Restaurants presently pay 20 percent of order value as commission on an average, besides each also offering discounts as they deem fit.
Restaurants have initiated negotiations with food delivery platforms and aggregators to reduce commissions, as business suffers a downturn because of the COVID-19 pandemic.
As dine-in earnings plunged, restaurants asked aggregators to reduce commissions so they can earn from online deliveries and takeaways – a segment expected to boost business over the next six to eight months, Mint reported.
While talks are on, there has been no progress yet, it added. Restaurants presently pay 20 percent of order value as commission on an average, besides each also offering discounts as they deem fit.
Rohit Aggarwal, Director - Lite Bite Foods, has told the paper that all their present business is now delivery based while earlier it was dine-in based.
“Reduced commissions by online food aggregators will make business viable for the long term,” he added.
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Lite Bite Foods, which manages a clutch of brands such as Zambar, Asia Seven, Punjab Grill and Street Foods by Punjab Grill among others, was in talks for months. The pandemic has made the argument relevant again, the report said.
Thomas Fenn, the co-founder of Mahabelly and managing committee member, National Restaurant Association of India (NRAI), told the paper that talks had been initiated by “several restaurants” but “the needle hasn’t moved at all as the market was down”.
The body itself is expected to make formal recommendations to aggregators for the same as business uncertainty remains a serious concern.
“Commissions are painful as businesses are facing a slump right now. We had too many things on our plate to take this up (earlier). Now that markets have opened up, it is important to address it," Fenn added.
On the other side, a spokesperson for Zomato told the paper that commissions are in line with the value it delivers and cost incurred.
“We are working closely with restaurant partners to implement initiatives that improve cash flows and help them in these difficult times,” they added.
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