Zomato ends rain fee waiver for Gold members as losses balloon

Zomato has quietly announced that it will now charge a ' rain fee' from its Gold subscription members. The restaurant aggregator has revamped its subscription plan to levy a surcharge even from its premium members for deliveries made during rainy conditions.

Most foodtech and quick commerce platforms put an additional rain fee on their deliveries. Zomato too used to charge Rs 10-35 as a rain fee but waived this amount for its Gold members. This benefit will now be rescinded from May 16. The food delivery platform also charges Rs 10 as a platform fee for every order.

In an app notification, Zomato said the charges will help it compensate its delivery partners better during rain.

Zomato Q4 performance

Eternal, the parent company of Zomato, reported a steep 78% year-on-year (YoY) fall in net profit during the March quarter at Rs 39 crore as losses from quick commerce arm Blinkit continued to weigh on the bottomline. The Gurugram-based company’s operating revenue surged 64% on-year to Rs 5,833 crore, primarily led by growth in Blinkit, which has come neck-to-neck in terms of gross order value (GOV) to food delivery. Blinkit’s growth came at the cost of its operating losses increasing 75% sequentially to Rs 178 crore.

Food delivery, the company’s mature business, continued to grow slowly. CEO Deepinder Goyal attributed the sluggish pace to weak discretionary spends and the rising influence of quick commerce on both operations and demand.

Market share, however, remained stable with hopes of some gains going forward, Goyal said.

Food delivery order volumes were impacted after Zomato delisted around 19,000 restaurants during the March quarter, Goyal said. These restaurants were taken off Zomato for not passing hygiene standards, mimicking established brands, or operating multiple identical menu listings to hog more listing impressions.

In an indication of rising dependence on food delivery for consolidated profits, the company also shuttered its 15-minute food delivery service, Quick, and its homely meals offering, Everyday. CEO Deepinder Goyal, in a letter to the shareholders, said the company saw no visible “path to profitability” for these services “without compromising customer experience”.