Ordering the food from online food delivery platforms is likely to go costlier in the coming days amid the rise in fuel prices due to the Iran War leading
to crude oil supply crisis. A near-term cost pressure for food delivery and quick commerce platforms such as Eternal, parent company of Zomato and Swiggy is anticipated, as per a report by Elara Capital. The report said the recent fuel price hike of around Rs 4 per litre has increased petrol and diesel prices by nearly 4 per cent amid geopolitical tensions and elevated crude oil prices. It estimated that the current 4 per cent fuel price increase would have a negative impact of around Rs 0.44 per order. Elara Capital said even if gig workers seek higher payouts due to the increase in fuel prices, the impact on the companies' earnings is likely to remain under control in the near term. "Any increase in fuel cost can directly impact delivery economics by lowering delivery partner yields and potentially increasing the risk of payout-related pressure," the report said. The average delivery cost stands at around Rs 35-50 per order for quick commerce and Rs 55-60 per order for food delivery. On a blended basis, the average delivery cost is estimated at around Rs 45 per order for Eternal and around Rs 55 per order for Swiggy, it estimated. Assuming fuel accounts for nearly 20 per cent of delivery costs, the implied fuel cost per order comes to around Rs 9-10 on a blended basis.
Gig workers protest against the fuel price hike:
Last week, the Gig & Platform Service Workers Union (GIPSWU) has demanded an immediate rise in per-kilometre service rates and announced a five-hour shutdown of app-based services in protest.
The union warned that the increase in fuel prices will severely impact nearly 1.2 crore gig workers who depend on motorcycles and scooters for their daily income.
It warned that many workers may be forced to leave the sector if earnings do not rise in proportion to fuel and maintenance costs.
