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Food delivery to get costlier as Zomato, Swiggy, magicpin raise platform fees
Ahead of the festive season, users to face higher costs with platform fee hikes of up to Rs 15 per order and an 18% GST on delivery charges from September 22.
Platform fees have become an important revenue stream for food delivery companies in recent years.
Ordering food online is set to become more expensive for millions of Indians, as leading food delivery platforms Zomato, Swiggy, and magicpin have hiked their platform fees in the run-up to the festive season. The pinch is expected to deepen further from September 22, when an 18% Goods and Services Tax (GST) will be levied on delivery charges.
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Swiggy reportedly has raised its platform fee to ₹15 (inclusive of GST) in select markets, while rival Zomato has increased it to ₹12.50 per order (excluding GST). Magicpin, the third-largest player in the sector, has also revised its platform fee to ₹10 per order, positioning itself as the most affordable among major players.
Industry estimates suggest that the new GST levy will increase costs by roughly ₹2 per order for Zomato users and ₹2.6 per order for Swiggy customers.
A magicpin spokesperson clarified to PTI that the GST changes will not affect its cost structure. “Recent GST changes do not impact our cost structure. Thus, for consumers, there would be no impact of the GST increase. Our platform fees will remain at ₹10 per order, which is also the lowest among major food delivery companies,” the spokesperson said.
Platform fees have become an important revenue stream for food delivery companies in recent years.
However, the simultaneous hikes across the industry underscore a larger trend of rising costs in India’s food delivery ecosystem.
Elara Securities spokesperson told Storyboard18, that the strategy of raising platform fees ahead of the festive season and retaining the higher rate later has been in place since last year for Zomato (Eternal), when the fee was increased from ₹6 to ₹10. "This is consistent with past practice, and is expected to be trialled first in tier-I markets before being gradually rolled out nationwide," it was added. The platform fee has increased by 6x, since its introduction on Zomato platform.
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