Zomato's Diwali Surprise: Platform Fee Rises to ₹10 Just Before the Festivities

As the festive season approaches, food delivery apps like Zomato and Swiggy anticipate a surge in orders for meals and sweets. In preparation for this busy period, Zomato has announced a hike in its platform fee from ₹6 to ₹10, introducing it as the "Festive Season Platform Fee."

Reason for the Fee Increase

Zomato's decision to raise the platform fee is driven by the need to manage operational costs during the festive rush. A notification on the Zomato app stated, “This fee helps us pay our bills to keep Zomato running. To maintain services during the festive rush, it has increased slightly.” This fee adjustment reflects the company’s strategy to ensure smooth service delivery during a peak ordering period.

History of Platform Fees

Zomato initially introduced platform fees in 2023, starting at ₹2 per order. The fee was gradually increased in response to rising operational costs and the changing landscape of food delivery. Here is a brief timeline of the fee adjustments:

• 2023: Initial platform fee set at ₹2.

• April 2024: Fee raised to ₹3.

• April 2024: Fee increased again to ₹5.

• July 2024: Further raised to ₹6.

• October 2024: Current fee set at ₹10.

This latest adjustment signifies a significant five-fold increase in just one year.

Distinction Between Charges

It's important to note that the platform fee is distinct from other charges that customers may encounter while ordering through Zomato. These include:

• GST (Goods and Services Tax): A tax levied on goods and services.

• Delivery Charges: Fees for the delivery service provided by Zomato.

• Restaurant Charges: Additional costs set by the restaurants.

Customers must pay the platform fee regardless of their Zomato Gold membership status, meaning it applies universally to all users.

Zomato's Share Price Surge

Interestingly, the announcement of the increased platform fee has positively impacted Zomato's share price. On Wednesday, the company's stock rose by 2.3%, trading at ₹262.25 by 11:50 AM. Over the past year, Zomato's shares have increased by more than 140%, reflecting investor confidence in the company's strategies and growth potential.

Conclusion

With the festive season approaching, Zomato's decision to increase the platform fee highlights its efforts to adapt to rising operational costs while maintaining service quality. As customers prepare to order their favorite dishes and sweets, understanding the breakdown of fees can help them navigate the expenses associated with food delivery. The significant rise in share prices further indicates that investors are optimistic about Zomato's growth trajectory, making it a noteworthy player in the food delivery market.