Is It Time Swiggy, Zomato Rethought The Platform Fee Push?

There’s nothing new in platform fees so far as the Indian food delivery story goes. Some 18 months and an over seven-fold surge later, what’s new is it’s time to look inside the blueprint more critically to comprehend if the monetisation gameplan would play out even in the long run or not. 

Food delivery giants have tried out various diversification strategies over the years. Some bets paid off, while some failed. The quick commerce ventures – Swiggy’s Instamart and Zomato’s Blinkit – turned out to be the biggest game-changers for the two listed Goliaths – Swiggy, commanding a market valuation of around INR 1 Lakh Cr, and Zomato parent Eternal, which is hovering on INR 3 Lakh Cr. 

The 10-minute delivery format helped the companies bump up their revenues, but what improved the unit economics for their core food delivery business was platform fees. 

First introduced in 2023 at a nominal INR 2, the platform fee has climbed steadily to INR 15. Swiggy took the freedom of raising it to INR 14 on orders placed on the Independence Day to cash in on the surge and later raised it further to INR 15. Zomato too increased its platform fee to INR 12 during Ganesh Chaturthi in Mumbai and made it pan-India later on.

This was not the first time. Both the companies had raised platform fees ahead of the festive season last year as well. Analysts believe such hikes would continue to return. 

What about the longer term? Will it be a sustainable revenue strategy?  

Food Delivery’s Flat Trajectory

Despite more than seven times hike in platform fees, order volumes continued to grow, suggesting that urban Indian consumers have tolerated the incremental costs so far. 

In Q1 of FY26, Zomato reported an adjusted revenue of INR 2,657 Cr, compared to Swiggy’s INR 2,080 Cr, while the gross order value stood at INR 10,769 Cr and INR 8,086 Cr. Zomato had 2.3 Cr average monthly transacting users, as against 1.6 Cr for Swiggy.

Since last year, though, the growth in the food delivery business seems to have slowed down, with sequential revenues staying largely flat. 

“There has been a slight slowdown in the number of transacting customers and the number of app downloads that we’re seeing. Year-on-year, some of that growth has been impacted, and we’ve talked about it over the last couple of quarters,” Zomato said in a post-earnings conference call after the June quarter of FY26. 

Similar voices echoed in Swiggy, too, though Rohit Kapoor, the chief executive of the food delivery business, played it down, citing seasonality. “This happens every Q1. If you look at last Q1 also, it had a similar impact,” he said. “We expect this to correct back and we’ll continue to stay on our guidance for a 5% EBITDA margin in the medium-term.”

Both giants went into a major course correction recently by calling off their non-core ventures. Their margins took a hit as the companies battled with a steadily growing order volume and the mounting cost of matching pace with India’s $5.38 Bn quick commerce market that’s zooming at 15.54% to reach $11.08 Bn by 2030.

“Quick commerce has definitely been a headwind to some extent for the food delivery business because some of that consumption has also moved to quick commerce. But, from an inflation standpoint and an opportunity standpoint, we still do think that in the long term, the business can grow at 20%, although that visibility is not there in the near term at this point,” said Zomato CFO Akshant Goyal.

“But there’s enough going for us to be excited about the business. If we do well and we are able to innovate and unlock more use cases for food delivery on the app, then we can get 20% growth levels again.”

As the industry run into a rough patch, platform fees came up as a lever to jack up the business for the food delivery platforms. But, as they try to monetise platform fees, the risk of a consumer pushback looms larger. Repeated fee hikes may also erode customer loyalty, especially in India’s largely price-sensitive market, and veer users to alternatives such as eating out, cloud kitchens with direct ordering channels, or various emerging platforms like ONDC and Rapido that are experimenting with discounts, according to foodtech industry analysts.

For partner restaurants, too, repeated hikes in platform fees may prove to be challenging. Higher customer-facing charges may alter ordering patterns, affecting volumes and potentially fuelling resistance from an ecosystem grappling with shrinking margins. 

Has platform fee turned into a crucial monetisation tool? Certainly it has, given the sheer volume of orders and a steady rise in discretionary spending in a youth-dominated, $2.4 Tn consumer market in India. 

Zomato mopped up INR 89 Cr in Q1 of FY26 from platform fees in the food delivery business and included it in its revenue, while Swiggy earned INR 109 Cr in the same quarter, though it doesn’t use the term, instead, calls it “additional fees from customers”. Swiggy, however, did not give a breakup of earning from food delivery and quick commerce.

This is the time to pause and probe the efficacy of platform fees for the long run.  

Inside The Monetisation Gameplan  

The pivot to platform fees is age-old. Travel aggregators, movie-ticketing platforms, and even airlines have long relied on ‘convenience fees’ to balance out unit economics when topline growth staggered. Food delivery players merely toed the line.

Even raising the fees isn’t new. These fees have increased across sectors over the years. In the food delivery space, it’s all the more crucial, given the ongoing instability in growth. 

“Delivery volumes have plateaued in top metros and commissions from restaurants are already maxed out at 30-35%. The only lever left is the customer,” pointed out Satish Meena, who founded market research and forecasting platform Datum Intelligence, during an interaction with Inc42. “It’s a classic squeeze strategy to test how much consumers are willing to pay for convenience before a churn sets in.”

Despite repeated hikes in platform fees, there’s no visible dent in demand. In fact, order volumes grew 9% for Swiggy and 13% for Zomato in FY25. Analysts suggest that this stickiness helps the platforms to test consumer price elasticity more aggressively.

