Without much fanfare, Google has started, from Thursday, April 13, a hyper-local app Google Areo which will do the aggregating work for food delivery start-ups. Many of these start-ups have been struggling to stay afloat and there has been a drop in the VC funding also, of late, for these firms. Under the circumstances, Google’s entry into this segment could come as a breather for many of them.
Limited Geography and Limited Scope to Begin With
Googe Areo’s footprint will be available only in Mumbai and Bengaluru for the time being. The tech giant will not depute its representative out. That will have to be taken care of by the individual firms which sign up; Google will book the orders and convey to these agencies, which will then take over and deal with the delivery and the other issues related to it. For handling the front end in booking the orders, Google gets paid a commission.
Besides the food delivery companies, the Google Areo platform will accommodate a facility for ordering routine household utilities related work also, like plumbing or cleaning or other such services.
According to this report, food companies like Box8, Freshmenu and Faaso and home services firms such as UrbanClap and Zimmber are said to have already signed up for availing Google Areo.
The report quotes a Google spokesperson as saying:
“We are constantly experimenting with ways to better serve our users in India. In this case, Areo makes everyday chores and ordering food easier by bringing together useful local services like ordering food or hiring a cleaner in one place”.
It appears Google has been working on this project for a few months and has done a pilot run among its employees for 3 months before releasing the app for public use. The basic idea behind this aggregation of services should prove to be a win-win for both Google and the startups. The way it works is Google already has a platform like Play Store and the search feature also is its own. Moreover, Google has previous experience with working in sectors like travel and weather where it has integrated in-house assets to develop new lines of activity. For the start-ups, this may come as a big relief. While they will have to continue to bear the cost of deliveries, the cost of order acquisition is left to Google and the fee payable for this may be worth the business being generated.
The report refers to similar attempts be Facebook has such a hyper-local services delivery window for Indian subscribers.
Another factor immediately related to this development is the way the dedicated food aggregators and delivery firms like Zamato and Swiggy get impacted, particularly if the major restaurants affiliated with them jump ship and sign up on Google Areo.
It might still be early days to draw conclusions.