Zomato's 10-min delivery bid catches Parliament's attention over concerns about personnel

Foodtech giant Zomato has announced that it will soon be launching a 10-minute delivery option on its platform. While most consumers may seem excited by the proposition of getting their meal delivered faster, many are wary about the impact it can have on delivery partners.

Karti P Chidambaram, Member of Parliament (MP), representing Tamil Nadu's Sinvaganga constituency in the Lok Sabha, took to Twitter to express his concerns. He said that the quick delivery plan would cause undue pressure on delivery executives. He stated he has also written to the government and has even raised the issue in parliament.

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He explained the 10-minute delivery would be a gamble for gig workers.

Though the announcement from Zomato has raised concern, CEO Deepinder Goyal pointed out before announcing the policy in the blog that all measures have been taken to not put delivery partners under pressure.

“Before we even talk about this, we will start with a clarification – to fulfil our quick delivery promise, we do not put any pressure on delivery partners to deliver food faster. Nor do we penalise delivery partners for late deliveries. The delivery partners are not informed of the promised time of delivery. Time optimisation does not happen on the road, and does not put any lives at risk,” Deepinder's blog read.

Last month, Zomato had posted a consolidated loss of Rs 63.2 crore in the third quarter of 2021-22. This was an improvement from the year-ago period when the company made a loss of Rs 352.6 crore.

In the previous quarter, the food delivery decacorn posted a loss of Rs 429.6 crore. Its consolidated revenue from operations was Rs 1,112 crore — 82.5 percent higher than from a year ago when it posted Rs 609.4 crore. Sequentially, it grew by 8.5 percent from the previous quarter when it posted a revenue of Rs 1024.2 crore.

The company said that its customer delivery charges declined by 22 percent, driven by a reduction of Rs 7.5 per order in customer delivery charges in Q3 FY22 as compared to Q2 FY22.

Since its lisitng on July 23 last year, Zomato's share price had hit its highest price of Rs 169.1 apiece on November 16 last year.

At its lowest price of Rs 75.55 apiece, on BSE, on March 16, 2022 - the stock has witnessed a correction of over 55 percent - and briefly fell a little below its issue price of Rs 76 a share druing the initial public offering (IPO).

While the impact of Zomato's announcement on its share prices will unfold tomorrow, it has nevertheless garnered strong reactions.