Online food delivery app Swiggy may cap its commission at 25 percent. The development has come after its meeting with the National Restaurants Association of India (NRAI) last week.
The step could be seen as a potential thaw in the ongoing deadlock between app-based food delivery companies and restaurant body. Swiggy's decision to cap its commission is expected to benefit small business owners, who are unable to process larger volume of orders in terms of revenue, The Economic Times reported.
A person privy to the development said, "Compare this to large chains, which sign ironclad agreements because they have the capability to furnish larger volumes." However, a Swiggy spokesperson denied the news as "speculative".
The spokesperson said, "Commissions are a range, depending on various factors. Keeping these factors well defined and transparent, Swiggy has always worked with commissions that are mutually agreed upon and create a win-win with our restaurant partners."
Last month, more than 300 restaurants in Gurugram de-registered themselves from online apps, including Swiggy, Zomato and Easydiner. Moreover, a Hyderabad-based hotel association has also said that most restaurants in the city were planning to break their association with online food delivery platforms if the commission were not capped and discounts were not removed.
The move to charge 25 percent commission would mean a loss of revenue to Swiggy as most of the restaurants earlier gave around 30 percent commission of their order value. "It can be easily made up via ads for now and other revenue verticals such as Stores later", said the source quoted earlier.
The issue of the cap on commission was discussed last week with the meeting with NRAI but the restaurants' association was insisting on a matrix-like structure. One of the people who attended the meeting said, "We spoke about a tier-based structure that would depend on average order value and the number of orders." Both the party reached an "in-principle agreement" and had decided to schedule another round of meeting by mid-September to discuss further deliberate on the issue.