Zomato food rescue: Tackling wastage or plank for profiting?

New Delhi: Zomato, one of India's leading food delivery platforms, has introduced a new feature named 'Food Rescue' aimed at reducing food wastage from cancelled orders.

The initiative, announced by Zomato's co-founder and CEO Deepinder Goyal, allows nearby customers to purchase recently cancelled food orders at discounted prices, presenting an innovative approach to an ongoing issue.

We don't encourage order cancellation at Zomato, because it leads to a tremendous amount of food wastage.

Inspite of stringent policies, and and a no-refund policy for cancellations, more than 4 lakh perfectly good orders get canceled on Zomato, for various reasons by customers.… pic.twitter.com/fGFQQNgzGJ

— Deepinder Goyal (@deepigoyal) November 10, 2024

Each month, Zomato sees approximately 400,000 orders being cancelled, which has led to significant food wastage. With the 'Food Rescue' feature, when a customer cancels an order after it has been picked up, the app will notify users within a 3 km radius of the delivery partner carrying the food. These nearby customers can then claim the order at a lower price, ensuring that the food does not go to waste.

Here's how it works:

Notification: When an order is cancelled, it will appear on the app for nearby customers.

Pricing: The food is available at an "unbeatable price," making it attractive for users to opt for these orders.

Packaging: The food remains in its original, untampered packaging to ensure quality and freshness.

Time Limit: To maintain the food's freshness, the option to claim the order lasts only for a few minutes.

Goyal clarified that it does not retain any profit from these transactions, except for the necessary government taxes. The payment from the new customer is split between the original customer who cancelled the order (if they paid online) and the restaurant partner. Additionally, delivery partners are fully compensated for the entire journey, ensuring no financial loss for them in the process.

More details –

The canceled order will pop up on the app for customers within a 3 km radius of the delivery partner carrying the order.

To ensure freshness, the option to claim will only be available for a few minutes.

Zomato will not keep any proceeds (except the required…

— Deepinder Goyal (@deepigoyal) November 10, 2024

This initiative has received mixed reactions on social media platforms. While some users applaud Zomato for its creative approach to reduce food wastage, others question whether this is a genuine effort towards sustainability or a clever marketing strategy to increase app usage and customer retention. 

bro some people will cancel then take advantage: Big loop hole @zomato @deepigoyal how you are going to tackle it?

— Ashish (@ashish42kk) November 10, 2024

Critics pointed out that while the feature does address wastage to some extent, it might also incentivise users to wait for cheaper deals, potentially encouraging more cancellations.

The original customer still pays the cancellation fee – which is 100% of the amount of the canceled order.

Am I missing something?

— Deepinder Goyal (@deepigoyal) November 10, 2024

Restaurants have the option to opt out of this feature if they choose to, though Zomato claimed a 99.9% participation rate from its restaurant partners.