Zomato, Swiggy hike platform fee by 20% to Rs 6 per order

Zomato and Swiggy have raised platform fee to Rs 6 per order, in a move aimed at boosting revenues.

The move marks a 20 per cent hike from the earlier platform fee of Rs 5 for the two companies that dominate India’s online food delivery business. Delhi and Bengaluru were the first cities where platform fee was introduced. Platform fee adds directly to the revenues of the companies, and the move is clearly aimed at increasing profits.

Platform fee is the amount per order that companies such as Zomato and Swiggy charge their customers for using the particular platform, be it on app or website. The fee is not a part of GST, delivery charge, restaurant fee or any other outlay that may be incurred by the customer as part of the order. Companies such as Swiggy and Zomato charge a platform fee on orders even from customers who are a part of their loyalty schemes.

A one-rupee raise would seem like a minuscule hike in platform fee per order, but it lets these delivery platforms make a huge profit. Zomato, for instance, delivers nearly 25 lakh orders every day, according to a Business Standard report, and this in turn means the company stands to garner extra income worth Rs 25 lakh on a daily basis on the same number of orders.

The concept of platform fee was launched by Swiggy last year. In April 2023, Swiggy launched a Rs 2 platform fee in every order. Zomato introduced the concept soon enough, in August the same year.

Subsequently, Zomato raised platform fee to as high as Rs 9 per order during busy hours of delivery, prompting Swiggy to experiment with a steep amount of Rs 10 as platform fee in select cities such as Delhi, Bengaluru and Hyderabad.

Zomato and Swiggy are currently imposing a platform fee only on their food delivery service and are yet to introduce the charge on their respective quick commerce companies Blinkit and Instamart.