Zomato, Swiggy increases platform fee to Rs 6 in Delhi, Mumbai, Bengaluru

Food delivery giants Zomato and Swiggy have increased their platform fees by 20%, from Rs 5 to Rs 6 per order, in Delhi NCR, Mumbai, and Bengaluru.

While Zomato is already profitable, the increase in platform fees will help Swiggy improve its profitability goals, especially as it targets an IPO launch soon.

It's worth noting that the 'platform fee' is separate from other charges, such as delivery fees, goods and services tax (GST), and restaurant charges.

A crucial part for delivery companies 

Platform fees are crucial for delivery companies like Zomato and Swiggy to boost their revenues and profitability. Both companies have been experimenting with these fees since their introduction last year at Rs 2 per order. 

The companies have gradually increased the fee, which reflects their need to enhance take rates amidst a competitive market.

It is also a strategic move to counterbalance difficulties in increasing restaurant commissions without causing friction.

The impact of platform fee hike

The increased platform fees are charged on all food orders, even for customers subscribed to various loyalty programs. Despite the nominal increase of Re 1 per order, the cumulative impact is significant.

For instance, Zomato, which handles approximately 22-25 lakh orders daily, gains an additional income of Rs 25 lakh each day from this hike. Collectively, both companies are looking at an additional income of Rs 1.25-1.5 crore daily from these fees.

Are these fees limited to food delivery?

Currently, the platform fee is restricted to food delivery services and has not been extended to the quick commerce arms of these companies, such as Zomato's Blinkit and Swiggy's Instamart. These quick commerce services charge handling fees instead.

For example: In Bengaluru, Blinkit charges Rs 4 per order, while Instamart levies Rs 5 per order, inclusive of GST. In Delhi, Blinkit charges Rs 16, while Swiggy Instamart charges Rs 5.

Another quick commerce major Zepto, which focuses solely on quick commerce, charges a handling fee of Rs 9.99 on every order.

Netizens reaction 

Several users took to X to share their reactions to the latest hike. "Haha jugalbandi :) continue!!!" a user wrote.

"What do the consumer,vendor and delivery partner gets in return?" another asked.

"Swiggy gets 30% from resturants also they have a mark up on the food. No they are just looting. We stopped ordering," a third criticised.

"I significantly reduced online ordering in last 6-12 months," a fourth added.