EMC Blog

Impact of Commission-free food delivery services on restaurants

As the overall economic activities are picking up across the nation, restaurants all around are now pressurizing leading online food delivery app services for changing the commission structure. The restaurants are also demanding the reduction of discounts while levying new fees for deliveries. 

Restaurants keep telling the respective platforms to bring about the given changes while particularly doing away with the concept of forced platform discounting. Without this imposition, the restaurants of the country claim that they will not be able to sustain operations in the current “new normal” scenario.

The given request for ensuring commission-free food delivery app services by restaurants has come up when the restaurants have been given the allowance to open the respective dine-in services. However, specific government guidelines along with the overall safety concerns of the consumers have implied reduced footfall in the respective physical outlets. The all-new safety as well as cleaning measures are only adding to the overall costs of the units. 

The scenario of Commission-based Food Delivery in the Country

In typical scenarios, the online food delivery app service providers are known to charge around 20 to 25 per cent in the form of a commission of the total order value. The commission value tends to depend on multiple factors like the overall consumer reach, exclusivity, and brand. As per the NRAI (National Restaurant Association of India), it has started conversations with the online food service providers as dine-in services continue to remain mute.

Read also :- 5 Customer service issues that Food delivery apps must solve

Introducing the Commission-free Model in Other Parts of the World

Foodetective –a leading business involved in the food industry with its headquarters in Geneva, had launched its delivery services with a proper monthly fee and around 2 per cent commission fee on every order. 

However, due to the overall impact of the covid-19 outbreak on the takeaway and restaurant sectors, the business aims at remodelling its monetization strategy. It is, therefore, asking businesses to pay around £25 as the subscription fee on a monthly basis.

The given strategy is known to be welcomed by the restaurants. The countries that are currently in lockdown –including France, the United Kingdom, Spain, and Italy, have forced the closure of cafes and restaurants. However, in most instances, the deliveries still remain open. 

There is no denying the fact that life, as we knew, has changed significantly. We are not sure of when life would return to normal. Most restaurants in several parts of the world have closed their dining rooms and might not even feature a proper system for online ordering and menus. Therefore, to make it simpler for such restaurants to leverage the benefits of online food delivery app services, the involved partners should aim at doing away with the commissions. 

There should be no ongoing obligations or commitments required. By ensuring the commission-free model, such restaurants or cafes can look forward to continuing operating while remaining profitable and staying afloat during the challenging times. While ordering, the customers are just required to pay the exact amount that is available on the restaurant menu. At the same time, the businesses involved should receive 100 per cent out of the given sales. With such a transparent model, restaurants and other businesses involved in the online food delivery app industry can look forward to maximizing the overall profits amid the pandemic.


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