Swiggy increases platform fee amidst competitive food delivery landscape

Swiggy has raised its platform fee on food orders to ₹3 per order, marking a 50% increase from the previous fee of ₹2.

The revised fee structure was put into effect starting October 4, initially in Hyderabad and Bengaluru, but was later extended to all regions where Swiggy operates across the country.

It's important to note that Swiggy has been applying a platform fee on food orders since April this year, initially set at ₹5. However, the company has been offering a discount of ₹2, making the effective fee ₹3 for each order.

Swiggy’s main competitor, Zomato, also charges a platform fee of ₹2 per order, although in some cities, it charges ₹3, as per an ET report

A spokesperson from Swiggy stated to ET that charging a platform fee is a common practice among food aggregators and is not an unusual step. This fee is typically considered as a measure to improve unit economics, referring to the revenue generated by a company from each unit of sale or order.

As per a Business Standard report, several other companies, including Uber, BB Now, the quick commerce arm of BigBasket, and Zepto, have been implementing similar charges on each order.

This increase in platform fee comes in the backdrop of Swiggy's financial performance. The company, based in Bengaluru, reported an 80% year-on-year increase in losses, amounting to around $540 million in 2022, according to information shared by its owner in June. Despite this, Swiggy's CEO and founder, Sriharsha Majety, claimed in a blog post in May that the food delivery business had become profitable as of March this year.

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