Swiggy, Zomato increase platform fee to Rs 6 per order for revenue boost

Initially introduced in Bengaluru and Delhi, the fee implemented by Swiggy and Zomato is distinct from delivery charges, GST, restaurant fees, and other expenses associated with orders

Food-delivery majors Swiggy and Zomato have implemented a platform fee hike, raising the charge per order to Rs 6 from the previous Rs 5, marking a 20 per cent increase.

Initially introduced in Bengaluru and Delhi, this fee is distinct from delivery charges, GST, restaurant fees, and other expenses associated with orders. This fee applies universally to all food orders, irrespective of customer enrollment in loyalty programmes offered by both platforms. It directly contributes to the companies’ revenue streams and cost management efforts.

The expanded fee structure is expected to gradually extend nationwide.

‘Minor’ fee hike for ‘major’ profit

Although a Re 1 increase per order may seem minor to consumers, for Zomato, handling around 2.2-2.5 million daily orders, it translates to an additional daily income of Rs 25 lakh. Consequently, food delivery companies expect a daily revenue boost of Rs 1.25-Rs1.5 crore through this platform fee adjustment.

Swiggy introduced a platform fee of Rs 2 in April 2023, leading Zomato to follow suit in August of the same year. Since then, both companies have incrementally raised this fee, finding that customers are willing to accept the increase without seeing a drop in order volumes.

Awaiting customer backlash?

During peak hours, Zomato even raised its platform fee to Rs 9 per order, while Swiggy experimented with charging Rs 10 to specific customers in Bengaluru, Delhi, Hyderabad, and other cities.

Despite earlier statements from Swiggy indicating no plans for a significant increase in the platform fee, experts suggested that both companies would continue to raise prices until they encountered resistance from customers resulting in reduced order volumes, according to a report by Moneycontrol.

Platform fees in quick commerce

Swiggy and Zomato have implemented platform fees exclusively for their food delivery services and have not extended these fees to their quick commerce ventures such as Instamart and Blinkit.
 

Meanwhile, Zepto became the first rapid delivery startup in March this year to introduce a platform fee. Zepto handles around 550,000 orders daily, generating an additional daily income of Rs 11 lakh from a platform fee of Rs 2 per order.

Unlike Swiggy and Zomato, which can rely on their established food delivery operations, Zepto focuses solely on quick commerce, making it the only pure-play company in this sector.