Zomato is preparing for a future where even 30-minute food deliveries are just not fast enough.
The Gurugram firm’s 10-minute, hot restaurant food-delivery service, Zomato Instant, will be introduced in its home base next month.
While quick commerce has been gaining traction in groceries – Zomato itself backs Blinkit – “nobody in the world has so far delivered hot and fresh food in under 10 minutes at scale”, CEO Deepinder Goyal wrote in a blog post on March 22. “We were eager to be the first to create this category, globally.”
Zomato may be on to something, experts say. But is there enough demand for it?
“Unlike grocery, food as a category has a better chance to succeed in the 10-minute delivery format,” according to Yugal Joshi, a partner at consultancy Everest Group. “People may not want to plan for food the way they can for grocery. They may want to order things on the fly. Still, these are edge cases.”
The food delivery and restaurant aggregator plans to scatter “finishing stations” with 20-30 bestseller items from various restaurants based on demand predictability and hyperlocal preferences. With this format, it will bring down prices for customers by 50% while maintaining margins and incomes for restaurant and delivery partners.
Last year, pizza chain Domino’s reduced its delivery window on most orders from 30 minutes to 20 minutes by opening more stores and investing in prediction models that let kitchens start on your order before you even make the payment.
Moreover, Zomato can “ensure highest grade ingredients and hygiene practices” across the supply chain. The challenge for Zomato is that “its core value proposition has a shelf life and is replicable. Therefore, it has to keep adding these newer offerings”, said Joshi.
But there are one too many moving parts – Zomato’s own kitchen, restaurant partner, delivery partner, and its algorithms – that could make the experiment a black hole for the loss-making firm. The way to succeed “will be to fail fast. They have to be courageous enough later to shut down a service if it does not work”.
Effect on workers
Zomato asserts there is no pressure or penalty on delivery partners to meet deadlines.
“If the high order density areas are identified well and there are dark stores to fulfil nearby, the delivery time can be actually just five minutes,” Mayank Sahni, product operations manager at fintech firm Finbox, tweeted. “Five is for packing and delivery folks can be stationed at stores instead of being forced to go from one part of the city to another.”
But even if Zomato manages to get this right, critics are not sold on the shift towards faster deliveries. They still fear gig workers will be exploited. On top of insufficient pay and long working hours, they’re “devoid of basic employee rights – health insurance, Employees’ Provident Fund, basic salary,” Kushal Vala, a machine learning research scientist, wrote on LinkedIn.
“The bigger problem of the capitalist ecosystem is the companies trying to outdo each other, with complete disregard for their ground workers,” Vala said. “Zomato being a listed company, adopting this heinous model could have repercussions. I will not be surprised if in future, Nykaa, Amazon, Myntra do the same thing to catch up with the rest of the pack.”
However, these problems exist whether or not deliveries happen hyper-locally, argues Sahni.
“The delivery speed should not frame our arguments for or against worker right…It should be a more nuanced understanding of technology, fleet management, order management and benefits, and policies for the partners.”
This article first appeared on Quartz.