Food delivery business
I go to Mani's Cafe at Shivaji Park. I order 1 plate Idli, 1 plate Medu vada and 1 Upma. Total bill comes to Rs.162.
On my way back, I check on Zomato what would it cost for the same food to be ordered online. The bill comes to Rs.299. My delivery fee is waived off because of Gold, else the real bill is 299 + 35 = Rs.334.
This is more than 2X of what I paid at Mani's.
Here is the calculation -
- I am charged Rs.230 by Mani's on Zomato for food that is priced for Rs.162 at the restaurant
- Zomato charges me GST of Rs.25
- Delivery fee of Rs.35
- Platform fee of Rs.10
- I pay a delivery tip of Rs.20
Zomato has a business model where they recover their commission by forcing the restaurant to increase their prices by a whopping 42% for customers. Thereafter Zomato passes on their GST to customers. They pass on the platform fee and delivery fee to the customer. Plus they put an icon of a man with folded hands asking you to tip him.
Basically customer orders and pays for food, restaurants make food, the delivery man delivers it to us. And as a middleman - Zomato charges 2X for their service.
A good idea for youngsters would be to calculate their monthly spends on Zomato and divide them by half. That is what they will save every month by spending directly in the restaurant rather than ordering on Zomato.
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You actually forgot to mention the large app ecosystem zomato maintains, servers databases maps and other infrastructure costs. The salary they give to their employees, money on RnD, providing flawless services to the customer. They have to get their money from somewhere, they are not simply a ‘middleman’