Restaurants Requests Zomato & Swiggy To Decrease Commission Rate On Takeaway Services

Restaurants plead the food-service directory to lower the commission rate by 5 percent at least. Before Covid hit, both food delivery services like Swiggy and Zomato dispatched around 20 lakh orders per month. However, since August, figures state that Zomato delivered around 7 crore food orders after the lockdown. Even Swiggy reported that they delivered 4 crore orders since the lockdown started.

Restaurant Federation of Hotel and Restaurant Associations of India (FHRAI) on October 12^th has documented to food-service directories like Zomato and Swiggy requesting them to decrease the commission charged on restaurant takeaway services.

The letter was written to the founder of Zomato Mr.Deepinder Goyal and Swiggy Co-Founder and CEO Mr.Sriharsha Majety.

As we all know, one of the biggest revolutions happened in the food business since lockdown as people stayed home and preferred takeaways and home delivery. This step taken by these food delivery services had definitely increased the dependability of people like never before. On the other hand, restaurants are struggling to resume back on track but due to lockdown barriers, dine-in services have got affected. People are still scared to dine-out and thus the only way out is these food delivery services. So many restaurants have tied up with these food delivery services to have some business so that they can stabilize their loss a bit. Hence, restaurants now are depending more on the takeaway parcels and food-delivery services.

A call for support

FHRAI has called for support by writing to the food-service organizations. The letter mentions that “We request you to reduce the commission charged by you from restaurants for takeaway services by 5 percent with retrospective effect from May 2020 till the restaurants are allowed to run 100 percent without zero restrictions, after which you may again revert back to your individually agreed percentages. The 5 percent amount may be adjusted towards their individual forthcoming business”.

Generally, the commission charged by these food delivery agencies like Zomato and Swiggy ranges somewhere within 15-25 percent, depending on the agreement with individual restaurants.

The letter even mentioned about the country’s hospitality sector condition and how it has suffered a lot in terms of business and revenue due to the unexpected pandemic hit.“Zero business during the last seven months, negative cash flows, threats of insolvency, and millions of jobs losses have devastated the sector completely,” the letter stated.

Let’s see how this appeal by FHRAI works. The hospitality sector has devastated completely so many people have lost their jobs. Hopes are high that at least with this appeal the hospitality sector might get a chance to stabilize its loss a bit and people from this sector can again be employed. India’s economic condition is not that stable because of the pandemic scene so employment is very necessary for people for their livelihood. Gurbaxish Singh Kohli, Vice President of FHRAI says that the hospitality industry being a labor and capital-intensive industry, had faced the first consequences of the pandemic and it will be the last sector to revive again.