Online food delivery platform, Zomato has announced a 25% increase in its platform fee for users. Effective immediately, customers will now be charged Rs 5 per order, marking a significant jump from the previous fee structure. The introduction of the platform fee by Zomato initially surfaced in August 2023, starting at a modest Rs 2 per order. However, the company swiftly increased the fee to Rs 3 just a couple of months later in October to become profitable and improve margins. It then increased to Rs 4 in January of this year.
This recent surge to Rs 5 marks the third increment within a relatively short timeframe. This platform fee applies to key markets including Delhi NCR, Bengaluru, Mumbai, Hyderabad, and Lucknow. On the other hand, Zomato’s quick-commerce platform Blinkit has implemented a handling charge of Rs 2 on each order.
Zomato is not alone in implementing such charges. Its competitor Swiggy, also imposes a platform fee on food delivery orders at a similar rate of Rs 5. Nonetheless, reports have emerged suggesting that certain Swiggy users may encounter a platform fee of Rs 10.
What is the platform fee and who will be affected by this change?
The platform fee is a flat charge per order that applies to all transactions on Zomato. In addition to this fee, Zomato also imposes a delivery charge, although this fee is waived for members of its Zomato Gold loyalty program. Zomato Gold is a paid membership program where customers make an upfront payment to access benefits such as discounts and free delivery. It’s worth noting that even Zomato Gold members are subject to the platform fee.
With this move, Zomato aims to bolster its earnings. With millions of orders processed daily, even a marginal increase in per-order charges could yield substantial gains for the company’s financial health.
Apart from the platform fee hike, Zomato has temporarily stopped its intercity delivery service due to legal issues. The service, Zomato’s Legends, was introduced in 2022 to transport food from specific restaurants in certain cities to others. In 2023, Zomato extended this service to deliver pre-stocked items from various cities in shorter timeframes.
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