Swiggy has increased its platform fee to Rs 15 per order to address higher operational costs and demand during the festive season. Zomato also raised its fee to Rs 12, causing consumer dissatisfaction.

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Swiggy Raises Platform Fee to Rs 15 Amid Festive Season Demand

Food delivery giant Swiggy has increased its platform fee to Rs 15 per order, marking the highest charge since the fee’s introduction. This move comes as the company grapples with higher demand during the festive season alongside escalating operational costs.

Platform Fee Evolution: From Rs 2 to Rs 15

The platform fee was initially introduced in April 2023 at a nominal Rs 2 per order. Since then, both Swiggy and its key competitor Zomato have steadily increased these charges, particularly on days with high order volumes. Swiggy briefly tested a Rs 14 fee on Independence Day before reverting temporarily to Rs 12. However, with order volumes climbing once again, Swiggy has pushed the platform fee higher to Rs 15.

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The platform fee is a separate charge and is distinct from delivery fees, GST, and restaurant commissions, aimed at helping the companies offset rising costs.

Zomato’s Platform Fee Adjustments

Rival foodtech firm Zomato has also increased its platform fee to Rs 12 per order. Earlier, in July 2024, Zomato extended a Rs 6 platform fee across major metro cities like Delhi, Mumbai, and Bengaluru. During last year’s festive season, the fee surged to Rs 10, described as a “festive platform fee.” Now, at Rs 12, the charge has fueled customer frustration online amid the price hikes.

Impact on Revenue and Order Volumes

Swiggy, handling over two million daily orders, stands to generate approximately Rs 3 crore daily in incremental revenue if the Rs 15 platform fee is sustained. This translates into an estimated Rs 216 crore annually. Zomato, processing between 2.3 to 2.5 million daily orders, could similarly earn around Rs 3 crore per day from its current fee level.

Financial Pressures Behind the Fee Increase

The food delivery companies face mounting pressure to boost profitability amid growing expenses across their operations. Swiggy reported a significant jump in net losses for the June quarter of 2024, with losses nearly doubling year-over-year to Rs 1,197 crore. This increase was attributed largely to continued investment in Instamart, Swiggy’s quick-commerce vertical. Despite the losses, operational revenue rose 54% year-on-year to Rs 4,961 crore in the same quarter.

Zomato has similarly leaned on platform fees and other revenue streams to navigate a competitive and cost-intensive landscape, especially during peak demand periods.

Customer Sentiment and Market Trends

The frequent fee hikes by Swiggy and Zomato have sparked online dissatisfaction among consumers, particularly as these charges are added on top of existing costs like delivery fees and taxes. Increasing platform fees is part of a broader trend among Indian internet companies that seek to improve revenue streams from a cost-sensitive consumer base without sacrificing order volumes.

Summary

Swiggy’s decision to raise its platform fee to Rs 15 per order during the festive season reflects the growing operational costs and heightened demand the company is navigating. Zomato’s fee hike to Rs 12 echoes this market-wide challenge. While these fees contribute significantly to their revenue—potentially adding crores daily—they have also triggered consumer frustration. As competition and demand intensify, such fee adjustments may become a norm in India’s dynamic foodtech and quick commerce industry.

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