Publish Date: January 8, 2024

A Study by IIT Delhi Researchers Proposes Solutions for Fair Compensation to Food Delivery Agents in India

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New Delhi: Fairwork Project is a global initiative that seeks to improve the working conditions of digital platform workers, including food delivery riders. The project assesses and ranks platform companies based on their adherence to fair labor practices to promote better standards in the gig economy.

Fairwork India’s 2023 report has shed light on a critical issue in the food delivery industry in India, where none of the major food delivery platforms were found to provide hourly local minimum wages to their delivery workers after accounting for fuel and other expenses.

The gig economy model has been a driving force in the food delivery industry, making it difficult for the delivery workers to secure their rightful earnings. Additionally, food delivery platforms have faced challenges in increasing order delivery fees beyond a certain point, creating a complex dilemma for all stakeholders involved.

However, IIT Delhi's research team comprising Prof. Abhijnan Chakraborty, Prof. Sayan Ranu, Prof. Amitabha Bagchi and PhD scholar Ms. Anjali have developed a unique approach, which they name ‘Work4Food’, that not only guarantees government-mandated minimum wage compensations for delivery workers but also seeks to minimize platform costs while ensuring customer satisfaction. Their proposal was also presented at the prestigious International Joint Conference on Artificial Intelligence.

Key features of the proposed formulation include:
 Income Guarantees: The scheme ensures that all delivery agents receive income guarantees based on government-mandated minimum wage rates, allowing them to earn a fair and consistent income.
•    Platform Control: The formulation provides platforms with the necessary flexibility to determine the number of delivery workers onboarded, ensuring that income guarantees are met while addressing operational constraints.
•    Personalized Guarantees: The scheme takes into account worker-specific factors and performance metrics, beside demand-supply dynamic in particular localities, to provide personalized guarantees tailored to each delivery worker.

 “In our work, we developed an order assignment algorithm (which determines which delivery person gets which order) to ensure that each delivery person earns more than the minimum wage. To achieve this without increasing the cost for the platform or the consumer, we recommend utilizing the delivery workers more efficiently and reducing the habit of over-provisioning. In other words, since the platforms gather a lot of data, by looking at historical patterns, they can predict the supply-demand dynamics in a particular location at a particular time and accordingly onboard delivery workers if there is a need”, said Prof. Abhijnan Chakraborty, Computer Science and Engineering Department, IIT Delhi.

Work4Food's minimum income guarantee, coupled with the flexibility it offers to platforms in onboarding delivery agents based on demand-supply dynamics, minimizes unnecessary travel – a common practice among the delivery agents to strategically position themselves for the next order.

“This can have a long-term effect on reducing air pollution caused by vehicular emissions, at least until the entire delivery fleet transitions to battery-operated vehicles”, Prof. Abhijnan Chakraborty added.

While online food delivery companies often cite the gig nature of the work and operational constraints as barriers to implementing local minimum wage guarantees, the novel solution introduced by the IIT Delhi researchers promises to address the issues.

“We believe that our proposed solution has the potential to revolutionize the way food delivery platforms operate in India, creating a win-win situation for all parties involved -- delivery workers, platforms, and customers -- representing a significant step toward achieving fairness and equity within the food delivery industry”, said Prof. Amitabha Bagchi, Computer Science and Engineering Department, IIT Delhi.