Checkers Sixty60’s dark underbelly

Checkers Sixty60 and its logistics partner, Pingo, are under fire for underhanded business practices and for employing mostly foreign drivers.

Checkers Sixty60 was launched in 2019 and has quickly grown to become the benchmark in South Africa’s grocery delivery market.

It is the most popular grocery app in South Africa, with millions of downloads on Android and Apple’s iOS platforms.

It has become so successful that it has raised Checkers’ ability to compete against Woolworths in the high-end food market.

Simply put, many middle-class South Africans prefer to use Checkers Sixty60 instead of driving to Woolworths or using Woolies Dash.

The backbone of Checkers Sixty60’s logistics success is a company called Pingo Delivery. Checkers-owner Shoprite owns 50% of Pingo.

Shoprite’s 2023 results revealed that Pingo made R994 million in revenue and R85 million in profit. Most of Pingo’s revenue comes from the R35 charged per Sixty60 delivery.

Pingo can cover all of its expenses and make a profit through the delivery charges it pays its thousands of drivers.

Earlier this month, Shoprite received approval from South Africa’s competition watchdog to acquire Pingo Delivery.

The Competition Commission approved the transaction without conditions, as it does not believe the acquisition will substantially lessen or prevent competition.

Shoprite CEO Pieter Engelbrecht explained they needed to own Pingo as relying on third-party operators could pose problems as Shoprite was expanding quickly.

“We need to have the entire value chain delivered at speed with continuous enhancements,” Engelbrecht told News24.

“We are growing at such a pace that it is hard to keep up with us in terms of third-party vendors that maybe do not have the same balance sheet.”

He said the acquisition made sense given the retailer’s plans to expand Sixty60’s brand and offer a similar service for spaza shop owners at its wholesale retailer, Cash & Carry.

Checkers Sixty60’s dark underbelly

With the acquisition, Shoprite is taking on many problems associated with the Sixty60 service and its drivers.

Checkers Sixty60 has been criticised in recent months for allegedly preferring to hire foreigners, avoiding paying employee benefits, and insufficiently vetting delivery drivers.

One of the main issues is that Shoprite regards its delivery drivers as “independent contractors” rather than employees.

Democratic Alliance MP and attorney Michael Bagraim explained that drivers receive no benefits and are not protected by South Africa’s labour law.

“It forces the purported employees to take as many trips as possible, putting their lives in danger,” Bagraim said.

He argued that South Africa’s courts would likely rule that the Checkers Sixty60 drivers were Shoprite employees.

This was because many worked the minimum number of hours in a month to meet that definition, and their remuneration was too low for independent contract work.

“In this particular instance, I think Shoprite would be hard-pressed to prove they are truly independent contractors,” Bagraim said.

“Unless the drivers work for a couple of companies at different times, it cannot be said that they are independent contractors.”

Most Checkers Sixty60 drivers work exclusively for Pingo, meaning they are not independent contractors.

Another concern is that Pingo, and hence Checkers Sixty60, reportedly employs mostly foreigners. Some allegedly do not have the right to work in South Africa.

Well-known X user Goolam said Sixty60 had created 9,987 jobs, around 9,900 of which were held by foreign nationals.

Motorcycle Safety Institute of South Africa founder Hein Jonker raised concerns over the driving qualifications of on-demand delivery service drivers.

He explained that many foreign nationals driving for services like Checkers Sixty60 may not have passed a motorcycle licence test or received any motorcycle training.

Their lack of training and the pressure of the need for quick deliveries put their and other road users’ lives at risk.

A recent expose by MyBroadband lifted the veil on the dark underbelly of how Checkers Sixty60 drivers are treated.

MyBroadband revealed that drivers are axed without warning, blocked from the Sixty60 app, and have their motorbikes taken from that app without warning.

One driver told MyBroadband that Pingo introduced unpredictable hiring and firing cycles and sudden dismissals.

This allegedly occurred when there was an oversupply of drivers at a certain store, and their services were no longer needed.

This means that the drivers could not earn a living. The driver told MyBroadband that mass dismissals were not uncommon.

This flies in the face of claims from Checkers and Pingo that the drivers are independent contractors.

MyBroadband asked Shoprite, RTT Logistics, and Pingo Delivery for comment on the allegations. They preferred not to provide feedback.

What it is like to be a Checkers Sixty60 driver

Daily Investor spoke to some Checkers Sixty60 drivers to learn more about their remuneration structure and the number of deliveries Pingo handles.

The drivers revealed that they make, on average, 15 deliveries a day. The maximum daily deliveries they can realistically do is between 26 and 28, but this rarely happens.

In addition, the drivers need to provide their own bikes, but they said Pingo pays for their fuel.

Pingo remunerates its drivers per delivery and makes specific adjustments depending on whether the driver makes one or two deliveries – called “batched deliveries” – at a time.

Interestingly, Pingo seems to lose money on most of its single orders since the driver’s total remuneration is more than the R35 delivery fee.

However, since the company makes a sizeable profit, we can assume that drivers deliver more batched orders than single orders.

This model has allowed Pingo to become a profitable business, which is why Checkers Sixty60 has been a runaway success.

Many of the drivers admitted to Daily Investor that they flout road rules because they are pressured to conclude deliveries within specific time frames.

The Checkers Sixty60 drivers Daily Investor spoke to showed us their remuneration breakdown, shown in the table below.

Distance band (km)	Driver order remuneration (R)	Fuel (R)	Total driver remuneration (R)
0 to 10	30	3.96	33.96
10 to 20	30	12.57	42.57
20 to 30	30	16.87	46.87
30 to 40	30	25.48	55.48