Zomato begins delivery via bicycle: Bold move towards sustainable growth

A few days ago we saw how the hailstorm covered the streets of Delhi NCR, and it looked like it had snowed in Manali. This only went on to emphasise how climate change was real, and there is a dire need for sustainable development.

In a Press Release this Monday, Zomato’s food delivery CEO Mohit Gupta reiterated the same saying, “Climate change and environmental challenges are an inalienable reality of the future.”

Keeping this in mind, the food tech giant has recently launched bicycle delivery services with the aim of peddling the future towards sustainable mobility.

It is a well thought out step that is to benefit the society, company, and the startup ecosystem from all angles. How? Let’s take a look at the society angle first.

Environment, foodies & rider friendly

On average, Zomato does about a million orders a day, and the distance traveled is 4.4 kms on each trip. With short distance deliveries by cycles - both mechanical and electrical - pollution reduces significantly, in terms of carbon footprint and noise, in turn, reducing environmental damage.

For the willing riders, this will result in better health, easier navigation in streets and narrow lanes, they will not have to get stuck in traffic, and will face no parking issues as well. These riders, along with a bicycle, will also receive an ergonomic delivery bag, diligent training, and education in on road safety norms at the Zomato Rider University.

Most importantly, it creates an employment opportunity for a large part of the population that doesn’t have a driving license.

Since this service is only applicable on last mile delivery, where orders to be delivered within an average of 2.5 km radius, this means speedier delivery by an efficient delivery fleet.

Profit & startup friendly

When it comes to the company, Zomato has entered into the partnership with several startups operating in the cycling segment like Mobycy, e-HIRAN, Yulu, TNT, and Zoomcar’s PEDL to provide cycles to the fleet.

This, for one, means lower investment in gathering the required number of cycles for the riders, plus a reduction in fuel costs. The cost of training the riders is one time. Further, what the company loses in paying these new set of riders, it shall make up in the reduced fuel costs and the expected increase in scale.

The hike in the volume of order numbers is slated to increase with the increased efficiency, farther reach into the crowded spaces of cities, and the ongoing hefty discounts.

All these factors combined will lead to sustainable growth for the company itself. A growth that is based on unit economics and keeps the company to the path of profitability.

The company has a last mile delivery fleet of 1.5 lakh partners across 150 cities. As of now, there are 5,000 riders delivering food to customers on cycles across 12 cities, majority being in Delhi NCR.

Evidently, these 5,000 e-cycles being derived from the numerous partnerships has also increased business for the associated companies. The company has further plans to encourage its vendors to adopt more and more e-cycle based deliveries, and convert 40 per cent of its fleet to power-assisted bikes.

This will make the growth of Zomato and all inclusive step for every stakeholder.

Not the first time

This isn’t the first time Zomato has taken steps to becomes an environment-friendly company. It has other initiatives like HyperPure, Hygiene ratings, and Feeding India to contribute its bit to the society and stakeholders.

In the Indian Startup ecosystem as well, the adoption of e-cycles for delivery has been done by Flipkart previously. The Sachin and Binny Bansal founded the company had started with the initiatives in 2017 with a small plot and kept on adding to it every month.

That initiative ran on similar lines, reducing pollution, providing employment, increasing ease and efficiency in deliveries. For Zomato, as compared to Flipkart, there is an added benefit of parcel size, where the delivery items could be heavier for Flipkart’s fleet, unlike Zomato.

Going forward, it will be interesting to see what impact the initiative by Zomato ends up bringing on the environment, riders, customers, and company. In the era of copy paste between startups, if more enterprises follow Zomato, a positive change can be brought for sure.