[StarrySky]

Not only do the restaurants jack up prices, at least some of them also reduce the portion size for Swiggy/Zomato deliveries. Experienced this first hand when we had to rely mostly on the apps for a couple of weeks last time we visited India. Thankfully, there were enough restaurants near where we stayed. So we quickly switched to ordering directly with the restaurant and picking up the food ourselves.

However, if you want to try food from some very good restaurant a little far away from your place, but you don't fancy negotiating the traffic, the delivery apps come to the rescue! Just be prepared to pay for the convenience.

[d.w.w.]

As a Swiggy customer I have few things to share.

- Price comparison

Swiggy prices are always higher than restaurant costs, but then comes the coupons(not bank discounts). I mostly order from the same restaurant and used to get takeaways from there myself before so I know how much extra they are charging on swiggy. I buy twice or trice a month, so most of the times I buy, there will be come coupon available which can save me minimum 100 to 150rs per order. If there are no coupons available, I skip the purchase if possible or get it from some other restaurant. With the coupon applied, the difference will come down to 50 to 75rs. Considering the time and fuel I spend to get it from the restaurant directly this extra money is fine with me. So in such scenarios, Swiggy margin is much lower. Indian customers are smart and look around for deals, so the chances of Swiggy making fat profits as in OP will be very less.

-- Spends

Swiggy charges more on established markets (like metros) and give big offers on tier II cities. In my hometown I see Swiggy food is actually cheaper than hotels, so they are actually burning cash in such cities.

Swiggy instamart doesn't look like a profitable business at the moment. Let me give an example. I have Swiggy super, so they don't charge anything for instamart delivery. I buy 2 packets of milk (Rs22*2) and 6 pcs of egg (64rs) which makes the order value >100 qualifying it for free delivery. From what the regular shopkeepers told me, the profit on milk is very less. For our calculation lets take it 1rs/packet (shopkeepers charge more than mrp for milk in Chennai for the same reason). The egg is sold in regular shops for 89rs where as Swiggy sells it for 64. And then on top of the item cost they charge handling charge of Rs4/order (was 2rs before). Assuming Swiggy keeps half of the egg cost as margin, the total margin is 2+32+4 = 38rs. This can no way cover the costs incurred by Swiggy.(real estate cost + electricity + manpower + delivery+ packing). They have tough competition from Zepto and bbNow in this space, so they cant turn this business profitable for sometime.

[dragonfire]

My time is worth more than whatever premium Swiggy and Zomato is charging even after adding a Rs50 tip. I don't understand why people who bill themselves $50 per hour to their clients are ready to drive to the restaurant and wait 30 mins to pick up an order. Penny wise, pound foolish?

[atulsian]

Originally Posted by dragonfire

My time is worth more than whatever premium Swiggy and Zomato is charging even after adding a Rs50 tip. I don't understand why people who bill themselves $50 per hour to their clients are ready to drive to the restaurant and wait 30 mins to pick up an order. Penny wise, pound foolish?

50$ per hour is what you earn on a daily basis? That translates to approx 4k per hour * 8 = 32000 per day. Is that everyone here gets paid as much as they bill their client? I so wish that it was in my case. My per hour billing rate to the client is 200$ per hour.

Even if it was i would rather pay premium for the service as tip or service charges rather than inflated prices on the actual food.

[dragonfire]

Originally Posted by atulsian

50$ per hour is what you earn on a daily basis? That translates to approx 4k per hour * 8 = 32000 per day. Is that everyone here gets paid as much as they bill their client? I so wish that it was in my case. My per hour billing rate to the client is 200$ per hour.

Even if it was i would rather pay premium for the service as tip or service charges rather than inflated prices on the actual food.

An average software engineer is billed at $25 to the client. A senior profile fetches upwards of $50.

Even if it was i would rather pay premium for the service as tip or service charges rather than inflated prices on the actual food.

Does it matter under which head they are charging as long as the outgo is the same? Its the small "price" you pay for not wasting your own time. Driving out to your favorite restaurant, ordering, waiting, picking up and driving back wastes easily an hour of your time. Now compare whatever you make in an hour with the premium you pay Swiggy or Zomato and decide for yourselves whether it is worth or not.

[antz.bin]

I was a Zomato loyalist for ages and hardly used Swiggy. But ever since Zomato tried improving profitability and raised prices, it was now suddenly more expensive than Swiggy, which itself was more expensive than a dine-in order.

When this happened, it coincided with me moving residences and my usual restaurants were no longer an option. I started exploring and found that platforms like EatClub and EatSure were offering more consistent quality, better portion size, decent variety and fast delivery to my new place at the same time when I was not interested in vetting new delivery places at overinflated prices. Turns out my Zomato+Swiggy orders fell from 70odd in both 2020 & 2021 to 3 orders in 2022 and 1 order YTD 2023.

Turns out EatClub and EatSure both have a more sustainable business model than Zomato/Swiggy since they can bypass these aggregators for delivery orders, are faster and cheaper since they only deliver close by using EV scooters and also don't have to spend as much on real estate since they are based exclusively off cloud kitchens. Their biggest advantage is that they own the customer data and can use it to optimize themselves better.

I still fail to understand why Swiggy and Zomato both cannot turn a profit. It's not as if they don't charge premiums. They most certainly do. It is a tech enabled product and the only human interaction that exists for the person placing the order is the delivery executive which is charged for separately.

