Zomato Hikes Platform Fee To INR 4 Per Order Across Major Cities

Listed food delivery platform Zomato has increased the platform fee to INR 4 per order across key markets from INR 3, according to information on its app.

The new rates are effective from January 1.

According to sources cited in an ET report, New Year’s Eve saw platform fees temporarily upped to as high as INR 9 per order in certain markets.

“These are business calls which we take basis various factors from time to time,” a Zomato spokesperson was cited by ET as saying on the platform fee hike.

Incidentally, Sunday (December 31) was also when Zomato saw its order volume during New Year’s Eve shoot up to all-time high levels. Taking to X, CEO Deepinder Goyal noted that the number was bigger than the combined number of orders the food delivery platform had clocked for New Year’s Eve over the past six years.

Platform Fee Driving Revenue In Food Delivery

Zomato started charging a platform fee on orders on its platform in August last year, starting with INR 2 and increasing to INR 3 across major markets. Zomato’s closest rival Swiggy began charging an INR 2 fee as well, which was later hiked to INR 3.

The two platforms are charging a platform fee beyond the delivery charge, which is waived for customers of their respective loyalty programmes. The platform fee, however, applies to Zomato Gold and Swiggy One members as well.

Incidentally, Zomato’s quick commerce arm Blinkit also charges an INR 2 platform fee per order.

While it might not be a popular decision among users, platform fees have improved the revenues of food delivery startups. For instance, in its July-September quarterly results, Zomato attributed an improvement in the percentage of what it makes (also called a take rate) on each food delivery order to the platform fee.

According to a November research note by Jefferies, Zomato’s take rate in the September quarter of FY24 was 24.1%, improving 28 basis points (0.28 percentage points) from a year earlier and 32 basis points from the previous three-month period.

Platform fee is also being talked about as a major factor in Zomato turning its fortunes around and becoming profitable over the past two quarters. It reported a profit after tax of INR 36 Cr during the quarter ended September 30, 2023. In the April-June quarter, it had reported a net profit of INR 2 Cr.

Shares of the foodtech giant ended trading 0.7% higher at INR 124.50 on the BSE on Monday (January 1).

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.