Urban Company exploited women in the gig economy and then abandoned them.

Urban Company exploited women in the gig economy and then abandoned them.

Urban Company: From Promises of Flexibility to Broken Dreams

Image Source: Urban Company

In 2020, Nazia was working at a data entry office in Hyderabad, but she had a dream of becoming a beautician. One day, while browsing YouTube, she stumbled upon a video about Urban Company, a platform similar to TaskRabbit in the US. Urban Company promised to connect workers with clients who needed their services, offering an opportunity for flexible work and good earnings. Intrigued, Nazia saw it as an investment worth taking.

Urban Company, launched in 2014, was revolutionary for India’s home services market. It provided customers with vetted and trained workers through an easy-to-use interface. Workers like Nazia flocked to the platform, which quickly grew to become the largest home services provider in India, valued at almost $3 billion. Encouraged, Nazia paid $300 to upgrade her account to Prime, giving her access to better-paying jobs.

Things seemed to be going great for Nazia. She received stellar ratings and reviews from customers, allowing her to support her family, buy a two-wheeler, and save money for her wedding. But the promising facade began to crumble as Urban Company’s workers faced arbitrary targets and unattainably high expectations. Nazia, along with thousands of others, found herself dumped from the platform. Urban Company, it seemed, had fallen into the cycle of sacrificing worker incentives and flexibility to increase profits.

The Downfall Begins

The trouble for Urban Company’s workers began in 2021 as the pandemic hit the home services market. The company’s rating in Fair Work’s assessment dropped, and workers protested for lower commissions and improved working conditions. Urban Company responded with a “12 point program” and reduced commissions, but it also filed lawsuits against protesting workers. The platform’s efforts to be transparent included publishing a partner earnings index. However, it wasn’t enough to prevent the downward spiral.

In 2023, Urban Company introduced a new rule mandating that workers maintain a 70% acceptance rate, a customer rating of at least 4.7 out of 5, and cancel fewer than four jobs per month. Failure to meet these targets resulted in being blocked from the app. Nazia managed to keep her ratings above 4.8 until May 2023 when they slipped to 4.69. Despite her attempts at retraining, her rating remained stagnant, and she found herself out of work and burdened with $2,500 in loans.

The Broken Promises

Nazia’s story is not unique. Many women like her experienced betrayal and heartbreak as their livelihoods were stripped away. Shabnam from Bengaluru found herself receiving jobs farther away from home, rendering them economically unviable. Seema, with five years of experience, had a miscarriage and couldn’t meet the mandated acceptance rate due to medical emergencies. Sunanda was blocked from the platform after a family death prevented her from fulfilling certain jobs. Urban Company, armed with customer ratings, became a weapon against workers.

To compensate for the downsides, Urban Company offered workers shares in the business through the Partner Stock Options Program (PSOP). However, accessing these shares became a heavily gamified process. Pratima, excited about potential shares, worked hard to secure her spot in the top 10 list of workers in her category. Yet, low ratings knocked her off the leaderboard, leaving her feeling exploited.

The Cycle of Two-Sided Marketplaces

Urban Company’s downfall is not an isolated incident. Two-sided marketplaces often offer lucrative incentives to attract workers while burning through investors’ cash. However, when the demand doesn’t become organic, companies are forced to rework their models, leading to oversupply and worker exploitation. As Urban Company’s CEO, Abhiraj Bahl, explained in a video to workers, the company is losing both customers and money. This situation pushes the company to expect workers to be always available and neglect their family responsibilities.

The Fight for Rights and Protection

Urban Company workers are now organizing themselves and demanding better pay, working conditions, and laws governing gig work for safety and protection. They have joined thousands of Indian gig workers protesting against various platforms for similar issues. Unions and labor departments are engaging in discussions and sending notices to address these concerns.

However, the future for Urban Company workers looks uncertain. The company has tightened its policies, setting stricter performance metrics and extending the contest for shares. Workers are facing a reality of platform work that lacks the promised flexibility and autonomy. The isolation among workers and the absence of relationships within the platform worsen their situation.

Urban Company’s rise and fall serve as a cautionary tale in the ever-evolving gig economy. While platforms initially provide opportunities for flexible work, the pursuit of profits often comes at the expense of workers’ well-being and dreams. It is crucial to establish laws and regulations that protect gig workers, ensuring fair pay, working conditions, and the ability to maintain a work-life balance.

Correction: An earlier version of this article incorrectly stated that Sequoia was an investor in Urban Company.

Image Source: Urban Company