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Zomato and Swiggy Increase Platform Fees, Impacting Food Delivery Costs

Food delivery giants Zomato and Swiggy have recently raised platform fees in key markets like Delhi and Bengaluru, signaling potential costlier food deliveries for consumers. The platform fees have been hiked from ₹5 to ₹6 per order, marking a 20% increase as the near duopoly aims to bolster their earnings.

Details of the Platform Fee Hike

Swiggy in Bengaluru initially teased a ₹7 platform fee but applied a discounted rate of ₹6 during checkout, while Zomato has introduced a Priority Fee option for faster deliveries.

Financial Impact of the Fee Hike

With Zomato processing around 2.2-2.5 million orders daily, estimates suggest the fee hike could translate to an additional profit of ₹25 lakh per day. Reports indicate both companies anticipate daily revenues between ₹1.25 crore to ₹1.5 crore due to these adjustments.

History and Evolution of Platform Fees

Zomato and Swiggy commenced charging platform fees just last year, starting at ₹2 per order and incrementally increasing to ₹5 in major markets such as Delhi-NCR, Bengaluru, Mumbai, Hyderabad, and Lucknow.

Market Response and Company Performance

Following the fee hike, Zomato’s shares soared to an all-time high of ₹232 on the Bombay Stock Exchange, propelling founder and CEO Deepinder Goyal into billionaire status. The company’s growth has been driven significantly by its quick commerce subsidiary, Blinkit.

Comparison with Quick Commerce Giants

Quick commerce players like Zomato’s Blinkit and Swiggy’s Instamart also charge platform fees, termed as ‘handling charges’. In Bengaluru, Blinkit charges ₹4 per order, whereas Instamart charges ₹5. In Delhi, Blinkit’s charges escalate to ₹16 per order, while Instamart maintains a ₹5 fee, according to a report by the Times of India.

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