Eternal, the parent company of food delivery platform Zomato, has introduced a new fee for restaurant partners on long-distance orders, as it looks to improve profitability as well as pay more to the delivery partners.
According to an email sent by the company to restaurant partners, it will charge a long-distance fee on orders which are to be delivered beyond 4 kms.
If the order size is more than Rs 150 and the delivery location is between 4-6 kms of the restaurant, Zomato will collect Rs 20 per order.
If the delivery location is more than 6 kms away, the restaurants will have to pay Rs 40 per order for the same order value.
For smaller orders, no additional fee would be charged if the food is delivered within 6 kms. However, beyond that, Zomato will collect Rs 40 per order.
The move comes at a time when Rapido is preparing to enter the food delivery space and has reportedly told the restaurants that it would charge half the commission charged by Zomato and Swiggy.
Eternal’s new fee would only be payable by the restaurants and not the customers. Moreover, the fee cannot be more than 30% of the order value.
For customers, the company continues to levy a Rs 10 platform fee, in addition to packaging fees and, in some cases, long-distance fees.
“Apart from profitability, this fees would improve the per order money paid to delivery partners. This strategy could help them onboard more partners and reduce delivery time,” a person aware of the development said.
In the post-results analyst call for the January-March quarter, Zomato had highlighted that it is facing a crunch of delivery workers due to rising competition from quick commerce.
Eternal is also preparing to introduce a new visibility assurance plan for brands, where they can pay around Rs 6,000 in return for better rider availability for their business.
These developments come at a time when the growth in the food delivery business has reached a plateau for both Swiggy and Zomato. While the business continues to be the cash cow for both companies, it has been reporting a sub-20% growth for the last few quarters amid urban slowdown and consumer shift towards faster alternatives.
Zomato did not respond to FE’s queries till press time.