EU Says Delivery Workers Are Employees
Swiggy launches Pockethero, Shipt's holiday promos, November egrocery sales
We’re kicking off the week with some momentous news from all over the globe. In Europe, new rules could dramatically reshape the relationship between delivery workers and their employers. But before we get to that, let’s assess a new price-conscious offering from India’s Swiggy, take a look at Shipt’s holiday promo, and dive into new grocery delivery data.
Today:
Swiggy Targets Penny Pinchers with Pockethero
Shipt Makes Play for Holiday Market Share
Chart Time | November Grocery Delivery Revenue
EU Says Delivery Workers Are Employees, Now What?
3PD | Swiggy Launches Pockethero for Price Conscious Diners
Indian food delivery platform Swiggy is rolling out a new brand — Pockethero — as it makes a play for price-sensitive customers who may otherwise eschew delivery. Orders from participating restaurants will come with free delivery, and other price savings that the company claims will result in up to a 60% discount. To manage costs, deliveries are restricted to a 3 km (1.86 mi) zone, although in dense Indian cities that’s plenty far. Pockethero is now live in Delhi, Jaipur, Lucknow, and Chandigarh, and will soon launch in Bangalore, Mumbai, Pune, Chennai, Hyderabad, and Kolkata.
The Big Picture: This is an interesting price segmentation move by Swiggy, given that it just raised its platform fee by 50% for non-Pockethero deliveries; meaning most consumers will pay more, while price conscious ones will ideally direct themselves to this more limited offering. The increased platform fee of 3 rupees ($0.036) may still sound cheap to Americans, but keep in mind the average income in the country is still under $2k per capita. That said, platforms in the U.S. and Europe might still learn from this move, as their own delivery fees keep creeping up, especially in light of recent changes to pay laws. Might a service that’s similar to DashPass or Uber One, but with steeper discounts from participating retailers, bring in a new cohort of value-oriented shoppers?
MARKETING | Shipt Looks to Save The Holidays
In a bid to reclaim some market share, Target-owned Shipt is rolling out new marketing positioning during the holiday season. For those that really put off gift shopping, Shipt is offering one hour delivery, free of any holiday surcharges, as late as 4 PM on December 24th. For those that are particularly bereft of gifting ideas, the company is rolling out a new AI-powered recommendation / search tool. And for those that are really anxious, Shipt is updating its order tracking tool to provide additional insights.
The Big Picture: Shipt is also continuing to power through Season of Savings, its eight week long holiday promo offer. Beyond the usual rotating assortment of discounts, the company is offering in-store price matches for Target, Sephora, Petsmart and Walgreens. That said, a quick perusal of those brands storefronts on other 3PDs sure makes it look like one can find that same price match on Instacart and DoorDash… Shipt is also dispensing a few fun holiday facts, such as that during last year’s holiday period, batteries were the most popular gift category, and it delivered over 500k baking / treat items.
CHART TIME | Nov eGrocery Sales Hit $8.1 Billion
Brick Meets Click released its November online grocery sales report, showing strength in all categories (pickup, delivery, ship-to-home,) with overall domestic sales climbing to $8.1 billion. That’s up 8.2% from the year prior, but down slightly from October’s $8.2B haul.
POLICY | EU Says Delivery Workers Are Employees
Last week, the European Union took momentous steps towards dramatically reshaping work in the gig economy, with delivery and ridehail companies bracing for big impacts to their business models. The policy update, which at the moment is still provisional, establishes five conditions that define a relationship between a worker and an employer; if a worker meets two of those, they are considered a proper employee. Conditions include limits on pay, performance supervision, control of task distribution, control over work conditions / hours and rules around appearance / conduct. It’s estimated that 5.5 million workers will be reclassified as employees as a result of these new interpretations.
The Big Picture: While these new rules don’t reclassify all platform workers (which the EU estimates will hit 43 million by 2025,) it’s still a landmark change to how many popular apps treat and pay their workers. The commission devising the rules estimates the new rules will increase pay and other expenses by €4.5 billion ($4.9 billion) euros per year. While a similar ruling in Spain two years ago caused Deliveroo to leave the country, the application of these new laws across the entire political union, in a way that affects all participating companies, makes the impacts less disparate. While one company may lose a competitive edge by paying workers more, the industry as a whole seems to have been prepping for this broader mandate, with Delivery Hero in particular squirreling away resources in advance of this change.
A Few Good Links
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