Have you ever noticed that prices of food items might be higher on food delivery platforms, like Zomato and Swiggy, compared to the prices of those same dishes when you physically go to the restaurant? Some have rationalized this by theorizing that due to commissions that restaurants may have to pay to these platforms, they have to charge higher prices on those media.
That may be making restaurant owners sad. But, to some extent, these food delivery platforms may have made these restaurants more popular and accessible than before. But, could anything be done about those pesky commissions? Or is it a trade-off needed to reach a wider base?
Could a startup mired in regulatory issues in Karnataka come out and say that this doesn’t need to be a zero-sum game?
Rapido, known for being a bike-taxi aggregator, seems to be venturing into food delivery with an offering called “Ownly”.
And how is it positioning Ownly? No commissions, no hidden fees and seemingly, affordable meals for all, because according to Rapido, everyone should have the luxury of choice and the ability to order a reasonably-priced meal.
So, right now, there may be an initial pilot in Bengaluru.
Would it be too dramatic to say that food delivery is broken? Based on the popularity of food delivery platforms, maybe not. It’s said that Zomato had an order volume of around 650 million in FY2023, while Swiggy was said to deliver between 2 million and 2.5 million orders a day.
Though, it’s said that Zomato and Swiggy may be charging commissions ranging from 25% to 30%. That kind of percentage might squeeze smaller establishments out of profitability.
So, how would Ownly work? For orders below ₹100, it’s said that restaurants pay just ₹10 as a delivery fee. Above ₹100? ₹25.
And what about customers? For orders above ₹100, delivery costs would be a flat ₹25 not inclusive of GST.
Though, if Ownly were to have no commissions and have fixed delivery charges, could it sustain? Is that too idealistic?
Maybe, other food delivery entrants might have had to wave the white flag, but that’s probably because they were starting from scratch. It might be different if it’s a startup that’s said to enable around 4 million rides in 500 cities in India with about 30 million MAUs.
Plus, Rapido seems to have a fair amount of investor backing. So, they may have the capital and patience to take this somewhere, maybe.
And what’s another feather in the cap of Rapido? It may be working alongside the NRAI (National Restaurant Association of India), which is said to represent the interests of more than 500,000 restaurants, to help come up with apt commercial and logistic structures for restaurant and food delivery.
That’s not something that Zomato or Swiggy might be able to brag about. The NRAI and the 2 food delivery platforms might actually have a strained relationship, with the NRAI seeming to accuse the two FoodTech startups of breaching marketplace neutrality and creating an unfair advantage in the food delivery ecosystem.
Maybe, with Zomato and Swiggy’s “urban” and “modern” marketing efforts and how much it’s spent to create loyalty programmes and discounts to retain users and maybe, Deepinder’s brand-building through Shark Tank India, it might not be easy to siphon market share from these goliaths in India’s startup ecosystem. But, is there a chance that what Ownly is offering might somewhat resonate? Both for restaurants and customers? Would some restaurants even go so far as to delist from Zomato or Swiggy if Ownly makes them feel good?
Could Ownly do what the ONDC may not have been able to fully do to combat what’s considered the Zomato-Swiggy duopoly? Could Ownly deliver what Swiggy and Zomato may not have been able to?
