From Swiggy to Foodpanda, online food delivery service firms face GST heat

Online food delivery service companies like Swiggy are facing the heat from restaurants after the goods and services tax (GST) on eating outlets was cut to five per cent, from 18 per cent in November, and input tax credit provision was withdrawn.

Some restaurants have started charging higher prices on online food delivery platforms. Others are negotiating a commission cut with online food delivery partners to make up for the 3.5 per cent additional cost due to unavailability of the input tax credit (ITC) facility.

Swiggy, Zomato and Foodpanda provide online delivery services to restaurants at a commission of around 20 per cent, which is levied an 18 per cent GST. Unlike earlier, restaurants can no longer claim ITC on the 18 per cent GST for the input services from these delivery platforms. “These online food delivery companies have represented for a rate reduction or to allow ITC to restaurants. The matter is being discussed," said a government official.

Uber to take on FoodPanda, Swiggy in India with the launch of UberEats

San Francisco-based ride hailing platform Uber launched its food ordering and delivery service UberEats in India, starting off with making the service available in the city of Mumbai.

The move marks yet another commitment from company in India which is currently engaged in a bitter battle with Softbank-funded Ola for winning the country’s ride hailing market. Uber had kicked off its service in India in August 2013 by offering its service to riders in Bengaluru at first.

While Uber did not share too many details, the company said it would look to expand the service to six Indian cities, presumably the country’s largest metros, by the end of 2017. The launch of UberEats in Mumbai will take the number of cities the service is present in up to 78, spread across 26 countries.

“The introduction of UberEATS in India, with Mumbai as the first city, is a major step in our global expansion and showcases our commitment to the region. The app brings the perfect pairing of amazing restaurant partners, innovative technology, and the efficient Uber delivery network at a tap of a button to people in India,” said Bhavik Rathod, Head of UberEATS India.

Rathod had served as the General Manager for Uber’s ride hailing service in India since its entry into the country in 2013.

UberEats will go head to head with services such as FoodPanda, Zomato and Swiggy, which are already well established in all the large Indian cities. All three companies have thousands of restaurants partnering with them, and it will be interesting to see how Uber plans to woo them to join its service.
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