Rapido slashes food delivery fees to rival Zomato, Swiggy

Ride-hailing firm Rapido plans to launch a food delivery service with commission rates ranging from 8% to 15%.

This is in contrast to the 16% to 30% rates charged by competitors Zomato and Swiggy.

Under the new service, Rapido will charge a fixed fee of 25 rupees (US$0.30) for orders below 400 rupees (US$4.80) and 50 rupees (US$0.60) for orders above that amount.

Customers can place food orders through the Rapido app, which will feature a list of participating restaurants.

The service is expected to pilot in Bengaluru by the end of June or early July.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Commission wars signal potential reshaping of India’s food delivery duopoly

Rapido’s entry with dramatically lower commission rates directly targets the most controversial aspect of the existing food delivery ecosystem.

The 8-15% commission structure represents a reduction of up to 50% compared to the 16-30% that Zomato and Swiggy typically charge restaurants 1.

This pricing strategy follows growing restaurant dissatisfaction, exemplified by public complaints from business owners like Vandit Malik of The Garlic Bread, who claimed the incumbent platforms were “becoming unsustainable for small restaurant owners” 2.

The Competition Commission of India has already flagged potential market imbalances in Zomato and Swiggy’s operations following complaints from the National Restaurant Association of India, indicating regulatory concern about the current duopoly structure 3.

With Zomato controlling 54% and Swiggy 46% of India’s food delivery market, Rapido’s disruptive pricing threatens to fragment a highly concentrated industry that currently gives restaurants few alternatives 4.

2️⃣ Hidden costs create significant financial burden beyond the visible delivery fees

The true cost of food delivery extends far beyond the advertised prices, with research showing consumers pay an average “aggregator premium” of Rs 46 per dish compared to restaurant-owned delivery platforms 5.

This premium translates to an annual financial burden of approximately Rs 12,000 for households in metro areas, with the combined hidden costs across India estimated at Rs 9,000-11,000 crore annually 5.