There have been speculations that listing-bound firm Swiggy may plan to increase the platform fee to Rs 10. These started after the company reportedly introduced a platform fee of Rs 10 for select users. This is significantly more than the 3 rupees currently being charged by most users. Incidentally, as an Economic Times report states, users were not actually charged the Rs 10 fee, but rather hinted at during the checkout process, where they were shown the higher fee and then charged Rs 5 after a discount.
Swiggy has clarified that the platform fee is Rs 10. A Swiggy spokesperson told ET that the company has “no plans for a significant increase (in platform fees) in the near future.”
“We are constantly conducting small experiments to better understand consumer choices. “This was such an experiment,” the spokesman said in a statement.
What are platform fees?
Platform fees are the flat fee that food delivery companies charge all customers for orders. They have become important as delivery companies look to improve their bottom line.
Both Zomato and Swiggy are resorting to higher platform fees in their quest for profitability. The duo recently increased flat fees per order: Zomato to Rs 4 and Swiggy to Rs 3 (with a temporary New Year's Eve cap of Rs 9 for Zomato). Notably, both started with a fee of Rs 2 in August and April last year respectively.
This fee-raising strategy comes as restaurant commission increases become increasingly difficult due to potential backlash. Furthermore, with Swiggy's looming IPO (and fears that Prosus' promoter status will hinder share sales), exploring alternative revenue streams becomes even more important.
Beyond the platform fees, both companies offer fast commercial delivery (Instamart for Swiggy and Blinkit for Zomato) with a handling fee of Rs 4 in Bengaluru. Advertising is another way to generate revenue, although its meaning varies.
Swiggy has clarified that the platform fee is Rs 10. A Swiggy spokesperson told ET that the company has “no plans for a significant increase (in platform fees) in the near future.”
“We are constantly conducting small experiments to better understand consumer choices. “This was such an experiment,” the spokesman said in a statement.
What are platform fees?
Platform fees are the flat fee that food delivery companies charge all customers for orders. They have become important as delivery companies look to improve their bottom line.
Both Zomato and Swiggy are resorting to higher platform fees in their quest for profitability. The duo recently increased flat fees per order: Zomato to Rs 4 and Swiggy to Rs 3 (with a temporary New Year's Eve cap of Rs 9 for Zomato). Notably, both started with a fee of Rs 2 in August and April last year respectively.
This fee-raising strategy comes as restaurant commission increases become increasingly difficult due to potential backlash. Furthermore, with Swiggy's looming IPO (and fears that Prosus' promoter status will hinder share sales), exploring alternative revenue streams becomes even more important.
Beyond the platform fees, both companies offer fast commercial delivery (Instamart for Swiggy and Blinkit for Zomato) with a handling fee of Rs 4 in Bengaluru. Advertising is another way to generate revenue, although its meaning varies.
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