Online restaurant discovery and food ordering platform Zomato has waived off ‘per cover’ fee or platform fee for restaurants that enable table reservations through Zomato.
The online food order and restaurant discovery platform previously used to charge 7% as commission fees from restaurants under its food ordering business, which excluded delivery and payment gateway charges.
The shift in commission structure comes shortly after the company claimed to have reached profitability in all 24 markets and does not include a waiver of platform fees, delivery charges and payment gateway charges for restaurants, which Entrackr had reported last month.
Currently, Zomato offers table reservation services across 10,000 restaurants in India, UAE, Philippines and Australia. Overall, it has over 25,000 restaurants listed on its platform of which 7,500 are exclusive.
“Retrospectively from June 1, 2017 onward, our restaurant partners will not need to pay a “per cover” fee or even a platform fee to accept seamless digital table reservations from Zomato. Yes, the service will be completely free,” said CEO, Deepinder Goyal in a Blog post today.
This move comes after Zomato’s 1 million reservations mark clocked in September through the one-year-old table reservation offering, a move that Goyal claims makes Zomato the largest in 3 of the 4 countries where the service is available.
The changes in payment structures for restaurant partners in its allied business models come even as Zomato is in advanced talks to raise up to $200 million from Alibaba and its payment affiliate Ant Financial in a round that could see the firm is valued at $1.1 billion, according to Entrackr’s report last month.
The company is betting on the decision to waive reservation fees, enabling restaurants to partner for this service in its plans to get ahead against Swiggy which currently has 18,000 restaurants for delivery and listings on its platform.
As of now, Swiggy’s commission fees stand at 15-30% including delivery and payment charges Zomato currently falls behind Swiggy, which gets around 4 million orders per month. However, the company has an edge over competition with higher average order value of Rs 430. But at Rs 350, Swiggy is not far behind in this race.