Swiggy, Zomato increase platform fee to Rs 6 to improve profitability

Swiggy Group CEO Sriharsha Majety and his Zomato counterpart Deepinder Goyal.

Food-delivery majors Swiggy and Zomato have again gone for a platform fee hike. Customers now have to pay Rs 6 an order on both the apps, a 20 percent increase from Rs 5 earlier.

The fee, being charged in Bengaluru and Delhi to begin with, is different from delivery fee, goods and services tax, restaurant charges, handling charges and the like.

It is charged on all food orders, even if the customer is enrolled under the various loyalty/membership programmes the two companies have. The fee directly goes to the company, which helps control costs and shore up revenues.

The higher fee will likely be rolled out across the country gradually.

While an increase of Re 1 on each order may not be significant for customers, for Zomato, which delivers around 22-25 lakh orders daily, it is an additional income of Rs 25 a each day. In all, food-delivery companies are looking at additional income of Rs 1.25-1.5 crore a day just by levying a platform fee.

Swiggy was first to begin charging a platform fee of Rs 2 in April 2023, as reported by Moneycontrol. Zomato followed suit in August. Since then, the two rivals have been pushing up the fee, as customers seem willing to pay with no negative impact on order volumes.

During peak times, Zomato even collected Rs 9 per order as the platform fee. Swiggy has also tested Rs 10 for certain customers in Bengaluru, Delhi, Hyderabad and other cities, as reported earlier.

The hike comes despite Swiggy saying it has no plans to significantly increase the platform fee.

They would keep pushing up the fee and stop when there is customer push back and an impact on order volumes, analysts had said earlier.

Quick commerce is doing it too

Swiggy and Zomato have restricted the platform fee to food delivery and haven’t extended it to their quick commerce businesses Instamart and Blinkit, respectively.

As reported by Moneycontrol, Zepto, their competitor in the space, became the first rapid delivery startup in March this year to introduce a platform fee.

Zepto delivers around 5.5 lakh orders daily and a platform fee of Rs 2 translates to a tidy additional income of Rs 11 lakh a day.

Zepto is the only pure-play quick commerce company in the space as opposed to Swiggy and Zomato, which have their food delivery businesses to fall back on.