Platform fee helps cushion food delivery discounts on Swiggy

Companies like Rapido and Zomato made food delivery more affordable largely by lowering the threshold for free deliveries.

The competitive intensity in the food delivery market has increased as players like Rapido entered the field with more affordable options, Swiggy’s management said while announcing Q2FY26 results on October 30.

Both existing players, Swiggy and Zomato and new competition, like Rapido, are all "striving to create an opening in what is a thin-margin, high-visibility, and operations intensive business,” the company’s management said.

“In response, we tweaked our own proposition for Swiggy One on a targeted basis, to ensure no short-term loss of users or orders. As a result of this, the extent of subsidised deliveries through Swiggy One went up even further, the impact of which was balanced by the hike in platform fee,” the management added.

Companies like Rapido and Zomato made food delivery more affordable largely by lowering the threshold for free deliveries.

At the same time, companies like Swiggy and Zomato have been increasing the platform fee for over two years to make each order more profitable.

In September this year, Swiggy increased its platform fee for the third time in the last three weeks to Rs 15 per order, marking its steepest hike yet as it looks to ride the surge in demand during the festive season and shore up its bottom line.

The move comes weeks after Swiggy had briefly raised the fee to Rs 14 on Independence Day, before settling back at Rs 12. Now, with order volumes peaking again, the Bengaluru-based firm has pushed the levy to Rs 15.

The platform fee is an additional charge levied by both Zomato and Swiggy on every order, over and above other line items such as delivery charges, GST, and restaurant fees. Notably, the fee is not uniform across cities and days, and often varies based on demand levels.

Swiggy's hike follows that of rival Zomato, which has also raised its platform fee to Rs 12 to capitalize on the festival season rush.

At Swiggy’s present order volumes — estimated at over 2 million orders per day — the higher fee translates to up to Rs 3 crore in daily revenue, compared to around Rs 2.4 crore when the fee was at Rs 12. That’s an additional Rs 54 crore per quarter and Rs 216 crore annually if the rate sustains.

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Swiggy has been toying with affordable food delivery options, by launching Toing and the Rs 99 store.

Swiggy said its take rates (commissions)went up 10 basis points quarter on quarter to 25.8 percent led mainly by growth in advertising. The company continued to grow in the guided 17-20 percent range and saw its gross order value (GOV) increase to a record high of Rs 8,542 crore in Q2FY26 from  Rs 7,191 crore in Q2FY25.