The delivery guys can definitely independently improve their daily earnings by reducing their OpEx by ditching their petrol vehicles for electric ones. But I see no way that Zomato and Swiggy can get profitable apart from raising their own charges which are quite high already. The customer is already used to ordering but the way this is going, 10 years from now, it won't be Zomato or Swiggy delivering a majority of those orders.

[Jaguar]

Originally Posted by dragonfire

An average software engineer is billed at $25 to the client. A senior profile fetches upwards of $50.

But that is not what they get in hand, do they? A person with a monthly salary of 2l is only getting around $80 a day, much less than the 25 or 50 per hour rate.

Originally Posted by StarrySky

So we quickly switched to ordering directly with the restaurant and picking up the food ourselves.

The problem is that most restaurants have stopped taking phone orders for pick-up. So unless you are ready to wait for 30min, the self-pick-up option is possible from fast food joints.

Another thing I have noticed is that places like Starbucks are open only for S/Z after a certain time of night. Once we went to a coffee shop late at night and were told that they will not serve us and that if we want we'll have to order online

The long-time harm caused to the restaurant business aside, the point nobody is talking about is the environmental cost of these startups. Someone riding a motorcycle for a few km to deliver one cup of coffee or a single laddu (as shown in an ad) should not be allowed. The effects of traffic and pollution due to these should be evaluated and controlled.

[m8002?]

Originally Posted by Jaguar

The long-time harm caused to the restaurant business aside, the point nobody is talking about is the environmental cost of these startups. Someone riding a motorcycle for a few km to deliver one cup of coffee or a single laddu (as shown in an ad) should not be allowed. The effects of traffic and pollution due to these should be evaluated and controlled.

Valid point but that is to some extent offset by the people not using cars to visit the restaurant. Also, if the delivery agents club orders, its even lesser fuel consumption.

[binand]

Originally Posted by antz.bin

I still fail to understand why Swiggy and Zomato both cannot turn a profit.

I was also curious, so I looked up the numbers reported to the regulators (Zomato only). They seem to be making profits on delivery operations in cities where they are present for a long time. Operations that are not profitable yet are (a) new cities in which they launched, and (b) new products they launched.

[d.w.w.]

Originally Posted by dragonfire

An average software engineer is billed at $25 to the client. A senior profile fetches upwards of $50.

These are the rates your company charges for your time, not what you get paid. The value of your time should be calculated based on the productive work you do outside of your office hours or the personal time you spend with family. Even if you are going to spend 1hr to grab the food yourselves, you are still going to work 8-9 hrs in office, so the time you take is your personal time and not work hours. (unless you get paid extra for the extra hours you log at work)

Originally Posted by Jaguar

The problem is that most restaurants have stopped taking phone orders for pick-up. So unless you are ready to wait for 30min, the self-pick-up option is possible from fast food joints.

Most restaurants have a mobile number which will not be shared publicly. If you talk to them, they will share this number and will accept orders over the phone. One time the guy at reception shared his personal number with me and asked to call him directly for orders.

[dragonfire]

Originally Posted by d.w.w.

These are the rates your company charges for your time, not what you get paid. The value of your time should be calculated based on the productive work you do outside of your office hours or the personal time you spend with family. Even if you are going to spend 1hr to grab the food yourselves, you are still going to work 8-9 hrs in office, so the time you take is your personal time and not work hours. (unless you get paid extra for the extra hours you log at work)

So would you rather waste one hour picking up your dinner or spend that time with your family or friends for a nominal fee?

I know most Indians would rather save the penny, but for the rest of us, swiggy, zomato are a boon.

[d.w.w.]

Originally Posted by dragonfire

So would you rather waste one hour picking up your dinner or spend that time with your family or friends for a nominal fee?

My earlier post on this thread answers your question.

Originally Posted by d.w.w.

Considering the time and fuel I spend to get it from the restaurant directly this extra money is fine with me.

[anoopGTkrish]

Originally Posted by ninjatalli

Customer side economics


Replace this restaurant with any other restaurant in your location, and I'd make a fair guess the numbers will play out more or less the same.

Cannot generalise unfortunately. I had this observation and decided to test out the hypothesis. My observation was that low priced restaurants/ street corner restaurants have jacked up the prices. For most of the higher end restaurants, prices are more or less the same.

I use Swiggy primarily for ordering food from cloud kitchens. Cloud kitchens like Bowlcompany, eatfit, soul food, etc. offer good quality, hygienic food at nominal prices.

[am1m]

Originally Posted by anoopGTkrish

I use Swiggy primarily for ordering food from cloud kitchens. Cloud kitchens like Bowlcompany, eatfit, soul food, etc. offer good quality, hygienic food at nominal prices.

Very sensible. I was on the fence about this discussion. On one hand, I've seen personally the difference in prices and portion sizes when I order on Zomato versus going to the same restaurant to dine-in.

On the other hand, with both family members working and with unpredictable schedules usually, plus the crazy traffic and no chance of parking in Bangalore, ordering online is certainly worth it. Ordering from cloud kitchens, instead of the restaurant seems like the sensible thing to do. Thanks!

[Precision]

Has anyone tried ONDC options for food delivery?
I saw it for the first time today on the app,pricing looks sensible though.