Zomato introduces Rs 2 platform fee in select markets: All you need to know

Food delivery platform Zomato has introduced a Rs 2 platform fee on its food delivery app. This move is currently in its experimental phase and is being tested in select markets. However, the exact markets where the platform fee is being tested remain unknown. The platform fee is levied per order, irrespective of the cart value, and applies to all users, including those enrolled in the Zomato Gold loyalty program.

The introduction of this nominal fee is seen as an attempt by Zomato to explore new avenues for profitability and enhance the overall user experience. The company's spokesperson confirmed to Economic Times that the long-term implementation of this fee structure would depend on the outcome of this trial. They further explained that the company may or may not proceed with scaling the fee structure based on its effectiveness and user response.

This move comes in the wake of a similar strategy adopted by its arch-rival, Swiggy, which started implementing a Rs 2 platform fee on all orders earlier in the year. As Zomato seeks to strengthen its financial standing, the platform fee has been viewed as a potential measure to boost earnings and drive sustainable growth.

Earlier, Zomato’s chief financial officer Akshant Goyal told analysts in an earnings call that the company has not yet decided on the implementation of 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.

In recent news, Zomato posted its first-ever profitable quarter, recording a profit of Rs 2 crore in the first quarter of FY24. This was a significant turnaround from a loss of Rs 186 crore in the same quarter last year. The company's income surged by an impressive 64 per cent to Rs 2,597 crore in the same quarter, showing significant progress compared to a loss of Rs 186 crore recorded a year ago.

“Realistically speaking, we were expecting to hit this milestone in the September quarter (Q2FY24), and we were being conservative in our earlier guidance. However, some critical parts of the team across our businesses out-executed our expectations/plans, and some of our initiatives delivered better outcomes than we had expected,” Akshant Goyal had said.

As of June 2023, Zomato boasted around 17.5 million monthly transacting customers.

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