Zomato introduces new ‘Long distance service fee’ for deliveries beyond 4 km

Deepinder Goyal’s Zomato has introduced a 'long distance service fee' for orders placed from restaurants located beyond 4 km, the Economic Times has reported.

Zomato's new pricing structure

As per the new pricing structure, customers will be charged Rs 15 by the online food delivery platform if the distance between the restaurant and delivery address is between 4 and 6 km and the order value exceeds Rs 150.

For distances beyond 6 km, the service fee may range from Rs 25 to Rs 35, based on the city, irrespective of the order value.

Some restaurants are concerned that this additional fee may lead to an increase in commission charges levied by Zomato. 

The food tech company, however, has assured its partners that the total service fee, including the long-distance component, will remain under 30 per cent-excluding other costs.

Despite this, some restaurant owners claim that their total commissions could still reach up to 45 per cent, as per the Economic Times report.

Before the COVID-19 pandemic, the food delivery aggregator offered free deliveries within a 4-5 km range. This delivery radius was extended to up to 15 km post-pandemic, when many food joints were temporarily shut.

Restaurant partners worried

Speaking with English daily, a restaurateur said, “There are changes to the commission terms every few months, and it is frustrating to do business this way without any clarity on commission structures. Several restaurants are in touch with each other to formally raise a complaint with Zomato over this and are contemplating going off the platform for a day in protest.” 

Additionally, the Gurugram-based company has also approached some restaurants with revised agreements reflecting its parent entity's name change to Eternal. As reported, the insiders said the new agreements introduced clauses to penalise restaurants for non-compliance with price parity.

“They are also saying that a restaurant may be suspended or penalised if it is found to be encouraging customers to order from outside Zomato,” the person added.

According to the report, a Zomato insider said the "long distance service fee" is tied to the platform's recent move to distance-based customer ratings.

These ratings are based on "actual ratings received on Zomato from customers at similar distances," as mentioned in the app. It also mentions that "nearby orders reach you faster and are closer to their right temperature."

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