New Fee Model on the Basis of Distance
Food delivery app Zomato has launched a new fee known as the "long distance service fee." This charge comes into play when customers order from restaurants that are farther than 4 kilometers away.
If the restaurant is 4 to 6 kilometers from the delivery point and the order is more than ₹150, users have to pay ₹15. For orders that are more than 6 kilometers away, the charge is between ₹25 to ₹35. The charge depends on the city and is charged irrespective of the order amount.
History of Delivery Charges
Prior to COVID-19, Zomato did not add any extra charges for 4 to 5 kilometer deliveries. During the pandemic, the platform extended its delivery radius up to 15 kilometers since many restaurants were closed. Subsequently, Zomato narrowed down this range and implemented delivery charges.
The firm has shifted to a model that ties delivery charges to distance. Zomato has also requested restaurants to ensure that the total distance and service charge is not more than 30% of the order cost.
Company Strategy to Counter Losses
Zomato is also investing in Blinkit, its quick commerce business. This also seems to be a part of its attempt to cut down its financial losses. Zomato also recently halted the rain surcharge waiver for Zomato Gold members.
Impact on Market Performance
After these developments, Zomato shares experienced a surge. Its stock traded at ₹237.55 on the NSE as of 12:40 PM, which is 4.20% higher.
Tags Cloud
