

New Delhi: India’s largest home services marketplace Urban Company has found itself in a controversy with more than a hundred women beauticians lodging protests against alleged “unfair work practices”, prompting the company to immediately promise important programmes to enhance earnings of its partners.

Several beauty partners said that they will not take orders from customers in protest against alleged high commissions collected by the company and poor safety working conditions. Dozens of beauticians also took to social media over the weekend, protesting against “unfair working conditions” including late night shifts.

Urban Company (formerly UrbanClap) in a blogpost on Sunday acknowledged that it is “not perfect” and might have made mistakes in its journey. The company said that it will be announcing important programmes to enhance earnings of partners in the coming weeks.

The controversy comes on the eve of the festive season when beauty services are in high demand.

Home-based salons is the single largest business vertical of Urban Company. The beauty and wellness segment contributed 55% of its revenues in FY20, the company had declared in its annual earnings.

In one of the videos that has gone viral, a beautician alleged that Urban Company has hiked the commissions it charges from them to over 30%, reducing their salaries significantly. One of the videos shared screen shots that said Urban Company “will take strict police action against anyone who stops other partners from going to work”.

In videos that have gone viral, one of the beauticians alleged that Urban Company has hiked the commissions it charges from them to over 30%, reducing their salaries significantly. One of the videos shared screen shots alleging that UC “will take strict police action against anyone who stops other partners from going to work”.

In response to ET’s query, Urban Company shared its blogpost that said “under no circumstances” will it shy away from doing the right thing for its stakeholders.

“In the last couple of days, there have been concerns raised by a few of our partners and other well-intentioned voices regarding the earnings and wellbeing of our service partners. We hear you, and, in the spirit of transparency, would like to highlight some important facts and data points through this blogpost,” it said.

Urban Company also called out a partner’s tweet that she made Rs 67 for four orders as “misrepresentation of facts”, adding that the screenshot shown is not that of her earnings page but a settlement ledger of the bank transfer.

“The partner accepted cash payments for two orders and online payment for the remaining two. Her net earnings after UC commissions and other fees for the four orders in question delivered between October 1–3 was Rs 1,941,” the company said. Separately, in a tweet referring to this issue, UC said, “…after removing travel and product costs, she made Rs 1,141 for the four jobs.”

In its blogpost, the company said, “We are not perfect, and acknowledge that we might have made mistakes in our journey so far. In the coming weeks, we will be announcing some important programmes which we believe will further enhance earnings and wellbeing of our partner ecosystem. We will publish an update on this blogpost at the end of October with the revised data. Our estimates suggest that in the offline world, service professionals earn on average between Rs 12,000-15,000 per month.”

Earlier on Sunday, Indian Federation of App-based Transport Workers, an organisation representing app-based transport and delivery workers, said it “stands in solidarity with the women workers of UC protesting against the exploitative practices” of the app-based service company.

“The women workers have been trying to negotiate with the UC management for the last three months, but there has been no acceptable outcome from the discussions,” IFAT posted on its handle. “The demands by the women include commission rates claimed by UC for each job to be capped at 20%, allowance of five emergency cancellations in a month for partners and no penalty levied for these cancellations, and no automated deductions from earnings for restocking of UC products and effective grievance redressal systems.”

Urban Company, in its blogpost said, its partners earn a net average earnings of Rs 280-300 per hour, net of commissions, fee and associated costs, and that the top quartile of service partners earn up to Rs 36,000 per month net of all commissions, fees, travel and product costs. It said service partners have access to life and accidental insurance cover and that during the pandemic, it had given Rs 10 crore worth of interest-free loans to beauty partners in locked-down regions.

Urban Company cofounder Abhiraj Singh Bhal tweeted late Sunday that the platform “takes pride in delivering much better than offline earnings, and other benefits like training, insurance, financing, safety, vaccinations, etc.”

In June this year, Urban Company had closed a funding round of $255 million from investors led by Prosus Ventures (formerly Naspers), more than doubling the company’s valuation to $2 billion.

Last month, a gig worker association had approached the Supreme Court seeking social security benefits from food delivery and cab aggregators Zomato, Swiggy, Ola and Uber.

The association, IFAT, filed a public interest litigation (PIL) in the apex court seeking that the workforce be included as ‘unorganised or wage workers’, alleging that denial of social security to them has led to exploitation through forced labour.