Zomato hikes platform fee on food delivery to Rs 4 from Rs 3

Zomato has increased the platform fee it charges users for food delivery to Rs 4 per order in its key markets from Rs 3, according to information on the company’s app and people in the know. This fee hike of 33% is effective January 1.

On Sunday, New Year’s Eve, the Gurugram-based company had temporarily increased the platform fee to as high as Rs 9 per order in certain markets for some orders. On this New Year’s Eve, Zomato’s deliveries hit an all-time high — it delivered as many orders on Sunday as it had handled on December 31 in 2015, 2016, 2017, 2018, 2019 and 2020 combined, chief executive Deepinder Goyal wrote in his social media posts.

The listed company started charging the flat platform fee in August 2023. Initially Rs 2 per order, it was subsequently increased to Rs 3 in most of its major markets.

“These are business calls which we take basis various factors from time to time,” a Zomato spokesperson told ET on the platform fee hike, but did not provide further details.

Zomato’s biggest rival, Bengaluru-based Swiggy, also charges such a platform fee on its food-delivery orders. Prosus-backed Swiggy too last year started with a Rs 2 fee, which was later increased to Rs 3.

Zomato levies the platform fee in addition to the delivery charge, which is waived for customers of its loyalty programme, Zomato Gold, who make an upfront payment and get benefits such as discounts and free delivery. The platform fee, however, is applicable to Zomato Gold members as well.

Zomato-owned quick-commerce platform Blinkit levies a handling charge of Rs 2 on every order.In its July-September quarterly results, Zomato’s management had attributed the improvement in its take rate — or the percentage of what the company makes on every order — for food delivery to the introduction of the platform fee.

According to a research note by Jefferies in November, Zomato’s take rate in the September quarter of fiscal 2024 was 24.1%, improving 28 basis points (0.28 percentage point) from a year earlier and 32 basis points from the previous three-month period.

The report estimated Zomato to have delivered around 190 million orders during the quarter, 14% higher from the same period last year.

The three-month period ended September 30 saw Zomato post its second consecutive quarterly net profit. It reported a profit after tax of Rs 36 crore during the quarter. In the April-June quarter, it had reported a net profit of Rs 2 crore.

On October 10, ET reported, citing a UBS report that customers of food-delivery and quick-commerce platforms were broadly agnostic to marginal increases in costs and that such non-delivery fees provided a revenue upside and helped unit economics for the companies.

ET had reported on September 2 that several consumer-focussed internet platforms, including Uber, BigBasket’s quick-commerce vertical BB Now and Zepto were levying a per order, or per booking, fee to improve their unit economics.

Shares of Zomato were trading 0.8% higher at Rs 124.70 on the BSE Monday late afternoon.