 "Zomato, Swiggy platform fee hike: Why your online food delivery will cost more")
The two major food delivery services in India, Zomato and Swiggy, have once again hiked their platform fees.
Customers who buy food from these platforms will now have to pay an additional 20 per cent as a result of the raise.
Here’s all we know about it.
The hike in platform fee
Initially introduced in Delhi and Bengaluru, the platform fee of Rs 6 will be charged for every food order, regardless of whether customers have enrolled in membership plans on both platforms.
These apps may charge up to Rs 9 for each order during peak hours, according to Mint.
There are plans to expand the increased platform charge to further cities.
For the rapid commerce businesses Blinkit and Instamart, the companies have not made these changes.
In Bengaluru, Swiggy first experimented with a platform fee of Rs 7, which it eventually reduced to Rs 6, the report said.
In April 2023, the food delivery app implemented a platform fee of Rs 2, and Zomato followed the same in August of the same year.
Last year, Zomato had pushed up the platform fee to Rs 3 finally helping it gain profitability.
In April this year, Zomato had already hiked its platform fee by 25 per cent to Rs 5 per order.
Impact Shorts
More ShortsImpact on customers
The platform fee is not the same as the delivery fee, handling fee, goods and services tax (GST), or restaurant fees.
The fee contributes directly to the revenue and cost management efforts within the companies.
It is one of the supply chain channels directly under the companies’ control.
The action is being taken as the two largest meal delivery companies attempt to increase total revenue and profitability by further enhancing their unit economies.
Because there is a cap on the amount of commissions these firms can charge restaurants, the platform fee also becomes a crucial tool for these businesses, explained Indian Express.
Currently, the commission varies from between 25-35 per cent depending on the restaurant, and this has been a major point of contention between them and the food delivery companies.
The rising food services market
The change in platform fees will produce a large gain in revenue for both companies, even though customers will have to pay more. This is because both companies distribute approximately 20–25 lakh orders daily.
By charging a platform fee, food delivery services want to make between Rs. 1.25 and Rs. 1.5 crore every day.
One day after the food delivery aggregator announced it was raising its platform charge to Rs 6 from Rs 5, Zomato’s share price jumped over four per cent and reached a 52-week high on Monday.
A recent report released in July by Bain estimates that over the next seven years, the food services market in India will grow at a rate of 10–12 per cent annually, with an average spend per order rising to Rs 230–250 from Rs 220-240.
With inputs from agencies
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
 "Russian drones over Poland: Trump’s tepid reaction a wake-up call for Nato?")
 "As Russia pushes east, Ukraine faces mounting pressure to defend its heartland")
 "Why Mossad was not on board with Israel’s strike on Hamas in Qatar")
 "Turkey: Erdogan's police arrest opposition mayor Hasan Mutlu, dozens officials in corruption probe")
