Zomato introduces long-distance fee, rider assurance plan for restaurants to boost order margins

However, if these small orders are delivered beyond 6 kilometres, Zomato will collect Rs 40 per order from the restaurant, Moneycontrol has learnt.

“Our endeavor is that each order should be profitable for you, and us,” Eternal said in its communication. No such fee was in place earlier.

Four restaurant owners that Moneycontrol spoke with said Eternal has begun making these proposals only in the past few days. The additional fee, which they said will deter them from servicing orders that come from far away, will be rolled out soon.

To be sure, the additional long distance fee will differ slightly for different restaurant partners, depending on their arrangements with Eternal/Zomato.

However, the total amount payable to Zomato, including the latest fee and other components, will be capped at 30 percent of the order value which essentially means no restaurant partner will pay more than 30 percent of the order value in commissions, as per a separate document reviewed by Moneycontrol.

Eternal did not immediately reply to Moneycontrol’s queries.

To be sure, Zomato will levy these additional charges only on its restaurant partners and not on customers, yet. Customers will continue to pay the same delivery fee as they pay currently, for all food deliveries placed on Zomato for now.

Zomato Gold, the company’s loyalty programme, users will also continue to enjoy the benefits of free delivery according to the terms and conditions present at the time of enrolment.

The company is yet to decide if it will tweak the delivery fee for users.

Zomato's key rival Swiggy allows owners to opt in and opt out of such programmes.

Zomato visibility assurance

Apart from an additional fee, Eternal is introducing additional cost layers to make its offerings stand out from rivals and upping its ante in an increasingly competitive food delivery environment, especially when new players like Rapido are firming up plans to enter the food delivery space and challenge the duopoly of Zomato and Swiggy. 

Zomato has also proposed a new visibility assurance plan for brands where brands can pay around Rs 6,000-6,500 each month, for each restaurant identification (RID), and boost rider availability for their business.

“Under this plan, I am asked to pay around Rs 6,000 for every food brand that I operate and I’ll get riders assigned on priority. That will ensure my orders are serviced faster and there is better customer stickiness,” a restaurant owner told Moneycontrol.

The increased visibility plan is still in the rollout stages and has not been proposed to all partners, it will be done in phases over the coming weeks, the owner added.

With this, Eternal is preparing to have an edge over its peers and also ensuring that riders are paid more, a move that will likely deter them from joining rivals, other upcoming companies or quick commerce firms.

Zomato is asking restaurants to pay up more at a time when food delivery growth has largely been range bound, growing 15-20 percent year-on-year (YoY), which has forced companies to implement new measures and capture more market share.