Food delivery startup Swiggy has rubbished all allegations regarding financial misappropriation and faking of numbers in the company, leveled by 4 former employees, in a point-wise rebuttal to the anonymous blogpost that surfaced on Wednesday on Tumblr.
To drive home its commitment to its restaurant partners, company CEO Sriharsha Majety informed that the company is now helping its restaurant partners to setup kitchens in various locations to address the “geographic cuisine gap.”
The first such kitchen will house 3 restaurant brands, and will come up in Marathahalli, Majety said.
“Solving for assortment in hyperlocal commerce is a very tough problem and Swiggy will be driving innovation here for benefit of both restaurants as well as customers,” he added.
The startup defended its move to bump up its own food offering Bowl Company over its restaurant partners saying that the “intention is to boost the number of times a consumer can use Swiggy over the long term.”
“If we introduce brands that don’t boost repeats but just order numbers, we don’t believe there’s a case for that brand to exist and come back to the drawing board. We don’t embark on any of these initiatives with a cannibalization approach,” Majety added.
Swiggy’s biggest rival Deepinder Goyal, founder of Zomato, has come out in support of Swiggy.
“We compete with Swiggy rigorously, and we have never had a competitor we have respected so much and every organization has problems it needs to address, and a committed team always overcomes them,” Goyal said in a tweet.
But the former employees have accused the startup of much graver misappropriations.
The employees said in the blogpost that Swiggy management has been tampering with sales volume figures to manipulate the media, stakeholders, restaurant owners, and investors.
The post leveled the charges based on internal documents. Swiggy in its response has raised a question about the credibility of those documents.
“The excel sheet screenshot is a complete fabrication as is a lot more in the post,” Swiggy said in its response.
Sriharsha Majety, CEO of Swiggy also pointed out mismatch in the figures shown in the excel sheet screenshot and the investor deck uploaded by the former employees.
“The November 2016 orders as per the investor deck is at 63,804 per day, but the excel sheet cited by the employees says 78,010 per day. If the 78,010 orders per day in excel sheet was right, why would the investor deck report lower numbers?”
As far as the comparison of December 2016 and January 2017 order numbers is concerned, Swiggy defended its stand with “actual numbers” that peg order volume per day in December 2016 at 72,112, and January 2017 volumes at 78,417.
The employees, on the other hand, have alleged that the order volume in January 2017 was 78,767, lower than 82,799 in the previous month.
They have accused the management of hiding this dip in the investor presentation for their last fund raising activity in March.
“The actual numbers have been verified by external, neutral auditors (a part of the big four) as a part of our standard due diligence that is done before every fund raise,” Majety clarified.
The employees had also questioned Swiggy’s claim of reaching 4 million orders per month.
They alleged that the company had revoked access to the order volume tracking dashboards for everyone, just a few days before Swiggy was chosen as the Startup of the year by a leading publication.
The order per month stood at around 3 million before the outage, while it jumped to 4 million when the access was restored, employees claim.
Majety in his defense said that the company had reached the 3 million mark a few months ago. The rebuttal supported the argument with the daily order average in the last week of July.
However, the company did not share actual timeline when it had crossed the 3 million or the 4 million mark.
The anonymous blogpost also claimed that the Swiggy management unethically, taxing the small restaurant owners, “who could be paying more than their share.” According to the post, Swiggy increased its commission share from 5%, to 10%, and now nearly at 25%. “The management wants us to take this to an average of 30% by 2022.”
Majety defended Swiggy’s right to command high commission, based on the value they create for the restaurants. “The reason we started low is because we wanted to first convince the restaurant partners about the amount of value we bring to the table before requesting for higher numbers,” he said.
Delivering of higher value led to higher commissions, he added. He also clarified that the 30% commission target is actually a 3-fold proposition. “The commission we get from the restaurants, delivery fee charged from the consumers, and discretionary advertising revenues.”
Swiggy reviews all commercial agreements every six months when the commissions are also revised. “If there’s a commission number that both parties mutually agree on, only then we sign an agreement. There is absolutely no violation of contractual obligations,” Majety added.
Majety also countered claims of toxic work environment saying that Swiggy concerns a great deal with “employee feedback.” “We conduct pulse surveys, managerial effectiveness surveys and open houses to encourage feedback and act on it, across all functions of the organization.”
The startup went on to clarify that Swiggy periodically takes up training and development programs for its delivery executives, while performance is rewarded through rewards and recognition.
“Every Swiggy Delivery Executive undergoes background verification before they are on-boarded. All delivery executives are provided with medical insurance for the family and a personal accident insurance, which is borne by the company,” he added.