Amid the ongoing LPG crisis in India, there has been a sharp decline in orders on food delivery platforms Zomato and Swiggy. Due to the ongoing war between America, Israel and Iran, LPG supply has been affected, which has affected restaurants and cloud kitchens in many cities of the country. According to the ET report, delivery workers have also expressed concern as their daily orders have reduced significantly. Many restaurants are closed or working at reduced capacity, due to which delivery orders on platforms like Swiggy and Zomato have also declined sharply.
India’s food and beverage sector worth about $335 billion has also been affected by the LPG crisis that has increased due to the Iran war. Zomato’s parent company Eternal Ltd. in Mumbai trading. Shares of Swiggy Ltd. fell as much as 4.8%, while Swiggy Ltd. Shares reached their lowest ever level. Due to sharp decline in orders, investors sold these shares. It also affected fast-food companies, such as Jubilant FoodWorks, which runs Domino’s Pizza in India.
Impact on the earnings of delivery workers
According to the Gig and Platform Service Workers Union, whereas earlier many delivery workers used to fulfill around 30 orders daily, now they are getting only 5 to 10 orders. The union says that this is having a serious impact on the livelihood of gig workers. The union said that due to shortage of commercial LPG cylinders, restaurants, dhabas, cloud kitchens and street food vendors are reducing or closing their operations at many places. Due to this, food delivery orders on platforms like Zomato and Swiggy have decreased by 50 to 60%.
The union also said that many delivery workers are having trouble managing their families’ expenses due to the suddenly reduced income. If this situation continues, many gig workers may have to face problems like unemployment and debt.
Pressure on LPG supply in India
The pressure on India’s LPG supply has also increased, because the country imports more than half of its LPG requirement from West Asia. Due to the war between Israel, America and Iran, many important sea routes have been closed, including the Strait of Hormuz. Due to this, tankers are not able to reach Indian ports. Its biggest impact is on the hotel and restaurant sector. Industry organizations of Mumbai, Bengaluru and Chennai have warned that if the situation does not improve, about 50% of the restaurants may be closed in the coming days.
Government steps and increased prices
To deal with this crisis, the government has implemented the Essential Commodities Act, 1955 and has directed to give priority to domestic LPG supply. Due to this, the supply of commercial gas for restaurants and hotels has further reduced. On Saturday, the price of LPG cylinder increased by 7% to ₹ 913, which is the first increase in almost a year. The price of commercial gas was increased for the second time this month, which has increased the pressure on the already troubled food sector.