Zomato Increases Platform Fee Amid Rising Costs

Zomato Revises Platform Charges

• Zomato has increased its platform fee for food delivery orders. The company now charges customers an extra fee of ₹2.40 for each order they make. The fee has risen from ₹12.50 to ₹14.90, as shown in the company’s app.
• The main competitor Swiggy uses the same pricing model as Zomato. The current platform fee total for users stands at ₹14.99 which includes all applicable taxes.

Rising Fuel Costs Impact Delivery Services

• West Asia presents ongoing conflicts which cause oil prices to rise. Delivery operations suffer from increased fuel expenses. The company raised its platform fee because of mounting expenses which they had to deal with.
• Delivery companies depend on fuel to manage their delivery operations. The price increase for fuel leads to higher expenses which businesses have to pay. Businesses need to increase prices in order to protect their profit margins.

Competition Intensifies in Food Delivery Market

• The food delivery sector continues to grow rapidly. At the same time, competition among companies is increasing.
• Rapido, known for cab services, has entered the food delivery market. The company provides its delivery services under the Ownly brand name in Bengaluru.
• Rapido stated that it will not charge additional platform fees to restaurants or customers, apart from the standard delivery fee. The business strategy will help the company attract new customers while creating competitive challenges for Zomato and Swiggy which currently dominate the market.