In our previous article, we had shared detailed data points and illustrations around partner earnings, benefits and payout processes to bring in transparency and clarity to all stakeholders. In the last few days, our team has met hundreds of partners across cities. We also wanted to use this as an opportunity to take a step back and bring positive improvement in two key areas of partner experience — partner earnings and partner livelihood.
Today, we are announcing a 12 point program, which we believe will significantly improve partner earnings and livelihood for all partners on our platform in India.
Partner earnings: There are 6 key actions which we are undertaking over the next few days to improve partner earnings.
- Removing temporary blocks on partners: Today, partners are algorithmically blocked for a wide variety of reasons from working on the platform for short intervals of time. We have made a decision to remove all such algorithmic blocks apart from quality blocks. This simple change will reduce overall blocks by 80% and ensure our partners do not lose out on available time on the platform. Simultaneously, we will increase focus on continuous training to improve their service quality.
- Service pricing changes: For better take home earnings for our partners, we are marginally increasing prices of several high demand services across categories.
- Commissions: For Beauty categories (in which almost all our women partners work), given the impact of COVID-19 and other factors, we are reducing the highest commission slab from 30% to 25%. Earlier, commissions ranged from 8.5% for small orders to 30% for high-ticket orders. Commissions will now range from 8.5% to 25%. The highest slab currently applies to high value orders and this change will now help partners earn more on these high value orders (shown below is the commission graph for one of our beauty categories — Salon at home for women). Average commissions after this change come out in the range of 20–22%.
4. Reducing monetary penalties significantly: We want to minimize penalties as much as possible and envisage a platform where no penalties are needed over time. Earlier, there was no cap on penalties charged per month per partner, which was recently changed to put a maximum cap of Rs 3,000 on monthly penalties charged per partner. We are further reducing the maximum cap on monthly penalties per partner per month to Rs 1,500.
5. Product pricing and deductions: Moving forward, for any new product launches, deductions will be made after the products are delivered to partners and post their consent. Additionally, we have reduced product prices of select high demand products by almost 10%. It is important to iterate that we sell genuine, high-quality products to our partners, and pass on almost all benefits of bulk procurement to them (In FY21, we made a small net loss on our product sales business).
6. Last-minute cancellation by customers: We have recently introduced a cancellation fee to deter customers from making last-minute cancellations. To compensate for the travel cost borne by partners whenever last-minute cancellations happen, the entire amount collected from customers for cancellations will be transferred to partners. This was so far being done for UC Plus partners, and will now be done for all partners.
Partner livelihood: We believe that our responsibility does not end at just partner earnings. Enabling our partners through skilling, providing them with a support ecosystem through vaccination support, insurance, loans etc have been core to our business philosophy and strategy. Going forward too, we will continue to evaluate areas where we can do more. Some of the actions which we are evaluating right away are on the following streams:
- Dedicated women safety & SOS helpline: Building on our efforts towards focused initiatives of our 40% female partner population base, we will carve out a dedicated SOS helpline for women partners (from our existing common SOS desk for all partners) to further enable women specific focus and immediate resolution.
- Skilling and partner rating mechanism: We will be modifying our logic of partner ratings to not just focus on very recent order feedback but also incorporate ratings from older orders. This will ensure due weightage is given to partners for their past association and performance on the platform and also reduce drastic movements in average rating because of a few bad orders. Simultaneously, we will double our efforts to ensure effective skilling and retraining is done from time to time. These investments will allow us to improve our customer experience, while simultaneously ensuring that our partners continue to learn and grow. This has been a place we have historically invested heavily, today UC has more than 200 full time trainers who are focused on training and building up the skills of our partners. We will talk more in detail on this area in the subsequent blog on our approach towards skilling and also our learnings on how to build strong quality through focused training and technology adoption.
