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Zomato hikes platform fee by 25 per cent, suspends intercity deliveries

The hike comes days the Zomato received a tax demand and penalty order of Rs 11.82 crore related to GST on export services provided to its subsidiaries located outside India from July 2017 to March 2021.

Edited By: Arushi Jaiswal @JaiswalArushi New Delhi Updated on: April 23, 2024 16:15 IST
Image Source : FILE PHOTO Representative image

New Delhi: Online food delivery platform Zomato has hiked its platform fee by 25 per cent to Rs 5 from the previous Rs 4 in specific markets. The food tech giant has attributed this adjustment to business decisions made within the company. According to company sources, the hike in platform fees applies to major cities like Delhi-NCR, Bengaluru, Mumbai and Hyderabad, among others.

When reached out for a comment, a Zomato spokesperson told news agency PTI, "These are business calls which we take basis various factors from time to time".

What is platform fee?

The platform fees are the fixed charges levied by food delivery companies on all customers for each order placed. Zomato imposes the platform fee alongside a delivery charge, which is waived for customers enrolled in its Zomato Gold loyalty program.

Zomato introduced the platform fee in August 2023, initially set at Rs 2 per order. Subsequently, in October of the same year, the company raised the charge to Rs 3 across most of its key markets. On January 1, Zomato further increased the platform fee for users to Rs 4 from the previous Rs 3.

Zomato's main rival, Bengaluru-based Swiggy, imposes a platform fee of Rs 5 on food delivery orders. However, there have been reports indicating that Swiggy has displayed a platform fee of Rs 10 to certain users.

Intercity Legends service suspended 

The company has also suspended 'Intercity Legends', its inter-city food delivery service. When searching for its intercity delivery service 'Intercity Legends', the company on its app says, "Enhancements are underway! Please stay tuned as we will be back to serve you soon".

The service which was launched in 2022, initially offered next-day delivery of restaurant food from specific cities. 

This comes days before it is slated to announce the results for the quarter that ended in March. The company is expected to announce the fourth (January-March) quarter results next month.

Notably, the food delivery platform has received various tax demand orders aggregating to Rs 227.85 crore since March 15, separate regulatory filings showed. In February, Zomato reported a consolidated net profit of Rs 138 crore for the December quarter.

(With PTI inputs)

Also Read: Zomato introduces 'large order fleet' for serving groups of up to 50 people, CEO shares EV’s pics

Also Read: Zomato gets tax demand order of Rs 23.26 crore, online food delivery platform to appeal against it


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