Urban Company responds to concerns, charts out 12-point change plan

Following concerns raised by some female beauty service professionals associated with the on-demand at-home services app Urban Company (UC), the startup has now floated an internal memo to introduce a 12-point change agenda including a reduction in commissions, product costs, penalties and a change to the partner rating systems, sources told CNBC-TV18.

A formal announcement to that effect is likely to be made today after a group of UC professionals meet with co-founder Abhiraj Singh Bhal.

As part of the change plan, UC will slash commissions on the highest slab of services from 30 percent to 25 percent.

"Prices will be increased in some beauty SKUs to maximize partner earnings. Partner blocks, other than rating blocks will be removed from the platform too, which will result in 80 percent of the blocks being done away with", according to the plan.

Sources also added that every partner will now be allowed 1 cancellation or no-show without penalties each month, plus up to 2 penalty-free cancellations intimated 12 hours prior to the appointment.

"I hope you will not misuse this provision", Bhal said as part of the note sent to partners.

The penalty cap, which is the maximum penalty that can be levied on any partner will be reduced to Rs 1500.

Customers will be charged a fee for last-minute cancellations, and average ratings will be calculated on 100 jobs instead of 50 jobs.

UC professionals are sent for a 5-day refresher training course if their ratings fall below a certain threshold. The duration of that training will reduce from 5 days to 3 days.

A critical point that service professionals raised was of auto-debit of credit that may have been availed by a UC professional from the platform.

The company will no longer auto-debit these credit deductions.

Moreover, UrbanCompany has said that it will set up a dedicated women's helpline for female partners and sensitize customers towards treating partners with respect and dignity.

The protesting professionals had also alleged that the company was charging high mark-ups on products. However, UC maintains that it has in fact been operating at zero profit from the sale of these products and sells them at wholesale prices, pretty much at cost price.

Urban Company will charge professionals for products only after taking their consent. The company has also slashed prices by 10-15 percent in certain high-value categories.

Also, the company will extend vaccination support and reimburse each pro's vaccination cost until December 31, 2021 and make insurance claims easier.

However, UC's partners, members of the All India Gig Workers Association told CNBC-TV18 that while the company has taken a big step forward, some other key demands are yet to be met.

For instance, UC professionals say commissions must be reduced on low-value and base category jobs. For example, the commission charged on the Classic category of beauty services is at an 8 percent rate, which the professionals demand must be reduced to 5 percent, as a large number of jobs they receive fall in this category.

Further, they've asked that they should only be rated on service delivery performance, not other personal parameters.

Earlier, a section of UC's beauty service professional protested outside the office of the unicorn in Gurugram, alleging the company charged high commissions and dealt with them in a non-transparent manner.