- Dignity of work: To ensure all partners are treated fairly, we will start sensitizing our customers on the app to provide both water and usage of the bathroom for partners. Additionally, the system will ensure customers who are rated low by a partner will not be assigned back to the partner for overall improved experience on both sides. Furthermore, customers who mistreat partners will be blocked from using the Urban Company platform.
- Vaccination support: Currently 93% of the base is one dose vaccinated and > 50%+ is two doses vaccinated. The cost of these vaccinations have been borne by UC. The current reimbursement program for vaccination is further extended from Oct 15th to Dec 31st to ensure that all UC partners get both doses of vaccination.
- Insurance: We will be simplifying the claims process for life and accidental insurance available to all partners, and the health insurance available to our UC Plus partners. Furthermore, we will be setting up a dedicated helpdesk at our end to facilitate claim filing and reimbursement.
- Automatic credit recharges deduction from payout optional: To ensure partners are able to manage their money better — we are removing the automatic credit deduction and making it optional for all. This will ensure more liquidity for our partner at times when they require it.
We believe that the above 12 point program is a needle mover and will help the UC Family as a whole to take a step forward from where it is today. It will simplify our systems and processes, and make them more transparent and partner friendly. We will continue on this journey of continuous improvement and not stop at just these 12 action points.
The urgency with which we are moving is because it is the right thing to do and not under business pressure. (In the last 7 days, the Urban Company platform has done more business and delivered more orders than in any 7 day period in its history). In the subsequent weeks, we will talk more on partner ecosystem topics such as insurance and training. We are committed to working hard over the next months to actualize the above and make our times ahead significantly better for everyone in the UC Family.
UC Earnings Index
Today, we are publishing the UC Earnings Index, a simple yet powerful index which will transparently show how much Urban Company partners earn, net of commissions, fee and other associated costs. We will also show how average utilization on the platform has trended, for both beauty and home service categories. The earnings index for the JAS quarter is shown below:
- UC India: All categories
2. UC India : Salon and Spa categories
The below graph shows how our partner utilizations (Number of orders delivered per month per partner) has trended in the last two years. During the sharp drop in utilization and earnings in the two waves of the pandemic, we took several steps to stand by our partners (Highlighted in the Appendix below). Given demand will have its own charter going ahead, we want to make significant changes for our partners (agnostic of the demand curve) on the two aforementioned pillars of earnings and livelihood.
We expect our 12 point program to improve partner earnings by at least 10% over the next 3 months. To keep us honest and measure the same, we will be re-publishing this earnings index in January 2022, in collaboration with a Big 4 audit firm, for the OND quarter. We will also try to benchmark the earnings on the UC platform against offline earnings.
Appendix: Efforts taken to help partners during the COVID-19 pandemic
The last 18 months have been challenging for all of us with the country witnessing 2 deadly Covid waves. We implemented several initiatives for partner welfare:
- Relief Funds: During the first wave, we set up a relief fund with the Srinidhi Foundation to support service partners who were most impacted medically and/or financially. We had collected nearly INR 15 Million in the fund from contributions by the founders, employees, investors and other well-wishers. During the second wave, we extended our security net for partners by setting up the Mohit Agrawal COVID Relief Fund (Rs 12 million) to help our partners with medical expenses, hospitalization expenses etc.
- Monetary assistance: We also approved INR 100 Million worth of interest-free loans for all our beauty partners in locked-down regions. These interest-free loans were extended again during the second wave amounting to Rs 82.5 Million and were 100% from the company’s balance sheet and not sourced from the relief fund.
- Income protection and health insurance specific to COVID-19: In case of hospitalization due to Covid, UC would reimburse hospital bills up to Rs.50,000. Apart from this, we provided varied monetary cover as follows:
- Partner Counseling: 1) Mental health consultation for all partners during lockdown through a third-party mental wellness platform. 2) UC tied up with EkSaath Foundation to facilitate free doctor consultation for partners on COVID-19 related concerns, vaccination issues and for mental well-being.