A narrow margin

This rising cost of ordering food on delivery applications is the primary reason that budget platforms like Rapido’s Ownly and Swiggy’s Toing are seeing growing uptake among consumers.

Four months after its commercial launch in Bengaluru, Rapido is set to expand Ownly to Delhi NCR, Hyderabad, Mumbai, Kolkata, Pune and Chennai over the next quarter. For its part, Swiggy’s low-cost delivery app Toing offers a curated menu with prices starting from as low as Rs 15 with no packaging fee and no platform fee for consumers. Toing has expanded its reach to around 50 cities since its launch in 2025.

According to JP Morgan, Toing has managed to race ahead of Ownly in the early traction race, but only due to its heavy spends on performance marketing. As per Elara Capital estimates, Ownly’s average daily orders have risen from about Rs 250-300 to approximately Rs 3,000, while restaurant penetration at Bengaluru has increased from about 7-8% to 40-50%.

But here’s the catch. Experts say such heavily discounted food delivery models might not be financially sustainable for either platforms or restaurants. While they drive massive short-term consumer demand, aggressive price cuts can eat away already razor-thin margins for platforms and strain restaurant unit economics. “In the online food delivery segment price will play a differentiator but if you do not complement it with choice and experience, it will be difficult to retain users,” says Ravi Kapoor, partner, retail & consumer, PwC India. “Net net, the will be forced to rely heavily on continuous venture capital rather than organic profitability,” says an industry insider.

Agrees Deepinder Goyal, vice-chairman & non-executive director, Eternal, the parent entity for several digital platforms including restaurant aggregator and food delivery service Zomato. He has not only questioned the business model of budget platforms like Toing or Ownly but has, in fact, downplayed their impact on the segment in general and Zomato in particular.

“These platforms are offering the same restaurants, similar or longer delivery times, and lower menu prices funded by lower commissions and delivery fee — making the revenue gap even more unsustainable. There’s no new use case being unlocked here. The customer traction is purely price-driven, and price-driven traction without structural economics tends to resolve itself,” he said in the company’s Q1FY27 shareholder’s letter.

And what is Zomato’s answer?

The company is spending its energy on Bistro which Goyal says “is our answer to the question these platforms are pretending to solve”. “If you want to make food delivery work at Rs 50-150 price points, you can’t do it without supply chain innovation,” Goyal says. The company is rethinking kitchen operations from first principles — like designing custom equipment, workflows, and automation purpose-built for high-volume and limited-menu formats.

Is it simple posturing or is that skepticism valid?

Tough battle

According to Satish Meena, founder, Datum Intelligence, Toing and Ownly will get early traction as they would attract users with low prices, but they might not be able to sustain growth in the long term having slashed margins to pull in customers. Rohan Aggarwal, partner, RedSeer Strategy Consultants, is less scathing in his assessment. A price-led strategy can be scaled, he says, but it will be difficult to improve margins.

Elara Capital estimates that Ownly is currently burning Rs 150-170 on every order, which includes Rs 65-70 delivery cost, with the balance driven by discounts, waived fees, and fixed cost. “Suppose the food platform’s expansion goes as planned and suppose it is able to capture 5% of the Rs 79,000 crore online food delivery sector, it would still have to spend around Rs 1,700 crore to achieve the target,” says Karan Taurani, EVP, retail, consumer discretionary & internet, Elara Capital.

Rapido’s defence of Ownly’s low-cost model — articulated mostly by co-founder Aravind Sanka, and most recently this week regarding the app integration—rests on a few core arguments.

The central claim is that by leveraging Rapido’s existing rider network, Ownly operates with structurally lower logistics costs, making the model sustainable without passing additional costs to restaurants while also improving rider utilisation during off-peak mobility hours. In other words, the company argues it isn’t burning cash to keep prices low—it’s exploiting idle capacity in a fleet it already pays for, Sanka has said. Ownly intends to leverage Rapido’s logistics network and rider base to keep delivery costs low rather than monetise restaurants through commissions.

Sanka has described the main Rapido app primarily as a low-cost customer acquisition channel, saying the company’s daily traffic offers a cheaper way to build awareness than paid marketing, while the standalone Ownly app remains the long-term strategy. By integrating Ownly into its main app, Rapido expects to lower customer acquisition costs by cross-selling food delivery to its existing mobility use.

For its part, Bistro is focused on scaling its operations adding 10 kitchens every quarter. “We are seeing a lot of progress in throughput, and we’re getting the mix of the right assortment, menus, menu pricing and operational infrastructure and efficiency,” says Akshant Goyal, chief financial officer, Zomato. “As we iterate and make that better, we will see the business becoming more profitable and we can then be more aggressive on expansion as we build that confidence.”