With many gig workers now earning more than the average salaried employee — without the accompanying job security and key benefits — a segment of India’s gig economy is booming, and companies built on it are now tapping the markets for funding.
Gurugram-based home services provider Urban Company is the latest to file for an initial public offering (IPO). It is set to become the third gig-based online platform after Zomato and Swiggy to list on the exchanges.
However, unlike food delivery or ride-hailing platforms, which engage a less specialised workforce, Urban Company operates as an aggregator for skilled workers — electricians, plumbers, carpenters, cleaners, and beauty professionals — who typically earn more while working fewer hours.
About 60 per cent of Urban Company’s 50,000-odd active service professionals complete at least 30 orders a month, earning an average in-hand income of Rs 34,000, as per data disclosed in its IPO filings. The top 5 per cent, though, made Rs 49,719 in net earnings during the first three quarters of FY25, according to company data.
Meanwhile, hyperlocal delivery partners make between Rs 20,000-26,000 per month, according to consultancy firm Redseer. In contrast, the average monthly salary of a formal employee in India stood at Rs 20,702 in FY24 as per official data, well behind that of gig workers.
Skilled gigs, better pay
Food delivery platforms have long faced criticism for their operating model — and last month, Union Commerce Minister Piyush Goyal joined the chorus. “What are India’s start-ups of today? We are focused on food delivery apps, turning unemployed youths into cheap labour so the rich can get their meals without moving out of their house,” he had said at a start-up event on April 3.
Urban Company offers a distinct take on the gig economy — by onboarding skilled service professionals, who undergo in-house training certified by the National Skill Development Corporation (NSDC), and providing them access to consistent demand, the online platform vastly increases their earning potential. In exchange, it charges them a 28 per cent fee.
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Compared to workers in the offline unorganised sector, who earn Rs 10,000-15,000 a month, or those in the organised sector, who make Rs 15,000-25,000 per month, Urban Company’s service professionals tend to earn significantly more.
While most service professionals (63 per cent) earned Rs 33,962 per month an average, the top 5 per cent made Rs 49,719 in net earnings during the first three quarters of FY25, according to Urban Company’s draft red herring prospectus (DRHP) filed on April 30. On average, service professionals earn a little over Rs 300 per hour — the top 5 per cent work 160 hours a month, nearly double the overall average of 87 hours, the company added.
Scope for home services market in India
As per research by Redseer for Urban Company’s draft prospectus, online services currently account for just 0.8 per cent of India’s overall home services market — including both organised and unorganised offline players. That share is projected to grow to 1.3 per cent by 2029. The online home services market is expected to nearly double from $49 billion to $97 billion during the same period. It is set to grow at a CAGR of 20–22 per cent, in parallel with the broader expansion of India’s gig economy, which currently represents less than 3 per cent of the total workforce — far below China’s 20–25 per cent. While Urban Company faces no equivalent competitor yet, that could change very quickly as the market expands.
Rs 1,900-crore IPO after positive financials
Urban Company’s IPO will comprise a fresh issue of shares worth Rs 429 crore and an offer for sale (OFS) by early investors — Accel India, Bessemer India, Elevation Capital, Tiger Global, and VY Capital — totalling Rs 1,471 crore.
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The Rs 1,900-crore IPO follows a turnaround in Urban Company’s financials, with the platform posting a positive adjusted EBITDA of Rs 9.3 crore in the first nine months of FY25, compared to a negative Rs 119 crore in FY24.
Operating in 48 Indian cities and select international markets — including Saudi Arabia, Singapore, and the UAE — Urban Company also sells water purifiers and electronic door locks under its in-house brand, ‘Native’. In FY24, it reported Rs 828 crore in operating revenue; for the first three quarters of FY25 alone, revenue has already touched Rs 846 crore.
Urban Company plan to use the IPO proceeds primarily towards strengthening its technology and cloud infrastructure.
Why new gig worker welfare laws may squeeze Urban Company’s margins
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While Urban Company offers its service professionals structured training, upskilling, and access to demand, they remain classified as ‘independent contractors’ — not employees — and therefore do not receive benefits such as insurance or provident fund contributions. In its draft prospectus, the company warned that the full rollout of the Code on Social Security, 2020, or state-level gig worker welfare laws, could dent its profitability by requiring additional social security contributions.
The code consolidates nine Central labour laws and defines gig workers as individuals earning outside the traditional employer-employee framework, though several provisions remain unnotified. Meanwhile, states like Rajasthan, Karnataka, Jharkhand, Telangana, and West Bengal have introduced or passed laws to extend social security benefits to platform-based gig workers — most of which are still pending implementation.
“Changes in labour and employment laws and regulations that widen the scope of ‘employment’ may classify service professionals on our platform as ‘employees’, which would result in additional obligations on our company, including payment of statutory dues such as provident fund and obtaining additional registrations and licenses,” Urban Company noted in its draft prospectus.