Earnings Index Benchmarking Report | UC service professionals vs off-the-platform workers
In November 2021, we approached PGA Labs to conduct a study across service professionals associated with the Urban Company platform and those not associated with the platform. The study sought to understand the difference in earnings, livelihood and security net available among the two sets.
The pdf version of the report can be accessed here.
Below are the key findings of the said study followed by the full report.
Salon Professionals
- For the OND quarter, UC salon service partners had net earnings of ~INR 320 per hour which is ~4x times the net hourly income of offline beauticians.
- Net monthly earnings of UC salon service partners is reported to be ~INR 29,000 is ~60% higher than offline beauticians.
- Salon category partners at UC (~90 hours) work ~60% less in terms of monthly hours vs. the offline counterpart (~220 hours)
- ~90% UC beauticians reported an increase in their monthly earnings owing to higher earnings per job & higher number of jobs per month
- UC salon partners believe that UC has helped them in bridging the income gap between men and women to some extent. This boosts their confidence and encourages them to work more diligently.
Appliance Repair Technicians
- UC technicians (~INR 470) earned more than four times per hour income compared to offline technicians (~INR 100) (salaried employees, shop owners, or freelancers)
- Appliance repair technicians at UC (~80 hours) work ~65% less in terms of monthly hours vs. offline counterpart (~240 hours)
- More than 60% of respondents have taken a loan at least once from UC; Before UC, technicians were not able to take loans from banks / NBFCs (citing low eligibility) and had to resort to private lenders
- UC is instrumental in bringing insurance to all active service partners
The full report is as follows. The pdf version of the report can be accessed here.
Earnings Index Benchmarking report
In December 2021, PGA Labs — the business research & market intelligence unit of consulting firm Praxis Global Alliance — partnered with Urban Company, to conduct an in-depth, on-ground study of 100 UC partners and offline competitors in the salon & appliance repair businesses, for the OND quarter.
This was done in order to achieve the following objectives:
- To benchmark earnings of salon & appliance repair professionals in the offline world.
- To learn how life has changed for Urban Company partners & whether offline workers enjoy the kind of security net that UC provides to its partners.
As per the study, it was found that UC salon service partners earn hourly net average earnings of ~INR 320, which is 4 times the net hourly earnings (~INR 80) of offline beauticians (those working in a salon/parlour or providing at-home services).
UC salon service partners were found to have reportedly served 35–40 clients per month, working for ~90 hours in a month (including travel), which is ~60% less than the ~220 hours worked by offline beauticians.
Hence, the net monthly earnings for UC salon service partners were reported to be ~INR 29,000, which is ~60% higher than that of offline beauticians (~INR 18,000).
Notes: Data collected from primary conversations conducted by PGA Labs team in Delhi NCR, Bangalore, Chandigarh & Lucknow. For demographics split — please refer to Appendix. Split of 22 offline beauticians — 11 salaried employees, 7 owners and 4 freelancers.
In the case of appliance repair technicians, UC partners were found to have earned hourly net average earnings of ~INR 470, which is ~4.7 times the net hourly earnings (~INR 100) of offline technicians (those working in a shop or providing at-home services).
During the OND quarter, which is considered as off-season by technicians, UC technicians reportedly served 40–45 clients per month, working for ~80 hours in a month (including travel), which is ~65% less than the ~240 hours worked by offline technicians.
Hence, the net monthly earnings for UC technicians were reported to be ~INR 38,000, which is ~65% higher than that of offline technicians (~INR 24,000).
Notes: Data collected from primary conversations conducted by PGA Labs team in Delhi NCR, Bangalore, Chandigarh & Lucknow. For demographics split — please refer to Appendix. Split of 22 offline technicians — 7 salaried employees, 7 owners and 8 freelancers
Impact of Urban Company: Salon for women
About 90% of UC beauticians reported that they have observed an increase in their net monthly earnings owing to high earnings per job and the number of jobs that are provided by UC. The major proportion of billing is credited to the partner’s account after deducting commission & fees (~20–25%) whereas, in offline salon/parlor, beauticians generally get a fixed salary irrespective of the number of jobs done, and only a small proportion of incentive above fixed salary.
UC salon partners feel empowered as they get to act like owners of their work and get rewarded likewise, unlike offline salon beauticians where they were only entitled to fixed compensation. ~55% of UC salon partners reported growth in their earnings per job owing to high order value for all the services. Order value is pre-determined — leading to no scope for negotiations with the customer which ensures complete clarity and assurance of payments by Urban Company.
After joining UC, ~80% of respondents believe their hourly utilization has improved owing to the flexible working hours leading to a desired work-life balance. Partners also believe that their quality of job and well-being has improved due to several initiatives run by Urban Company like recognition of work (Gold / Silver partners), etc. UC salon partners believe that UC has helped them in bridging the earnings gap between men and women to some extent. This boosts their confidence and encourages them to work more diligently.
Impact of Urban Company: Appliance repair technician (RO & washing machine repair)
About 55% of UC technicians reported an increase in their net monthly earnings after joining Urban Company. But, in the OND quarter, ~40% of UC technicians reported a drop in their monthly earnings owing to the off-season and reduced margin. Margin has been reduced due to higher discounts given to customers, fixed-rate cards, and a gradual increase in commission/subscription charges for technicians.
Pre-determined order values ensure complete visibility of payments as they are credited to the partner’s account three times a week and can be always tracked from their mobile application. ~80% of UC technicians reported that they can utilize their time better when working with Urban Company as it offers the flexibility of working hours and the partners can modify their availability for services. UC technicians experienced enhanced quality of jobs owing to wide learning exposure, frequent training, and standardized code of conduct (SOPs).
Value added offerings by Urban Company
- Monetary advances facilitated by UC via NBFCs: Urban Company offers monetary advances (via NBFCs) for ~INR 10K to all the gold partners and INR 5K to all the silver partners. Service partners (if eligible) can easily apply for these monetary advances via their mobile application and repayment of the principal amount is done in the form of small amounts being deducted from the partner’s pay-outs. During COVID, Urban Company offered interest-free monetary support of INR 10,000 to all salon partners. More than 60% of UC beauticians and appliance repair technicians have taken these advances from Urban Company at least once during their tenure.
- Training: Urban Company offers free training and upskilling sessions for all the service partners. Training is provided at the time of joining, at the time of launch of new product/service/technology, or if the service partners face difficulty in maintaining a healthy rating. Both offline and online training is provided that ensures uniformity and consistency of services. Partner mobile application has a section for training named ‘Training Centre’ for smooth accessibility. Offline workers are expected to mainly learn on the job.
- Insurance: All the active partners (minimum one service required in the last 30 days to be called as an active partner) of Urban Company are covered under life and accidental insurance. The company plays an instrumental role in providing insurance facilities to partners as many of them admit that they would not be able to afford insurance if not offered by Urban Company.
- Health and safety measures: All the service partners are provided free PPE kits for each client by Urban Company delivered directly to the partner’s doorstep. Since UC service partners come in direct contact with clients when they visit their homes, they require extra precautions and care against COVID. Partners also appreciate the SOS/emergency helpline facilities and various health & safety measures taken by Urban Company.
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