Platform fee hikes in festive seasons boost revenues and indirectly improve profitability. For example, part of the incremental income helps subsidise delivery partner incentives during the peak periods, fund marketing campaigns, or optimise cloud kitchen operations. All these can improve unit economics without adding any visible cost to the customer.

This approach effectively decouples revenue growth from volume growth. “For every INR 1 increase in platform fee, Swiggy sees 20 basis points rise in income, which translates into significant annualised EBITDA gains even without additional orders. Zomato enjoys a slightly higher margin impact per rupee due to its larger order base, illustrating how fee monetisation complements operational scale,” Karan Taurani, senior vice-president at brokerage firm Elara Capital, said.

Raging War On Multiple Fronts

How much is too much? One wonders looking at the pattern in platform fee hikes. With the average order value hovering at INR 500–600, it is unlikely that the platform fees can sustainably climb much beyond the current levels. 

“At some point, an INR 30-35 charge starts to feel punitive. Customers may not drop off immediately, but it will leave a bitter taste and impact repeat frequency,” Meena said.

Beyond fees, both Swiggy and Zomato are trying out their efficiency levers by optimising delivery routes, investing in cloud kitchens, and even Swiggy testing 10-minute deliveries to spur demand. If they click, such moves may reduce reliance on platform fees.

The duopoly is being threatened with the entry of challengers like Rapido Ownly, which are undercutting both customer charges and restaurant commissions and testing alternative pricing models to target cost-sensitive users who are more reactive to platform fees. With the overall market not expanding in sync, the incumbents risk cannibalising user loyalty by over-indexing on fees.

Rapido has launched its food delivery services in some pockets of Bengaluru. What could further strengthen its position is its proprietary delivery fleet and a sizeable base of over 30 Mn monthly transacting customers.

The government-backed ONDC, too, revived itself for a Rapido ride to spice up the food delivery business. While the new entrants operate at a smaller scale, their entry signals a potential elasticity pressure point: if consumers perceive Swiggy or Zomato as overtly expensive, even minor fee hikes could redirect orders, particularly among price-conscious segments.

“Indian consumers are highly price-conscious. Even small, recurring surcharges on everyday services – be it food delivery or ecommerce, or ride-hailing – can alter the consumption pattern,” a Mumbai-based food delivery analyst said, refusing to be identified as he was not authorised to interact with the media. “The platforms need to balance margin expansion with perceived value. Otherwise, there is a risk of latent churn that doesn’t reflect immediately in volumes, but affects lifetime value over time.” 

The problem is more complex in Tier-I markets that make up the most of the food delivery volumes. Growth has plateaued with sluggish customer acquisition and no spike in order frequency from existing users. This means platform fees can only generate limited additional money. Unlike early-stage markets where fees could be offset by high user growth, the current duopoly operates in a saturated, low-growth environment, making consumer acceptance crucial for sustaining profitability.

For Biggies, It’s Walking The Tightrope

The relationship between the two major delivery aggregators and their partner restaurants cannot be overlooked for too long. The restaurants need to cough up significant commissions on orders, often around 15–25% of the order value, and the addition of advertising fees further increases their cost of doing business, particularly when combined with mandatory spends to maintain visibility on the platforms.

“The cumulative effect of higher commissions,  costlier advertising, and steeper platform fees leaves little room for further pressure without risking pushback from restaurant partners,” Meena said. Sustained fee hikes could strain long-standing relationships, prompting partners to explore alternative channels such as cloud kitchens, direct online ordering, or rival platforms offering lower commission structures.

Any further attempts to raise fees on the restaurant side could also draw the attention of industry bodies like the National Restaurant Association of India (NRAI). Earlier this year, the NRAI moved the Delhi High Court, challenging its exclusion from the confidentiality ring in the Competition Commission of India’s antitrust probe into Zomato, highlighting the regulatory sensitivity around platform-restaurant dynamics.

Zomato is reportedly weighing a relaxation of its commission models and is said to be in talks with stakeholders to reduce commission rates and long-distance fees. The company, however, declined this later.

For now, the most viable lever for Swiggy and Zomato appears to be customer-facing platform fees. Balancing profitability with the health of the ecosystem remains critical, as overtly aggressive monetisation may undermine the very network that sustains their growth.

Finding The Fee Balance  

There is no doubt that the food delivery sector is gradually witnessing a shift from the duopoly that Swiggy and Zomato enjoyed until now. New entrants like Rapido are also intensifying competition by offering lower commissions and discounted delivery fees. 

Such moves impact the pricing power of established players, forcing them to weigh the benefits of higher platform fees against potential customer churn and partner pushback.

“On the other hand, operational costs remain a constraint. Faster delivery models, impulse products, subscriptions, and cloud kitchens can drive engagement, but add significant expenses. Regulatory oversight and industry scrutiny, including commission caps and interventions by associations like NRAI, further limit the scope for increasing fees on the restaurant side, leaving customer-facing platform fees as the main monetisation lever,” Meena said.

As a result, platform fees are no longer just a marginal add-on, they are central to the revenue strategy of both Swiggy and Zomato. How effectively these companies manage fee levels, without eroding loyalty or straining restaurant partnerships, will be key to maintaining profitability in an increasingly competitive and cost-conscious market.

[Edited by Kumar Chatterjee]