Platform Fee: Zomato starts testing Rs 2 platform fee: What is it and other details

Zomato has introduced a flat Rs 2 platform fee on its food delivery app in certain markets. The Rs 2 platform fee is levied per order and is reportedly so far for select users. The platform fee is added irrespective of the cart value, meaning whatever the value of the order is. It is also being levied on users of its loyalty programme Zomato Gold. The markets where the company is testing this platform fee is not known so far.

This follows a similar move announced by arch rival Swiggy, which started levying a similar platform fee of Rs 2 on all orders in April.
Zomato’s Rs 2 platform fee is so far in an experiment stage. The experiment is likely to be implemented across the board, if successful, to boost profitability. “This is in an experiment phase right now, and we may or may not scale,” a spokesperson for the Gurgaon-based food delivery company told Economic Times in response to a query.

The platform fee comes just days after Zomato posted its first ever quarterly profit of Rs 2 crore for the June quarter. Interestingly, Zomato’s chief financial officer Akshant Goyal had told analysts during the earnings conference that the company has not taken a call on imposing platform fees. “So, it’s a business call…we are aware about that and I think we’ll take a call when we think it’s right for business. At this point, we haven’t done that…there is no platform fee on our platform,” Goyal had said.
He was responding to a question on whether Zomato was planning to roll out a platform fee, or had tried it in certain micro markets.
Posted strong growth in June quarter
Strong growth in core businesses pushed up the company’s income by 64% to Rs 2,597 crore in the June quarter. The company reported a profit after tax of Rs 2 crore in the June quarter, as against a loss of Rs 186 crore a year ago.
“I can in hindsight say that most of our seemingly risky bets have changed the trajectory of the business significantly, much faster than expected,” founder and CEO Deepinder Goyal said in a letter to shareholders. The food delivery business was aided by a recovery in demand in recent months after a few sluggish quarters. At the end of June 2023, Zomato had about 17.5 million monthly transacting customers.