Foodtech Giant Zomato Testing Lesser Charges For Late Deliveries

While foodtech giants Zomato and Swiggy have emerged as the undisputed leaders in the online delivery market in the country, both the platforms have often faced criticism about the high delivery fees charged by them.

It seems now Zomato is trying to address this issue by introducing a feature in the app for lower delivery fee in lieu of a slightly delayed delivery. As per a notification seen by Inc42, Zomato app offered a customer the option to pay INR 9 lower than the standard delivery charge for a 15-minutes longer wait for delivery of food.

Inc42 reached out to Zomato seeking clarification on the feature, but didn’t receive any response till the time of publishing this story. 

Zomato and Swiggy have many times received criticism on social media, with users pointing out that the platform charges more for delivery of the same food compared to its offline price. Despite this, both are among the largest ‘ecommerce food delivery companies’ in the world, as per a report published by Canadian non-profit ETC Group.

While Swiggy is the ninth largest ecommerce food delivery company, foodtech giant Zomato was placed one position lower at the tenth spot on the list.

However, the report also criticised the model of the food delivery companies. “From the beginning, the model has been, explicitly, less about food service and more about logistics, e-commerce (including customer-data collection) and attracting technology-focused venture capital investors. Competition in the new sector quickly heated up: some players were gobbled up, and those that remained raised even more investment cash – while buying and swapping stakes in competitors,” it said. 

Recently, the industry body National Restaurants Association of India (NRAI) also criticised Zomato and Swiggy over their Zomato Pay and Swiggy Diner offerings saying they could adversely affect the restaurant industry.

However, Zomato continues to go ahead with its experiments and new services. The food delivery startup is now reportedly looking to expand its Intercity Legends services, which deliver food from other cities.

Zomato narrowed its consolidated loss to INR 186 Cr in the June quarter of financial year 2022-23 (FY23) from INR 360 Cr in the corresponding quarter of last year on increasing order volumes.

Shares of Zomato ended 1.88% higher at INR 62.35 on the BSE on Friday. Earlier this week, brokerage Emkay started its coverage on the stock with a ‘buy’ rating and a target price of INR 90 for the next year.