UC's 12-Point Program to improve partner earnings and livelihood

Urban Company announces 12 point program to improve partner earnings and livelihood

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.

UC's 12-Point Program to improve partner earnings and 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.

Illustration: Commission structure for Salon at Home for women category
Illustration: Commission structure for Salon at Home for women category

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:

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 cities, All categories
UC India – All cities, All categories

 

UC India — Tier 1 cities, All categories
UC India — Tier 1 cities, All categories

 

UC India — Tier II cities, All categories

 

2. UC India : Salon and Spa categories

UC India — All cities, Salon & Spa category
UC India — All cities, Salon & Spa category

 

UC India — Tier 1 cities, Salon & Spa category
UC India — Tier 1 cities, Salon & Spa category

 

UC India — Tier II cities, Salon & Spa category
UC India — Tier II cities, Salon & Spa category

 

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.

Utilization trend - Homes & Beauty

 

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:

Income protection and health insurance specific to COVID-19

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