EV logistics platform Zypp zooms 5x in revenues, but rider-partners on shaky ground

With its tie-up with large companies like Zomato, Swiggy, Amazon and Uber, the company is expanding in scale, in both fleet size and geographies, but concerns arise on benefits for its gig workers

By Fazal Rahim Forbes India Staff

Published: Nov 17, 2023 10:40:26 AM IST

Updated: Nov 17, 2023 12:33:07 PM IST

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Akash Gupta, co-founder & CEO, Zypp Electric. Image: Madhu Kapparath

Zypp Electric, a logistics platform for electric vehicles (EV), is advancing with lightning speed in the last-mile delivery market.

The company, which currently has a fleet of 17,000 riders and is targeting to add over 80,000 more in the next 18 months, has recorded a five-fold rise in revenue—in FY23, Zypp earned Rs 125 crore in revenue, up from Rs 25 crore in FY21 and Rs 5 crore in the previous fiscal. Its fleet size during this period went from 300 to 3052.

The most significant source of revenue for Zypp is the food, grocery and ecommerce companies. Its all-EV fleet is emerging as the first choice for instant delivery and e-commerce companies, as they are shifting to environment-friendly methods—Zypp serves 24 companies for their end-mile deliveries, including large companies like Zomato, Swiggy, Zepto, Blinkit, Amazon, Flipkart BluDart, Rapido and Uber.

“We are a one-stop solution, which provides not just the EV but a quality and trained driver and ensures that all shipments are done on time. When companies work with us, they get a dedicated partner who is building quality supply,” says Akash Gupta, the CEO of Zypp.

Zypp is backed by prominent investors such as Gogoro, Google, Anthill, Shell and Goodyear Ventures. The company raised $25 million in a Series B funding round in February. Gupta says the company plans to raise another round in the next few months. The platform, which has two-thirds of its fleet currently operating in Delhi-NCR, is rapidly expanding to other major cities as well. It started its services in Bengaluru in May, operating with a fleet of 4,000; last month, the company began operations in Mumbai.

“The next few cities, which are in the pipeline for us, would be Hyderabad, Pune, Chennai, Jaipur and Ahmedabad. A city every quarter is what we are planning to expand. From a fleet size point of view, our plan is to expand from the current fleet size of 17,000 to about 100,000 over the next 12 to 18 months and a fleet of 200,000 over the next 24 to 36 months,” says Akash Gupta, CEO and co-founder of Zypp.

While the company is gearing up for rapid expansion, Gupta also claims the concerns of the riders remain paramount for the management. He says that apart from industry-standard salary, the company provides its riders with medical, life and vehicle insurance. Further, Zypp has a unique plan to provide financial assurance to the riders in case of any kind of emergency while delivering the shipments. “Without an investment on their side, we have been enabling 15-20 thousand people every month who can run their expenses and families because of Zypp.” He says that the company has a 20-minute grievance redressal policy and instant payments of the operational costs to smoothen the process for the riders and increase work efficiency.

But is that enough? Perhaps not, says Raktima Kalita, a researcher at Fairwork India, which recently brought out a report on labour standards and platform economy in collaboration with Oxford University, International Institute of Information Technology, Bengaluru, and the Centre for Information Technology and Public Policy. “There is a security deposit that the rider has to pay that they can get back after they submit the vehicle. However, the security deposit is often not realised because of certain repairs or damage the vehicle might have. Other than that, a rider has to pay Rs 175 per day for the vehicle rent charge. The Zypp model is such that if, on a particular day, you are able to work for a value of Rs 500, you don’t have to pay the rent, but even if you are working for Rs 499, you are liable to pay it,” says Kalita.

She also highlights the shortcomings of the grievance redressal policies, saying the main problem is that the riders have to report to multiple entities—for instance, one hub manager from the platform, and another Zypp manager. “When it comes to certain issues, they don’t know which person to go to. Any issues related to payment are not properly addressed by either the hub manager of the platform or Zypp,” adds Kalita.

Furthermore, Spandan Pratyush, the secretary of the All India Gig Workers Union in the Delhi NCR region, says, “Reaching out to customer care in 20 minutes does not amount to grievance redressal. Customer care does not have the power to resolve the issue. Ultimately, the rider cuts the calls, and customer care updates that the issue has been resolved. Is that really a redressal?”

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Zypp CEO Gupta adds that on an average, their pilots are earning Rs 15,000-Rs 16,000 a month. “There are also some people who are earning Rs 50,000 and upwards every month.” Yet, the current average pay of Zypp Electric riders falls below the minimum wage for semi-skilled workers in Delhi, which stands at Rs 19,279 per month.

Gupta says the company does not fall under the ambit of minimum wage because it is not the employer of the riders. He says they provide the riders with micro-entrepreneurship opportunities with its EVs, where they can choose to work with companies such as Swiggy, Zomato, Uber and other e-commerce companies.

But, Aditya Singh, a researcher at Fairwork India, says, “The moment a platform recognises a gig worker as an employee, they will have the legal obligation of paying a minimum wage and other stuff like social security, entitlements basic leave and maternity leaves. The fact that they don’t recognise them means they only pay them based on the number of tasks done and the number of orders delivered, not the number of hours put in, which is the way a minimum wage works.”

Adding on the riders' employment status, Pratyush says the company can remove the riders anytime from the app. It has the control to change the rider’s earnings. It has the control to increase or decrease their working hours. “If the company has this much degree of control over the riders, it simply means that riders are their employees,” he says.