IPO-Bound Zepto Hit with Labour Complaint in Delhi Over Worker Exploitation Claims

Alleging exploitative tactics under Zepto's Rural Mobilisation Programme (RMP), the Rajdhani App Workers' Union (RAWU) has filed a complaint against Zepto and its third-party vendor, Kilton Geo Engineering Pvt. Ltd., with the Delhi labour department.

According to the union, gig workers—whom Zepto refers to as "delivery partners" and who were primarily hired from rural states—were misinformed about their pay, housing, and working conditions.

The file was made at a time when fast commerce companies are struggling with a short-term delivery staffing scarcity because of increased demand. The issue has been forwarded to a labour inspector by the labour department. As part of the investigation process, RAWU anticipates notifying Zepto, the third-party provider, and a subset of impacted employees.

Zpeto’s Response to Such Allegations

Zepto explained that while it offers the technology and clear standards, store management is in charge of day-to-day operations and vendor control. According to a Zepto representative who spoke to a media outlet, the company does not have a concept for "temporary IDs" and does not provide riders with a joining bonus under RMP.

The spokesperson went on to say that this seems to be a local problem and does not represent the RMP's larger goals or operations. According to the corporation, an audit into the issues surrounding Kilton Geo Engineering has been started.

Involvement of Third-Party Vendors Creates Complex Situation: Experts

Experts point out that although Zepto considers third-party vendors to be partners, their participation creates a complicated scenario in which workers are neither truly platform employees nor expressly covered by labour regulations.

At the moment, vendors are not considered "aggregators" or "employers" under the law. Platforms in the gig economy frequently use outside vendors to hire workers, according to a media report. There are no formal agreements between the vendor and the employees, according to Sunand, president of the RAWU, which is connected to the Centre of Indian Trade Unions (CITU).

The Contract Labour (Regulation and Abolition) Act of 1970 forbids businesses from exporting work in order to avoid accountability and safeguards contract workers, who are frequently denied formal employment rights.

Interstate Migrant Workmen Act

When labourers are hired from one state to work in another, as is the case with many gig workers travelling to Delhi from Uttar Pradesh, Bihar, and Jharkhand, the Interstate Migrant Workmen Act is applicable, according to a media report.

According to this rule, contractors must get permits and give migrant workers benefits. Even though the platform distances itself from direct hiring, it could still be held accountable because Section 18 holds the principal employer accountable if the contractor fails to fulfil these obligations.

This development coincides with a broader delivery staff scarcity brought on by the rapid commerce industry's growing demand.

Deepinder Goyal, the founder and CEO of Eternal Ltd., wrote a letter to shareholders after the Q4FY25 results, stating that the growth of food delivery had slowed down for three main reasons.

One of these was the temporary lack of delivery partners, which was caused by the high demand for delivery partners in quick commerce given the industry's recent rapid expansion.