Chennai municipal corporation bans Zomato, Swiggy

Greater Chennai Corporation has ordered online food delivery platforms such as Zomato and Swiggy to shut operations in an effort to contain the spread of Covid-19 pandemic. 

The municipal body, however, has allowed ecommerce startups delivering staples and vegetables such as Grofers and BigBasket to operate.

We have given a clear notice that Dry rations, Vegetables and Groceries from local super market & E-commerce are ALLOWED to home deliver in #Chennai city. https://t.co/5TsntlX5AV

— Greater Chennai Corporation (@chennaicorp) March 26, 2020

The development was first reported by The Economic Times. Other states such as Chhattisgarh, Bihar and Assam have also banned operations of food delivery companies.     

Emails sent to Zomato and Swiggy were unanswered until publishing this report. This article will be updated when the companies respond.

“We are working through teething issues due to the lock-down with active support from central & state governments and leaders,” Zomato founder Deepinder Goyal in a tweet. He also added that Delhi, Maharashtra and Karnataka state governments have directed local authorities to let ecommerce operate.

Read: Gig economy comes to near standstill as Covid-19 pandemic accelerates in India

On Tuesday, Prime Minister Narendra Modi announced a 21-day nationwide lockdown to reduce the spread of Covid-19. Online delivery services across segments have been affected due to supply shortage and precautionary actions from local authorities and police forces. 

Major players including Swiggy, Zomato and Freshmenu faced a drop in gross merchandise value by about 20% in the first fortnight of March. According to consulting firm RedSeer, food delivery startups are functioning at around 30% capacity.

The pandemic has hit several sectors in the startup space but a few firms have kept services running. Online grocery delivery services have restarted deliveries in select cities after a brief pause.