Zomato, the publicly listed food delivery platform, has raised its platform fee from ₹3 to ₹4 per order in major markets, as per details on its app.
This rate adjustment came into effect on January 1, INC24 reported.
On New Year’s Eve, the platform fees were reported to have been temporarily increased to as much as ₹9 per order in specific markets, as mentioned by sources in an ET report.
Quoting a Zomato spokesperson, ET said, “These are business calls which we take basis various factors from time to time.”
On Sunday, December 31, Zomato experienced an unprecedented surge in order volume during New Year’s Eve, surpassing all-time highs. Deepinder Goyal, the CEO, shared on X that the order count exceeded the cumulative orders recorded by the food delivery platform for New Year’s Eve over the previous six years.
He wrote, “Fun fact: We’ve delivered almost as many orders on NYE 23 as we did on NYE 15, 16, 17, 18, 19, 20 combined 🤯 Excited about the future!”
He said in another tweet, “Love you, India! You’ve tipped over ₹97 lakhs till now to the delivery partners serving you tonight ❤️❤️❤️”
Zomato introduced a platform fee on its orders in August of the previous year, starting at ₹2 and later raising it to ₹3 in major markets. Swiggy, Zomato’s main competitor, followed suit, initially charging ₹2 and subsequently increasing it to ₹3.
Both platforms impose a platform fee in addition to the delivery charge, although it is waived for customers enrolled in their loyalty programs. Notably, this fee is applicable to Zomato Gold and Swiggy One members.
Additionally, Zomato’s quick-commerce branch, Blinkit, also imposes a platform fee of ₹2 per order.
While it may not be a popular choice among users, the implementation of platform fees has contributed to the increased revenues of food delivery startups, INC24 reported. Zomato, for example, highlighted in its July-September quarterly results that the platform fee played a role in the improvement of its take rate, representing the percentage it earns on each food delivery order.
According to a November research note by Jefferies, Zomato’s take rate in the September quarter of FY24 stood at 24.1%, marking a 28 basis points (0.28 percentage points) improvement from the previous year and a 32 basis points increase from the preceding three-month period, INC24 reported.
The platform fee is also considered a significant factor in Zomato’s recent financial success, leading to profitability in the past two quarters. The company reported a profit after tax of INR 36 Cr for the quarter ended September 30, 2023, following a net profit of INR 2 Cr in the April-June quarter.