Ordering food on Zomato gets expensive: Zomato raises platform fee by 25%

Zomato platform fee: Zomato, food delivery platform, has recently implemented an increase in its platform fee, according to media reports. Effective from 20th April, platform fee, which users are charged per order, has surged by 25 per cent, now standing at Rs 5 per order. increase has been observed across several major cities including National Capital Region, Bengaluru, Mumbai, Hyderab, and Lucknow.

This justment follows a previous increase in platform fee from Rs 3 to Rs 4 per order, which was implemented on 1st January. rival delivery service Swiggy, hequartered in Bengaluru, alrey charges a platform fee of Rs 5 per order.

Platform fee is distinct from delivery charges and is applicable even for users enrolled in Zomato Gold, company's loyalty programme. Despite waiver of delivery charges for Gold members, platform fee remains applicable.

Zomato initiated practice of charging a platform fee in August 2023, starting at Rs 2 per order, which was subsequently increased to Rs 3 in October, and n to Rs 4 in January, before reaching current rate of Rs 5 in April.

In dition to its food delivery services, Zomato's quick-commerce platform Blinkit imposes a handling charge of Rs 2 on each order.

implementation of platform fees coincided with a notable increase in Zomato's quarterly profits. In October-December period, company reported a profit of Rs 138 crore, a strong rise from Rs 36 crore reported in preceding quarter. This marked a turnaround from Rs 347 crore loss incurred in December quarter of previous fiscal year.

Furrmore, Zomato's operating revenue for third quarter of fiscal year 2023-24 saw a robust year-on-year growth of 69 per cent, amounting to Rs 3,288 crore on a consolidated basis.

Intercity deliveries have been a focus area for Zomato's expansion efforts. However, company faced legal challenges resulting in suspension of its intercity delivery service, known as Legends. Launched in 2022, Legends initially facilitated food deliveries between select cities, which later evolved to include delivering pre-stocked items from or cities, aimed at reducing delivery times.

Following initiation of intercity delivery services, Siddharth Jhawar, Zomato's he of intercity delivery, resigned from his position after three months. A lawsuit was filed against Zomato in a district court in 2024 by a resident of Delhi, alleging that pre-stocked items were being delivered from nearby warehouses, raising questions about legality and operational practices of intercity delivery service.