Zomato is currently testing a priority delivery feature that will allow customers to receive their orders faster for an additional fee, according to a report by Moneycontrol. The feature is being tested in Bengaluru and Mumbai, and requires customers to pay an extra Rs 29 for a 16-21 minute delivery, compared to the standard 21-minute delivery time. This additional charge applies even to Zomato Gold members.
Alongside these changes, Zomato is also revising its intercity delivery service, Legends, which launched in 2022. The service is being reworked due to issues with the delivery method, and plans to expand it are currently on hold. Zomato is also facing a lawsuit over unfulfilled promises related to Legends.
Zomato Hikes Platform Fee
Zomato has also increased its platform fee by 25 per cent, making it Rs 5 per order. This fee is a flat charge applied to all orders. The increase comes just a week before Zomato is set to announce its financial results for the March quarter.
The company first introduced a platform fee of Rs 2 in August last year, which was later increased to Rs 3. Following a surge in food orders on New Year’s Eve, the fee was further increased to Rs 4 per order in January.
This fee increase affects customers in Delhi-NCR, Bengaluru, Mumbai, Hyderabad, and Lucknow. Swiggy, a competitor of Zomato, already charges a platform fee of Rs 5, with some customers reporting a fee of Rs 10.
In addition to the fee hike, Zomato has temporarily suspended its inter-city food delivery service, Intercity Legends. A message on the ‘Legends’ tab on the Zomato app reads, "Enhancements are underway. Please stay tuned as we will be back to serve you soon.”
Zomato reportedly handles about 85-90 crore orders annually and saw a 30 per cent year-on-year increase in adjusted revenue in the December quarter.
Recently, Zomato received a GST demand and penalty order totaling Rs 11.81 crore for the period of July 2017 to March 2021. The order, issued by the Additional Commissioner of Central Goods and Services Tax, Gurugram, is split into a GST demand of Rs 5.9 crore and a penalty of the same amount. This is for export services provided by Zomato to its foreign subsidiaries during the specified period.