Food Deliveries To Get Costlier As Zomato, Swiggy Hike Platform Fee By 20%
Food delivery giants Zomato and Swiggy hike platform fees by 20% in key cities to increase their earnings.
Image Credits- The Economic Times
Food delivery giants Zomato and Swiggy have hiked their platform fees, which can lead to costlier deliveries. Fees have hiked from ₹5 to ₹6, which is a 20 % increase.
This change, currently in effect in Bengaluru and Delhi, applies to all orders, including those of customers enrolled in loyalty or membership programs.
The increased fee is separate from other charges such as delivery fees, goods and services tax, restaurant charges, and handling fees.
Earlier in April, Zomato raised its platform fee by 25%, moving from ₹4 to ₹5 per order. To strengthen profit margins, Zomato introduced ₹2 platform fees in August of the previous year, which subsequently increased to ₹3.
Due to this, Zomato shares hit an all-time high of ₹232 on the Bombay Stock Exchange, making founder and CEO Deepinder Goyal, a billionaire. The company has also seen a year-long rally, primarily due to the growth of its quick commerce subsidiary, Blinkit.
The Fee hike is expected to boost the daily revenue-
For Zomato, which processes approximately 22-25 lakh orders daily, the increase could result in an additional income of ₹25 lakh each day.
Overall, food delivery companies could see an additional income of ₹1.25-1.5 crore a day from the platform fee alone considering the revised platform fee of ₹6.
The decision to raise platform fees aims to manage operational costs effectively and boost overall revenues. Plans are underway to extend this increment to other cities nationwide shortly. Customers express dissatisfaction over rising costs which leads to reduce the ordering of foods on the app.
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