Swiggy’s health insurance withholds more from employees while providing less

The food tech unicorn Swiggy, which is preparing for an IPO later this year, offers its delivery agents an incentive-based health insurance plan. This benefits the business, but it also severely disadvantages the delivery staff in the event that they need to take time off for personal emergencies or other circumstances.

In other words, a Rest of World article states that the platform uses a dynamic rating system to rate its gig labor. A higher ranking guarantees more benefits and insurance coverage, while a lower rating may result in less advantages.

“Families in the silver group are not eligible for insurance; gold-rated workers and their families are covered by health insurance. According to the study, workers classified as bronze are only qualified for insurance coverage in the event of an accident.

The rider receives one point for a “perfect order” that is delivered on schedule, without causing damage to the product or making repeated calls to the client. Delivery riders must earn 70 points or more each week in order to stay in the coveted gold rating. They fall into the silver category with 50–70 points, and the bronze category with less than 50 points.

These rankings were introduced a year ago and are updated weekly in accordance with the amount and quality of work completed by the delivery agent. Higher ranking guarantees benefits like “attractive interest rates” on personal loans and the chance to reserve shifts for the next week in advance, according to the survey, which included 40 Swiggy food delivery riders in Delhi, Mumbai, Bengaluru, Hyderabad, and Jaipur.

Prior to this model, Zomato, Swiggy’s competitor, provided general medical insurance for all of its employees and their families, while maintaining a set of benefits like priority support for riders with higher ranks. Zomato also provided fixed and uniform health cover benefits for all delivery riders.

Zomato has implemented a weekly refresher system for its delivery staff, which consists of four tiers: blue, bronze, silver, and diamond.

According to Alex Wood, a labor researcher at the Oxford Internet Institute, “the whole point of insurance is to reduce insecurity by giving people a safety net if something bad happens,” the study said. Rather, Swiggy’s approach is gamifying something that should be comforting to make it even more of an incentive to increase productivity.

According to statistics from layoffs.fyi, Swiggy has fired over 3,200 workers since 2020 in an effort to reduce expenses. It also increased the platform charge to Rs 5 within a year of launching it at Rs 2 in order to boost its revenue from the platform. The company’s sales increased by 45% to Rs 8,625 crore in FY23, while its losses increased by 15% to Rs 4,179 crore.

A day after the release of the Rest of World report, Swiggy announced on its blog that all of its delivery partners receive insurance benefits, including free ambulance service from the moment of their first order, accidental coverage of Rs 2 lakh, accidental death and disability cover of Rs 10 lakh, accidental out-of-pocket expenses of Rs 10,000, and up to three months’ worth of pay compensation in the event of an accident.

In the previous year, 1.25 million delivery workers enrolled on the site; however, only around 350,000 of these people are actively fulfilling orders.

According to the statement, delivery agents who participate in more activities get progressively greater insurance benefits, such as general hospitalization coverage of up to Rs 1 lakh, mobile insurance coverage up to Rs 5,000, hospitalization coverage for dependents up to Rs 1 lakh, and spouse maternity cover up to Rs 40,000.