Zomato Starts New ‘Service Charge’ For Long Distance Deliveries

SUMMARY

Zomato has reportedly started charging a new “long distance service fee” for orders delivered beyond 4 km

The company will now charge its customers INR 15 for deliveries between 4 and 6 km radius if the order value is more than INR 150

The foodtech giant told its restaurant partners that total service fees, including this new distance charge, will not cross 30%

Foodtech major Zomato has reportedly started charging a new “long distance service fee” for orders delivered beyond 4 km.

An ET report, citing sources close to the matter, said that the company will now charge its customers INR 15 for deliveries between 4 and 6 km radius if the order value is more than INR 150. For orders beyond 6 km, the charge will be between INR 25 and 35 depending on the city.

Inc42 has reached out to Zomato for comments on the development. The story will be updated based on the response.

The report further said that the foodtech giant told its restaurant partners that total service fees, including this new distance charge, will not cross 30%, not counting other costs. But some restaurants say that their total commission fees could actually go as high as 45%.

As of 03:10 PM, shares of Zomato were trading 0.57% lower at INR 228.70 apiece on the BSE afternoon trade, compared to its last close of INR 230 per share.

The development comes weeks after the company reported its fourth quarter financial results, where its bottomline took a heavy hit due to surging competition in the market in the quick commerce space, as well as stubbornly high costs despite a strong topline performance.

Zomato parent Eternal’s consolidated profit after tax (PAT) plunged 77.8% to INR 39 Cr in Q4 FY25 from INR 175 Cr in the year-ago period, while its operating revenue zoomed 64% to INR 5,833 Cr in the quarter under review, from INR 3,562 Cr, a year ago.

It is understood that the Deepinder Goyal-led foodtech giant is taking measures of hiking charges, and revoking certain benefits from its restaurant partners and consumers to cushion its bottomline.

Recently, Zomato rolled out a key change to its Gold membership benefits, where it began charging an additional rain fee even for users subscribed to its Gold membership plan from May 16.

Previously, the company also hiked its platform fee four times in the past year alone, which currently stands at INR 10 per order.

On that note, the Competition Commission of India (CCI) ruled that platform fees, food prices and delivery charges levied by the foodtech major do not amount to unfair or discriminatory conduct, in April.