LPG price spike burns gig economy, delivery riders hit hardest
What’s the story
The recent surge in commercial liquefied petroleum gas (LPG) prices is taking a toll on delivery riders across major cities in India.
Staffing firms and job platforms have reported that the hike, triggered by the military conflict in West Asia, has led to a decline in orders and earnings for these riders.
The situation has forced restaurants to downsize their menus and reduce operating hours.
Peak shift orders drop by 10-20%
According to Suchita Dutta, Executive Director of the Indian Staffing Federation, average orders per rider have dropped by 10-20% during peak shifts in recent weeks.
She said rider utilization rates have declined modestly, while average earnings per hour remain between ₹90 and ₹110.
This has resulted in a potential 15-25% drop in weekly take-home pay for full-time riders.
New riders face challenges in activation
The impact of the LPG price hike is not uniform across all delivery riders.
Full-time riders are witnessing a reduction in shift availability and order volume, while part-timers can easily switch to other gigs.
However, newly onboarded workers are most affected as they have slower activation and fewer incentives since experienced riders get priority for available shifts.
Pressure on restaurant kitchens
The rise in LPG prices is putting pressure on restaurant kitchens, especially cloud kitchens and smaller operators that rely on delivery platforms.
Kartik Narayan, chief executive-marketplace at Apna.co, said when gas prices rise, a cloud kitchen operator has two options: either absorb the hit and destroy margins or reduce throughput.
He added that disruptions at the kitchen level directly affect order flow and rider earnings since delivery platforms are “logistics overlays on restaurant supply chains.”
Job postings in delivery segment decline
The impact of rising LPG prices is also reflected in hiring trends. Job postings by employers in the delivery segment on Apna fell by about 3% in early March compared to January-February levels.
CIEL HR’s CEO Aditya Narayan Mishra said in affected pockets, order volumes have softened, resulting in lower rider utilization, fewer peak-hour shifts, and a slight decline in orders per delivery partner.
Smaller restaurants worst affected
Sonal Arora, Country Manager at Gi Group Holding India, said smaller restaurants that depend on third-party delivery platforms are the worst affected.
She said reduced kitchen activity can lead to a reduction in orders, as many consumers may not order out if their preferred food items aren’t available on the menu.
Constrained LPG supply is also slowing kitchen throughput, leading to longer waiting times for riders and fewer deliveries per rider.
