Swiggy and Zomato Hike Platform Fee to ₹6, Aiming for Higher Profits

Swiggy and Zomato have both increased their platform fees to ₹6 per order in an effort to boost profitability. This marks a 20% hike from the previous ₹5 fee and is being initially implemented in Bengaluru and Delhi. The platform fee is separate from delivery fees, taxes, restaurant charges, and handling fees.

This fee applies to all food orders, including those made by customers who are part of loyalty or membership programs, and the revenue generated from this fee goes directly to the companies, aiding in cost control and revenue enhancement. It is expected that the higher fee will gradually be applied nationwide.

For Zomato, which handles approximately 22-25 lakh orders daily, the additional ₹1 per order results in an extra income of ₹22-25 lakh each day. Combined, food delivery companies could see an additional daily income of ₹1.25-1.5 crore from the platform fee alone.

Swiggy first introduced a platform fee of ₹2 in April 2023, followed by Zomato in August. Since then, both companies have incrementally raised the fee, with no apparent negative impact on order volumes. At peak times, Zomato has charged as much as ₹9 per order, and Swiggy has tested a ₹10 fee for some customers in Bengaluru, Delhi, Hyderabad, and other cities.

Despite Swiggy's earlier statements that it had no plans for a significant increase in the platform fee, the hike suggests that both companies will continue to raise fees until they observe customer resistance and a resultant drop in order volumes, according to analysts.

Currently, Swiggy and Zomato have limited the platform fee to their food delivery services and have not extended it to their quick commerce businesses, Instamart and Blinkit, respectively. However, Zepto, a competitor in the rapid delivery sector, introduced a platform fee in March 2023. Delivering around 5.5 lakh orders daily, Zepto's ₹2 platform fee generates an additional ₹11 lakh in daily income. Unlike Swiggy and Zomato, Zepto operates exclusively in the quick commerce space without a food delivery business to support it.