Rapido To Charge Flat Fees For Food Delivery As Outrage Grows Over Swiggy, Zomato's Commission Charges

Rapido's push for entering the food delivery space has taken one more step forward as the cab aggregator has finalised a delivery fees model with potential partner restaurants.

Rapido and restaurants have agreed on a fixed fee model, where restaurants will be paying a flat Rs 25 on every order of up to Rs 400 in value, people directly aware of the matter told NDTV Profit. For order values above Rs 400, Rapido is expected to charge Rs 50 for every delivery.

Economic Times was the first to report on the delivery fees model finalised by Rapido.

In March, Rapido was meeting restaurateurs across India, as it was looking to add direct-to-consumer food delivery services to its application.

The Swiggy-backed bike taxi operator's discussions with restaurants were focused on payment models and the feasibility of delivery operations, people aware of the development had told NDTV Profit.

Rapido's proposed model of a flat delivery fee for food delivery is different from the commission-based models that aggregators like Swiggy Ltd. and Eternal Ltd.-owned Zomato use.

Currently, commissions for restaurants, on both Swiggy and Zomato, range from 10% to 28%, industry insiders told NDTV Profit. On top of this, there are also payment gateway charges and GST that restaurants have to pay to the platforms. Average order value and number of orders also affect the commission charges, the industry insiders said. Added to this, a restaurant's brand identity can also affect commissions.

Generally, larger chains or legendary brands whom Swiggy and Zomato want on their platforms will end up paying much lower commissions than smaller restaurants.

Rapido's foray into the D2C delivery space comes at a time when Zomato and Swiggy have a comfortable duopoly in the market. Restaurants, however, are raising concerns over commission models and margins, which is what Rapido's strategy seems to be focusing on.

Rapido is expected to launch the delivery fees model as part of their pilot project in Bengaluru from July.

To add context, Rapido’s business-to-business logistics arm already offers food delivery services to Swiggy and the Open Network for Digital Commerce.

In 2023, Rapido had raised $180 million in a Series D round of funding led by Swiggy. "Swiggy's participation in this round will build on the synergies between the two companies," it had said. However, this investment lacked an exclusivity clause that could have restricted Rapido's D2C food delivery push, according to people in the know.

NDTV Profit has reached out to Rapido for comments on the development.