Zomato demands commission hike from restaurants, faces pushback in industry

Zomato, a food delivery company, is in talks with restaurants to demand an increase in commission, according to reports from Economic Times. This move has caused resentment within the restaurant industry, with many refusing to accept the demand. Zomato has asked for an increase from 2 to 6 percent after experiencing increasing losses in the third quarter of the 2022-23 financial year, and a decrease in food deliveries.

However, restaurants have turned down Zomato's request, as people are now preferring to dine in after the end of the pandemic. Kabir Suri, President of the National Restaurant Association of India (NRAI), has said that he will talk to Zomato about this issue. Despite this, Zomato has started renegotiating terms and conditions with many restaurants regarding commission, with a focus on increasing profit in any situation. Zomato has been charging 18 to 25 percent per order commission for the past two years.

The demand for a commission hike has led to increased losses for Zomato in the December quarter. The company lost Rs 347 crore in the December quarter, which is Rs 63.2 crore more than the same quarter last year. However, the company's revenue has increased by 75 percent to Rs 1948 crore.

In an effort to cater to students and office goers, Zomato has recently launched a pilot project in Gurugram called Home Style Meal Service Everyday. These meals will be delivered in just 10 to 15 minutes at a fixed price of Rs 89 per mile, excluding delivery costs.

It remains to be seen whether Zomato's demand for a commission hike will be accepted by restaurants, or if the company will continue to renegotiate terms and conditions. Despite this setback, Zomato is still focused on increasing profit and expanding its services to cater to the needs of its customers.

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