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India's online food ordering: Where tips are a missing ingredient
Summary
India’s service industry is not given to receiving tips from customers, unlike most western countries where handing out generous cash over and above the bill is part of the etiquette, a cultural and customary code.
Bengaluru: Sudheer, a delivery partner working across food delivery platforms in Bengaluru, laughs and pulls out his smartphone when asked how much he gets tipped in a day. He scrolls through the delivery platform’s app that shows tips of ₹0 written against all but one of his 36 orders the previous day.
“Most people are not willing to pay extra money. I deliver 40-50 orders within a 4-km radius every day and only one customer shells out ₹20 each time she orders. It’s quite normal," Sudheer says wryly.
India’s service industry is not given to receiving tips from customers, unlike most western countries where handing out generous cash over and above the bill is part of the etiquette, a cultural and customary code.
In fact, a 2010 survey by Israel's Ben-Gurion University of the Negev found that 85% Americans thought of tipping as a social norm while more than 60% did so to express gratitude.
While no such survey assessing Indians’ tipping pattern is available, it is clear that the culture of tipping remains either absent or patchy at best. Further, with the advent of food delivery aggregators, consumers believe that these platforms levy multiple additional charges like platform fees and delivery fees, leaving many to wonder if convenience has become too costly.
Incentivisation
Food services, comprising restaurants and now food delivery aggregators, receive much less tips compared to other industries like at-home repair and car servicing, according to Pranav Rungta, director of Simmering Foods, a chain of restaurants in Mumbai, Bengaluru, and Hyderabad.
“When a customer sees a food order bill, they think of it as the price of food plus service charge. In their minds, the total price should include service fee," Rungta said, adding that just about 5-7% of Simmering Foods’ customers pay over and above the bill amount.
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Eateries situated in metro cities already charge a service fee of up to 10% to reward servers for a job well done. Moreover, tips help incentivise workers (including gig workers) to join the food services industry, which is experiencing a severe workforce shortage after the covid-19 pandemic, Sujit Mehta, founder of restaurant consultancy We Serve toldMint.
“F&B (food and beverage) is a job that requires high passion and mostly doesn’t get credit where it is due. Tips can be rewarding in that sense. But, with prices rising, it’s understandable why customers don’t want to pay more," Mehta added.
Moreover, tipping is almost non-existent beyond the metro cities.
“Our internal data indicates that tips in tier-2 cities are less frequent and smaller compared to the metros. Over the years, we're seeing the culture of tipping to be evolving in India while trends indicate that it is still single-digit mostly," Rakesh Ranjan, chief executive of Zomato’s food delivery business, said in response to Mint’squeries.
Hidden costs
Over the last few months, users have pointed out that prices of food items on platforms like Swiggy and Zomato have been higher than restaurant rates.
“We already pay at least 20-30% more for online food orders. Shouldn’t the delivery charge be included in the bill?" asks Shilpa, a 30-year-old IT professional based in Bengaluru.
Since both Swiggy and Zomato cover delivery costs through their subscription programmes One and Gold, users in general are not in favour of paying additional charges towards tips.
For this reason, while most platforms enable users to pay tips to delivery partners via the app, the feature is unlikely to see much traction, according to Rungta.
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“Some customers also wonder if the tips are, in fact, reaching the delivery partners. Tipping online is a tall ask in a trust-deficit market like in India," he added.
There have been exceptions, though. On New Year’s Eve 2023, customers tipped as much as ₹97 lakh to over 3.2 lakh delivery partners across Zomato and its quick-service subsidiary Blinkit.
Grocery delivery platform Zepto sees its customers pay an average tip of ₹19 per order, while the maximum tip received till date has been ₹7,000, a spokesperson told Mint.
To be sure, both Swiggy and Zomato have clarified on various occasions that tips do reach delivery partners and restaurants on a weekly basis, in an attempt to build confidence among users, and encourage them to tip more often.
In September last year, Zomato introduced a feature on its platform to enable users to tip kitchen staff as a way to reward their hard work.
“With this feature, customers can tip the restaurant’s kitchen staff – the wonderful chefs, cleaning staff, helpers, etc. as a way of appreciation. This new feature will enrich the food ordering and delivery experience for both our restaurant partners and customers,"Zomato wrote in its blog post.
However, the feature was rolled back within a few months due to poor adoption, underscoring how catalysing a culture of tipping remains a tall order in India.
