Online food delivery platform Zomato has introduced a 'long distance service fee' for orders placed from restaurants located beyond 4 km, the Economic Times has reported. As per the new pricing structure, customers will be charged Rs 15 if the distance between the restaurant and delivery address is between 4 and 6 km and the order value exceed Rs 150. For distances beyond 6 km, the service fee may range from Rs 25 to Rs 35, depending on the city, irrespective of the order value.
Some restaurants have expressed concern that this additional fee may lead to an increase in commission charges levied by Zomato. The 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.
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Before the COVID-19 pandemic, Zomato offered free deliveries within a 4-5 km range. This delivery radius was extended to up to 15 km post-pandemic when many restaurants were temporarily shut.
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 notes that "nearby orders reach you faster and are closer to their right temperature."
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Elaborating on the rationale, a Zomato executive told the Economic Times, "This decision must be viewed alongside the distance-based rating system. Our data shows that the user experience tends to decline as the delivery distance increases."
Both the "long distance service fee" and the distance-based rating system appear aimed at nudging customers to order from restaurants located closer to their homes or delivery locations, typically within a 4 km radius.