Urban Company: Can it Balance Customer and Partner Benefits with Profitability?

Urban Company: Can it Balance Customer and Partner Benefits with Profitability?
Case Code: HROB232
Case Length: 10 Pages
Period: 2009-2021
Pub Date: 2022
Teaching Note: Available
Price: Rs.300
Organization: Urban Company
Industry: Business & Consumer Services
Countries: India
Themes: Employee Benefits, Compensation Policy, Employee Attitudes & Emotions,Collective Bargaining
Urban Company: Can it Balance Customer and Partner Benefits with Profitability?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case ‘Urban Company: Can it Balance Customer and Partner Benefits with Profitability?’ describes the dilemma Urban Company faced in trying to balance the needs of both its service partners and customers whom the start-up considered as equal stakeholders. The case first describes the business model, which revolved around connecting service seekers with the service providers or partners. The case touches upon how the start-up attracted service partners to join the platform through better pay, job security, and extensive training and made a similar effort through marketing and technology to create demand on the platform for services.

Despite these initiatives, about 100 women partners from the beauty services segment staged a day long protest on October 08, 2021 demanding better pay, social security benefits, a reduction in commissions taken by Urban, and safer working conditions. The case then describes in detail the various steps the company took through a 12-point program to redress the grievances of its service partners, especially women partners related to partner livelihood and improve partner earnings.. The case ends with a focus on Urban’s poor financial position whereby partner expenses accounted for a substantial portion of total spending. It recorded INR2.26 billion (US$ 30.38 million) in terms of employee benefits expenses in FY2021, a 62 percent increase, in comparison to INR1.39 billion (US$ 18.68 million) in FY2020. The 12- point program for partners would only further impact its deteriorating finances. The challenge was how can Urban manage profitability along with growth and at the same time ensure partner wellbeing.

Issues

The case is structured to achieve the following teaching objectives:

  • Examine where the balance lies between decent wages for service partners and company profitability.
  • Understand the importance of open channels of communication with service partners for service aggregators.
  • Learn how to find a fine balance between customer demand, platform experience, and partner satisfaction in on-demand services model.
  • Explore the need for aggregators to develop a fair and equitable compensation and benefits plan for service partners offering on-demand services.
  • Demonstrate how service companies can quickly respond to grievances of service partners.

Contents

Keywords

Compensation Policy; Employee Benefits; Work Environment; Employee Productivity; Perception; Job Satisfaction; Grievance Redressal; Job Satisfaction

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