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Zomato waives commission from restaurants for table reservations

LiveMint logoLiveMint 03-10-2017 Salman S.H.

Bengaluru: Zomato Media Pvt. Ltd has decided not to charge commissions from restaurants for table reservations made on the restaurant discovery and food ordering platform.

Zomato said it will waive all charges including the ‘per cover’ fee as well as the platform fee with retrospective effect from June. The company said that it recently hit 1 million reservations on the platform across India, the United Arab Emirates (UAE), the Philippines and Australia.

The table reservations service is currently live for 10,000 restaurants in the four countries on Zomato, which said it plans to expand its restaurant network using its zero commission model.

“With this change in fee structure, we are expecting that more restaurants start accepting online reservations from Zomato, and also not switch off their reservation slots during peak hours on weekends,” chief executive officer (CEO) Deepinder Goyal said in a statement.

Zomato said last month that it had turned “profitable” on an Ebitda (earnings before interest, tax, depreciation and amortization) basis and would forgo commissions charged to restaurants on food orders, provided the eateries meet a certain weekly order criterion.

The company is trying to step up its operations after the recent entry of Uber Eats increased competition in the food delivery segment.

Mint reported on 5 September that Zomato, which has received roughly $225 million in cash from investors, is in talks to raise $100-200 million from Ant Financial Services Group, an arm of Alibaba Group Holding Ltd.

The company is trying to better compete with arch rival Swiggy (Bundl Technologies Pvt. Ltd), the largest food ordering platform in India. Swiggy, too, is well-funded, having raised $80 million from Naspers Ltd, Accel Partners, SAIF Partners and others in May.

Swiggy, which has its own delivery unit, started hiring third-party logistics providers in July last year to help scale its business.

Zomato acquired logistics company Runnr last month to reinforce its food delivery capabilities.

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