From Kitchen to Cart: Zomato’s Platform Fee Recipe Gets Spicier at Rs 12 Ahead of Festive Season

Food delivery giant Zomato has announced a 20% hike in its platform fee, raising the charge from Rs 10 to Rs 12 per order across all cities where it operates. This move comes just ahead of the festival season, a peak period characterized by a surge in food delivery demand. This increase marks the second consecutive year Zomato has raised its platform fee around this season. The latest adjustment is seen as an effort to improve profitability amid growing operational costs and intensifying competition in the food delivery sector.

 

Key Highlights:

 

Platform fee increased by 20%, from Rs 10 to Rs 12 per order.

 

The hike is effective across all operational cities of Zomato.

 

The increase follows a similar move by rival Swiggy, which recently raised its platform fee to Rs 14 in select locations.

 

Zomato’s parent company, Eternal Ltd., reported a sharp 90% year-on-year drop in consolidated net profit in Q1 FY26 despite 70% revenue growth.

 

The hike applies to all customers, including Zomato Gold members who previously enjoyed certain exemptions.

 

The move aligns with additional monetization strategies, including charges for long-distance orders for restaurants.

 

Consumer backlash has emerged with concerns over rising costs making food delivery more expensive than the food itself.

 

Competition intensifies with the entry of Rapido’s Ownly, offering lower commission rates to restaurants.

 

Platform Fee Hike in Detail

Zomato introduced the platform fee in 2023, initially at Rs 2 per order. Over the past two years, the fee has steadily increased: from Rs 3 in 2023, then Rs 4 in early 2024, temporarily Rs 9 end of 2023, stabilized at Rs 7, then jumped to Rs 10 last festive season, and now up to Rs 12. This progression reflects the company’s attempt to balance growing costs and bolster revenue as order volume peaks in festive times.

 

The platform fee is charged on every food delivery transaction regardless of city or user category. Even loyal Zomato Gold members who earlier had some fee exemptions now face the full Rs 12 charge. The company has also introduced additional charges, such as long-distance fees for orders placed through restaurants, underlining ongoing monetization efforts.

 

Competitive Market Dynamics

The platform fee increase mirrors similar moves by Zomato's primary competitor Swiggy, which raised its fee to Rs 14 per order in some pin codes during the same period. Both companies face mounting pressures due to investments in quick commerce services and changing consumer behaviors. While Zomato’s parent company Eternal reported a 90% drop in net profit in Q1 FY26 (Rs 25 crore, down from Rs 253 crore YoY), revenue grew sharply by 70%, indicating high operational expenditure.

 

New players, notably Rapido’s Ownly, have entered the market offering lower commissions of 8-15% to restaurant partners compared to Zomato and Swiggy’s 16-30%, posing additional challenges for the incumbents.

 

Consumer Reactions and Market Impact

The fee increase has drawn mixed reactions from consumers and analysts alike. Some customers expressed frustration on social media, highlighting how platform fees sometimes surpass the cost of the food ordered, increasing the overall expense significantly. Comments suggest many users feel the cumulative charges—platform fee, delivery charges, and GST—make ordering food from apps costlier than buying directly.

 

From a financial perspective, the Rs 2 increase per order translates to substantial incremental revenue for Zomato, estimated at around Rs 15 crore monthly and Rs 180-200 crore annually given the high volume of daily orders (about 25 lakh per day).

 

Zomato’s business strategy seems focused on stabilizing profitability during high-demand seasons through incremental monetization, although the balance between pricing and consumer retention remains critical.

 

Conclusion

Zomato’s platform fee hike to Rs 12 is a calculated financial strategy ahead of the festive rush, reflecting broader trends in the competitive Indian food delivery market. While it aims to capitalize on increased order volumes and offset rising costs, it also risks consumer dissatisfaction amid rising overall charges. The food delivery landscape continues evolving, challenged by competition and consumer expectations for fair pricing and service quality.

 

Source: Economic Times, Financial Express, ET Now, CNBC TV18, NDTV Profit, Moneycontrol, ET Now News