Eternal-owned food delivery giant Zomato has increased its platform fee to ₹12 per order, up from the earlier ₹10. The decision comes in the run-up to the festive season, when demand for online food delivery is expected to peak.

The adjustment follows a similar move by competitor Swiggy, which recently raised its platform fee to ₹14 — inclusive of GST — in select pin codes. Industry insiders suggest that the increase by both platforms is temporary and could be rolled back once demand stabilises.

Rising costs and quick commerce bets

The platform fee hike reflects growing pressure on food delivery firms to balance high operating costs with profitability targets.

In the April–June quarter, Zomato’s parent company reported a sharp 90% year-on-year decline in consolidated net profit, falling to ₹25 crore from ₹253 crore, despite revenue climbing by 70%. Heavy investments in its quick commerce unit, Blinkit, are said to be a key factor behind the reduced profit margins.

Swiggy too is burning cash on expanding its Instamart vertical. The company’s losses doubled to ₹1,197 crore in the same quarter, even as operating revenue rose 54% to ₹4,961 crore.

Industry outlook

Both Zomato and Swiggy continue to depend heavily on order volumes and average order value, especially during the festive season when consumer spending typically surges. Platform fees, though small on individual orders, translate into significant revenue when multiplied across millions of deliveries.

Analysts note that while such hikes may temporarily burden customers, they are essential for sustaining the financial health of delivery firms navigating thin margins and rising operational expenses.

What it means for customers

For regular users, the ₹2 increase may seem modest, but in the long run, it reflects the sector’s push to monetise demand while grappling with competitive pricing and free-delivery expectations.

Consumers are also likely to see fluctuating platform fees in the coming months, depending on order volumes, seasonal demand, and company-level financial strategies.

Conclusion

The platform fee hike underscores the challenges food delivery companies face in balancing customer affordability with sustainable business growth. With festive demand expected to drive record orders, Zomato and Swiggy appear to be testing the limits of how much consumers are willing to absorb in additional charges.