Swiggy Raises Platform Fee on Food Delivery Orders

Swiggy Raises Platform Fee on Food Delivery Orders

Indian food delivery platform Swiggy has increased its platform fee on food delivery orders from Rs 2 to Rs 3, effective from October 4, as reported by The Economic Times (ET). Initially implemented in Hyderabad and Bengaluru, the platform fee hike has been extended nationwide.

Swiggy introduced a platform fee in April, which customers are charged regardless of their order value. Following the latest increase, the platform now offers a Rs 2 discount after applying a platform fee of Rs 5, indicating the potential for further fee adjustments.

Swiggy’s competitor, Zomato, has also raised its platform fee from Rs 2 to Rs 3 in certain locations. This fee is applied alongside the delivery charge, which is waived for subscribers to Swiggy’s loyalty program, Swiggy One. Even Swiggy One subscribers are now required to pay the platform fee.

The move to raise these charges is part of a broader strategy by delivery platforms to enhance unit economics by increasing the take rate, or the revenue generated per order. This approach has been adopted by companies like Uber, BigBasket’s quick commerce service BB Now, and Zepto.

As of June, Swiggy reported an 80% year-on-year increase in losses, reaching around $540 million in 2022, according to data provided by Prosus. Despite the losses, Naspers, a technology investor, noted that Swiggy’s gross merchandise value for food delivery increased by 26% year-on-year.

In May, Swiggy CEO Sriharsha Majety stated that the company’s food delivery business became profitable as of March 2023. He also mentioned that Swiggy had made substantial investments in its grocery delivery business, Instamart, and was planning to reduce investments in that sector as it moves toward profitability.

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