India’s food delivery sector must simplify costs and improve restaurant margins to bring more independent kitchens onto delivery platforms sustainably, writes Aravind Sanka, Head, Ownly
Food delivery in India was never supposed to be complicated. It started as a straightforward promise to get the food you want, from the place you love, without leaving your home. For a country with the kind of culinary depth we have, the idea was almost self-evidently good. And for a while, the simplicity of that promise drove remarkable growth.
Today, operating a restaurant on food delivery platforms has become something many owners actively have to think through. They cross-check commissions, factor in rising input costs, decode margins, and calculate whether the final payout actually makes sense. For those of us who have been part of this ecosystem for years, this mental exercise has become second nature. We barely notice it anymore. But for the hundreds of thousands of restaurants still trying to make delivery work sustainably for their business, this complexity is a real barrier.
That is a problem worth solving.
The Gap Between What Restaurants Earn And what It Costs To Operate
Ask any restaurant owner who regularly sells on food delivery platforms and they will tell you the same thing: what a dish costs to make is rarely reflected in what is left after the order is fulfilled. By the time commissions, packaging, and rising ingredient and operating costs are added, a meal that seemed reasonably priced can leave a wafer-thin margin, if any. There is no single moment of shock, just a quiet accumulation of costs that makes the final payout feel disconnected from the effort that went into the order.
This cost gap is particularly costly for smaller restaurants. When rising input costs are compounded by high commissions, it does not build confidence in the channel. It builds hesitation. And hesitation, compounded across enough restaurants, slows the growth of an entire category that should, by now, be far more sustainable than it is.
Why Profitability Is The Next Challenge
The pressure is not limited to commissions alone. Rising input costs carry a weight of their own. Commission structures across food delivery platforms can range anywhere from 22 to 35 per cent per order. For large chains with the volume to absorb those costs, this is manageable – something to be factored into pricing strategy and marketing budgets. But for the neighbourhood kitchen around the corner, the regional specialist who has been feeding the same community for twenty years, or the independent operator who makes something genuinely worth discovering, this model often means participation is not viable. Not without raising prices. Not without compromising on what makes their food worth ordering in the first place.
The consequence is a food delivery ecosystem that has grown quickly but not broadly. A large number of India’s best kitchens are still offline, not because they lack the product, but because the terms of entry are not designed with them in mind.
A Simpler Principle For Sustainable Margins
What food delivery needs to return to is not a technological leap. It is a more honest principle: what a restaurant earns should reflect what it actually costs to run the business. Every time.
When restaurants are not required to inflate their online menus to recover commission costs, menu prices can stay true to what the restaurant actually charges. When rising input costs are not compounded by layers of platform charges, restaurants can plan with confidence rather than calculation. Running a kitchen stops being something you navigate around and starts being something you can sustain instinctively. This is the way it should have always been.
When pricing is transparent and participation is accessible from day one, more kitchens can join the ecosystem, grow within it, and sustain themselves without altering how they cook, how they price, or how they serve. The network becomes more diverse. The experience becomes more honest. And trust compounds across the system over time.
The Next Phase Of Profitability
India’s food delivery market still has enormous room to grow, projected to reach over Rs 2 lakh crore by 2030 at a CAGR of roughly 18-20 per cent. But the next phase of this growth will not come from more features, more tiers, or more complexity. It will come from making the model simpler and more sustainable for the restaurants that have not yet been able to make it work.
The category has spent years building infrastructure. It is time to build confidence – in the margins, in the model, and in the platforms that carry it forward.
The simplest things are often the hardest to get right. But they are also the ones that matter most.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.
About Author
Aravind Sanka is the Head of Ownly, a quick-commerce and retail-focused business. He is also a co-founder of Rapido.
