Rapido Triggers Price War With Swiggy, Zomato Within Days On Food Foray

Food aggregators Swiggy Ltd. and Eternal Ltd.'s Zomato slashed prices of McDonald's McChicken Burger Combo on Wednesday after NDTV Profit reported an exclusive story highlighting the price difference between dine-in and platform charges.

The McChicken Burger Combo costs Rs 199 now on the platform across several delivery locations in Mumbai and Bengaluru. The combo was priced at Rs 315 earlier.

The burger combo's price, when ordered as a dine-in at a McDonald's outlet, costs Rs 199 as well.

To be sure, dish pricing are dynamic across both the platforms and are subject to change without prior notice. With McDonald's specifically, the dishes are priced higher on any online platform, including their own, as part of their global pricing policy. So the Rs 315 price point on Swiggy and Zomato is also the pricing seen on the burger maker's own app.

The pricing comparison was part of a larger story reported exclusively by NDTV Profit, comparing how Rapido's new food delivery platform may cut the final cost a consumer face for ordering-in.

The new platform will ask restaurants to pay delivery fees directly to the delivery partners and is also likely to offer the option of self-delivery at zero cost to restaurants that have their own delivery network.

As reported earlier, Rapido has finalised a delivery fees structure with potential partner restaurants.

Rapido's D2C food delivery platform will also not be charging packaging costs to customers, and customers are unlikely to pay any extra costs other than GST. On top of this, partner restaurants are being asked to keep the same pricing for meals online as they are offline.

Rapido's new platform is also working with restaurant partners to ensure that they have at least four dishes priced below Rs 150 each.

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.

While the platform is likely to work on a zero commission model, it will look to charge a flat subscription fee from restaurants once the business achieves a certain scale.

"At Rapido, we are constantly looking at opportunities to scale our services and bring greater convenience to our users. In line with this vision, we are currently test piloting an online food delivery app in the city of Bangalore," the company said in an emailed response to NDTV Profit.

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

The ride hailing 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 and Eternal-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 that can also affect commissions.

Generally, larger chains or legendary brands whom Swiggy and Zomato want on their platforms 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 its pilot project in Bengaluru from July.