In its IPO paperwork, India’s homegrown unicorn Zomato characterizes the pandemic as a shot in the arm for the food delivery industry. As the platform’s average order value increased to over $5.50 per order in the last year, the company reported profits per delivery for the first time in its decade-long operations. In a performance report in July 2020, Zomato repeatedly emphasized that Covid-19 had “positively impacted the health of our business” and “accelerated our journey to profitability.” 

But for Zomato’s drivers, who are crucial to its business model, pandemic lockdowns have been a disaster. As cities across India went into extended lockdowns this month, a Bangalore-based Zomato delivery driver saw his daily orders slashed 50% overnight. 

The driver, who spoke anonymously for fear of retribution from his employer, said the drop in orders followed an influx of new drivers in Bangalore, and the squeeze is hitting his paycheck. “I am not able to manage expenses, or to send money home to my mother and sister,” said the 21-year-old driver, who migrated to the city looking for work. Contending with the added stress of Covid-19 on his 12-hour work shifts, which usually take him to the city’s upscale neighborhoods, has worn on him. “I am so scared about the virus,” he told Rest of World

The driver is one of more than 160,000 gig workers employed by Zomato, a major player in India’s booming food delivery market. Last week, the Indian company filed precursor documents to an initial public offering (IPO) on the National Stock Exchange of India. Although the listing is one of the country’s most anticipated IPOs, Zomato continues to operate at a loss, and three drivers who spoke to Rest of World say the platform has provided little support for workers who have seen their earnings dwindle during the pandemic. Zomato, and delivery platforms like it, rely on the labor of independent contractors who largely lack benefits in order to sustain its business. But as India struggles through its worst public health crisis, the precariousness of the company’s gig workers could be a red flag to Zomato’s potential investors. 

The company’s IPO paperwork is filled with hedging statements, like “We have a history of net losses and we anticipate increased expenses in the future,” and shows that the company is still operating at an overall loss. Though the delivery platform reported a 96% growth in revenue for fiscal year 2020, outlays on expenses like marketing and tech during the same period were still nearly double the company’s revenue. From March through December of 2020, Zomato lost $92.7 million. Some investors told India’s Economic Times the listing might be a leap of faith. 

Although Zomato’s average order value grew 42% in the last nine months of 2020, the company’s profits haven’t changed the meager earnings of delivery workers, who are paid based on distance and number of orders delivered. Analysts say that, as Zomato spends more to reach customers and the number of orders plateaus, the company has limited options to grow its revenues. “They’re investing a lot on discounting,” said Satish Meena, a former analyst at Forrester. “The only place they have [to save] is the delivery boys, by cutting their incentives.” Drivers earn less per order compared to 2019 rates, when the app-based market was flush with funds. One driver who has been with the app for three years told Rest of World that he earns just 30 rupees (41 cents) per delivery, where he used to earn 40 (54 cents) before the pandemic began last year.

The drivers’ complaints come after Zomato was ranked as having the worst working conditions among platforms offering “digitally-mediated work” in 2020 by research group Fairwork India.

On top of diminishing earnings, drivers have been grappling with dramatic spikes in fuel prices and difficulty sourcing protective equipment, as Covid-19 resources shrink across the country. Last year, Zomato pledged to supply delivery workers with PPE. But drivers told Rest of World the effort had a minimal impact. The migrant driver in Bangalore has to supply his own masks and sanitizer, costs that cut into his paycheck. “Someone from Zomato did reach out to pay for my vaccine recently,” said the driver in Bangalore, but due to the shortage of vaccines in India, he hasn’t been able to book an appointment. 

In an emailed statement to Rest of World, a Zomato spokesperson denied pay cuts, stating the company has “only adapted it to observe lockdown restrictions in different states.” The spokesperson said the company offers “additional long distance pay” and a “component for fuel price linked to incentive” to account for increased fuel prices. The spokesperson added that Zomato’s fleet is medically insured and has loss pay benefits if they test positive for coronavirus. Zomato did not answer questions about PPE supplies for its delivery drivers.

The drivers’ complaints come after Zomato was ranked as having the worst working conditions among platforms offering “digitally-mediated work” in 2020, by research group Fairwork India. After the report, Zomato CEO Deepinder Goyal promised change. “All of us here at Zomato take full responsibility for our abysmal score in this area,” he said in a tweet, “and we will leave no stone unturned to perform better in these rankings next year.” 

Zomato’s food delivery model and its operational losses are in line with trends for food delivery companies the world over. Ahead of Deliveroo’s highly anticipated U.K. listing, which some analysts labeled as the “worst IPO” in London’s history, major investors said they would pass on the stock over concerns about the sustainability of the company’s business model. One investor who passed told Rest of World that they specifically viewed Deliveroo’s reliance on gig work as a risk. In China, drivers have been facing mounting competition from unemployed workers flooding the gig market during the pandemic, on top of wage cuts as a result of increased competition between delivery giants like Meituan and Ele.me. 

But, while the gig work model has come under scrutiny in places like the U.K. and across Europe, the Indian government has been more accommodating, says Rameesh Kailasam, chief executive of a startup lobbying group called IndiaTech.org. An estimated 8 million people in India are employed through the gig economy, and, although the government has proposed a social security for workers that would mandate platform contributions, a major shift in the gig model could risk a growing sector of the country’s economy.

“The company is running because of the rider, no one can deny that,” one Zomato delivery driver outside New Delhi told Rest of World. “They reduce our pay, but we adjust because we don’t have any other platform.”