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Business trends

India's hungry delivery man triggers online uproar, then a shrug

The haves order meals via smartphone apps; the have-nots deliver the food

Video footage shows a driver for a meal delivery startup eating food he was hired to deliver. The video caused India to contemplate its rich-poor divide. (Identification details blurred)

NEW DELHI -- India's food delivery startups are wondering what to do about a prevailing poor work ethic and how to handle other labor as well as cost woes.

But really they are running up against the country's deep-seated social problems.

Just as app-based meal ordering and deliveries began to take off in India, a video scandal broke. The video shows a man hired by industry leader Zomato Media to deliver food eating some of it instead; it went viral.

The two and half minute video surfaced in December. In it, the man, sitting on a scooter by the side of a road, eats nine spoonfuls of food from one container, places the lid back on the container and puts it into the delivery box on the back of his bike. He then takes out another container and eats out of that. When he finishes, he puts both containers in a plastic bag and seals the bag with a piece of tape peeled off from a third untouched container.

The video created a social media uproar. Indians across the country were incredulous. "Is this real?" Others were inclined to believe their eyes. "No wonder why delivered amounts are less than ordered." There was also sympathy. "He was really hungry." Or, "We know how much delivery workers are being exploited."

Zomato executives talked with the driver, then fired him. After customer numbers dropped off, the startup introduced transparent, tamper-proof packaging.

Zomato also pledged to better manage its drivers and to hire a psychiatrist to regularly talk with them.

But none of these measures can dig down to the root of the problem -- the economic disparity between those who place orders and those who deliver them.

The wages of delivery personnel are trending up as Zomato and its rivals like Swiggy and Uber Eats fiercely compete for drivers.

Zomato's delivery workers earn about 1,000 rupees ($14.40) per day; each order they carry cost between 400 and 500 rupees.

The new delivery services are also presenting difficulties to the restaurants that hook up with them. When platform operators called on the eateries to cut their prices, the National Restaurant Association of India wrote to the government and asked it to regulate the app-based delivery sector to keep it from establishing price controls.

Price competition is already intense in the Indian service sector as businesses try to reach the enormous group of people at the bottom of the country's income pyramid. And many restaurateurs say they can no longer afford to cut prices.

India's app-based food delivery services could experience much more growth. They currently deliver a combined 75 million meals per month, compared with 600 million in China, according to HSBC Global Research. The research agency expects the number to top 100 million during the current fiscal year and for unit prices and delivery costs to drop.

In other words, delivery people and restaurateurs alike can expect no relief. And Zomato's psychiatrist will be overmatched by the social imbalance in the world's second most populous nation.

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