The week-long disruption to Blinkit’s operations in the Delhi NCR region due to delivery partners protest over a new pay structure have caused no material impact on the financial performance, with a hit of less than one percent in revenue, the quick commerce company’s parent Zomato said in a stock exchange filing on Wednesday.
The ‘Blinkit Strike’, as the protests have come to be known, had led to the temporary shuttering of nearly half of the 200 dark stores that Blinkit operates in the national capital region. Brokerages such as ICICI Securities had earlier said, “Given that at least 3-4 days’ sales have already been lost, this implies ~1 percent loss in revenue from Blinkit and ~0.15 percent of consolidated revenue for Q1FY24—already.”
For Q3FY23, the food delivery giant had reported a 75.2 percent jump in total revenue at Rs 1,948.2 crore over the corresponding period of the preceding fiscal. The adjusted EBITDA stood at a negative Rs 265 crore, but the company pointed out that excluding Blinkit, the operating loss looked better at Rs 38 crore.
The protests, which began on April 12, eased up on Tuesday with the Blinkit app back online. “We had to shut down some stores for a few days to ensure safety of our employees at stores and the delivery partners. Most of these stores have now resumed operations,” said Zomato, which acquired Blinkit last year in a deal valued Rs 4,447 crore.
After taking a week-long hit in earnings due to protests, Blinkit’s delivery partners have returned to work as the company refused to roll back the new payout structure released last Monday, which fixed the minimum fee at Rs 15 per delivery from Rs 25 earlier. It signaled a shift from a fixed-pay model to a hybrid one with a distance-based component. The delivery partners have claimed that the revised pay scale would cut their monthly earnings in half to about Rs 8,000 to Rs 10,000.
“Over the last few days we have made changes in the delivery partner payout structure with respect to the Blinkit business to address the needs of delivery partners, improve customer experience and reduce cancellation/ order rejection frauds by few delivery partners in the system. Such changes are done from time to time, as needed,” said Zomato in its first reaction to the protests at its quick commerce subsidiary.
On Monday evening, a Blinkit spokesperson told CNBC-TV18 that it is ‘engaging with all delivery partners to help them understand the new payout structure and said, “almost all our stores are operational now across NCR.” The company has maintained that the new rate card is fair.
However, the ‘Blinkit Strike’, the workers’ unions say, is cooling off after screenshots of messages sent by the company to the protesting delivery partners surfaced on Monday. Blinkit appeared to warn the workers that it will shut several dark stores permanently and revoke their access to the app, as all attempts at reconciliation had failed.
“Most of the delivery partners have returned to work because of fear,” said Harish Gautam of the App Workers’ Union (AWU), which has been coordinating the protests across the Delhi NCR region.
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“The company is giving veiled threats to the workers by saying that the new pay structure is an opt-in exercise. This only implies that the company would excise any worker who would not opt for the new pay structure. Moreover, the company has also resorted to blocking the IDs of various striking workers which amounts to effectively firing them,” he explained.
“It should be noted that despite the intimidation by the company, the workers are still on strike across several Blinkit dark stores in Delhi NCR,” he added.
Representatives at workers’ unions pointed out that only a handful are on strike, while many have left the jobs altogether, finding the pay too low to sustain their livelihoods. “Many have either joined other e-commerce companies or returned to their villages,” said Gautam.
The delivery partners still-on-protest under the App Workers’ Union (AWU) are planning to approach the Union Labour Ministry, demanding that “the arbitrary imposition of the new pay structure be rescinded”.