Zomato, the Gurugram-based food delivery company, has hiked the platform fee on food delivery orders to Rs 5 per order, marking a jump of 25 per cent compared to the previously levied platform fee of Rs 4. The revised platform fee, which came into effect on April 20, shall have a bearing on food orders in Bengaluru, Mumbai, Hyderabad, Lucknow, and the National Capital Region (NCR) as of now.
This move comes after the food delivery company increased the fee to Rs 4 from Rs 3 per order in January 2024. For those unaware, Zomato introduced a standardised flat platform fee back in August 2023, starting at Rs 2 per order and subsequently increasing the fee to Rs 3 before pushing it up again to Rs 4 across key markets on January 1 this year. On New Year's Eve, it had temporarily hiked the platform fee to Rs 9 per order.
In response to the platform fee hike, Zomato's shares witnessed a surge of over 4 per cent on the BSE (Bombay Stock Exchange) on April 22 (Monday) in early trade to Rs 197.8 apiece, compared to its Friday's close at Rs 189.20. This, according to analysts, would help partially offset the impact of GST (Goods and Services Tax) on delivery charges. Moreover, this increase of Rs 1 for a large customer base (20 to 22 lakh orders per day, according to market reports) is expected to significantly boost the company’s earnings within a quarter.
The platform fee applies to Zomato Gold members as well. Besides the platform fee, Zomato levies a delivery charge on food orders. However, this delivery charge is waived for customers availing of its Zomato Gold loyalty programme, which includes benefits like discounts and free deliveries on orders above Rs 199. Note that Zomato offers free deliveries within 10km of users. Meanwhile, Zomato's main rival, Bengaluru-based Swiggy, charges a platform fee of Rs 5 on food-delivery orders.
In addition, Zomato has suspended its intercity food delivery service, called Legends. In its latest guise, Legends could not reportedly gain significant traction among the customer base. It also encountered legal challenges. Launched in 2022, the service initially delivered food orders from select restaurants in major cities to customers in other cities. However, Zomoto revised the model last year to deliver pre-stocked items from other cities in a lesser time.
