Urban Company CEO On Worker Protests, Products Business, Profitability And More

Home services startup Urban Company is focusing on expanding across India and select foreign markets, even as it sticks to its guns on policy changes that have invited protests from workers of late.

Chief Executive Officer Abhiraj Singh Bhal spoke to reporters on Thursday at the startup's Gurugram headquarters, tackling topics such as profitability, its newly launched Native water purifiers and workers' protests.

Over the years, Urban Company has seen protests from certain sections of its partners. According to Bhal, the protests largely revolve around two policies—the ratings system and a new order scheduling system.

Bhal said the average rating for service partners on Urban Company has been 4.83 out of 5 in 2023 and so far in 2024. Depending on categories, UC has a minimum rating threshold between 4.5 and 4.7. If a partner falls below the threshold, they are re-trained and given feedback, but if ratings don't improve, they are removed and not allowed back on the platform again.

"If consistently a partner is delivering negative experiences, then we make a certain call. In these cases, sometimes there's pressure on us. Local politicians get involved to gain mileage, and there will be pressure on us to take back these workers. But that wouldn't be fair to customers and the vast majority of partners that are working hard to meet the threshold," Bhal explained.

This has been one big pushback, but Bhal said the company is always open to talking to partners one-on-one and explaining the rationale. "But we will not talk to large groups or people outside the Urban Company community. We don’t recognise them and have no relationship with them," Bhal said. India has several gig worker unions, such as the All Indian Gig Workers Union and the Gig and Platform Services Workers Union, which support partners on such issues.

The second issue is the new order scheduling system, which was adopted in 2023. Earlier, partners had to accept each order individually. That model was changed for two reasons: a meaningful percentage of orders did not get accepted by service partners, leading to rejections and no-shows; and secondly, partners had to constantly check their applications so as not to miss any orders, causing some anxiety.

Now, partners are auto-assigned orders based on their availability and get only three emergency passes each month, which allows them to cancel an order without penalty. For female partners, these restrictions don't exist, and about 40% of all partners are on the flexi-partner model.

"This model has been welcomed by a vast majority of our partners. A small percentage of partners were using our platform as a side app to get orders once in a while," Bhal said. "It's them who aren't happy and the ones who are protesting. We are not rolling this back because we believe this is the right model."

Bhal shared that the average net earnings for a partner per month currently stand at Rs 24,845, while the top 20% partners earn about Rs 42,792 monthly. It also claims that Urban Company partners earn 82% more than gig workers on food delivery platforms.

"Our biggest challenge today is finding high-quality service partners. There is no dearth of consumer demand," he said. "We grew 38% YoY this year, and we could've grown more if we had more partners."

Bhal shared that the ongoing quarter is set to be the company's first-ever profitable one.

The company is expected to post a top line of Rs 282 crore for the three-months through June.

The company is yet to file its earnings for the year-ended March with the Registrar of Companies. In FY23, the Gurugram-based company posted a revenue of Rs 636.5 crore and a loss of Rs 312.4 crore.

The company is doing about 22 lakh monthly orders, with an average order value of Rs 1,200. About 60 lakh users also performed at least one transaction on the platform in the past year.

Urban Company operates in 58 cities across India, Singapore, UAE and Saudi Arabia, with about 57,000 partners across beauty and wellness, home repairs and maintenance services.

"We're constantly expanding our city footprint. We keep adding a few cities every year. The idea is to also increase the coverage of services in each city. Over the next five years, we'll be present in at least 100 cities," Bhal said. "Tier-II India has scaled a lot in the last few years and the market opportunity has opened up."

Its second largest market, the UAE, is also at "the cusp of profitability", according to Bhal. "Saudi Arabia and Singapore are still early markets for us, and we're in investment mode there."

Bhal shared that the ongoing quarter is set to be the company's first-ever profitable one.

The company is expected to post a top line of Rs 282 crore for the three months through June.

The company has yet to file its earnings for the year-ended March with the Registrar of Companies. In FY23, the Gurugram-based company posted revenue of Rs 636.5 crore and a loss of Rs 312.4 crore.

The company is doing about 22 lakh monthly orders, with an average order value of Rs 1,200. About 60 lakh users also performed at least one transaction on the platform in the past year.

Urban Company operates in 58 cities across India, Singapore, UAE and Saudi Arabia, with about 57,000 partners across beauty and wellness, home repairs and maintenance services.

"We're constantly expanding our city footprint. We keep adding a few cities every year. The idea is to also increase the coverage of services in each city. Over the next five years, we'll be present in at least 100 cities," Bhal said. "Tier-II India has scaled a lot in the last few years and the market opportunity has opened up."

Its second-largest market, the UAE, is also on "the cusp of profitability,"  according to Bhal. "Saudi Arabia and Singapore are still early markets for us, and we're in investment mode there."