Zomato earned Rs 83 crore from platform fee: What it is, how it benefits the company and how it affects you

If you are living in a metropolitan area in India, chances are you regularly order food from Zomato. The company launched in India in 2008 and was earlier just a food delivery service. Overtime, it evolved into a food discovery platform as people can rate restaurants, reserve tables, leave reviews and more.

Now, we all know that when we order food via Zomato we end up paying slightly more. There are various charges that the company levies on users including handling charges and delivery fee. In August last year, Zomato started charging a platform fee from users. And this has proved to be a successful business move for the platform as during its annual report, the company revealed that it has collected Rs 83 crore till March from levying platform fee.

So what exactly is this platform fee that has raked in moolah from the company? Moreover, how does it benefit Zomato and what effect does it have on the end consumer? Read on to find out.

What is Zomato’s platform fee?

Zomato's platform fee is a small additional charge that the company adds to your order. Think of it as a convenience fee for using the app's services, including delivery, customer support, and the seamless experience of browsing through hundreds of restaurant options.

Initially, the company used to levy Rs 2 per order as platform fee. But that amount has grown in the last one year and today Zomato charges Rs 6 as platform fee in key areas. It can be located when you load the bill details of your order.

How it impacts Zomato

The Platform fee might seem like a minor addition to your bill, but when multiplied by millions of orders, it becomes a significant source of revenue for Zomato.

Since every order placed incurs this charge, it increases the company’s "take rates" — the profit made per order. This fee serves as a crucial, controllable revenue stream in the supply chain, providing a steady income source that companies can directly manage. Alongside advertising fees and restaurant commissions, the platform fee has become a significant revenue generator for Zomato.

In other words, levying a platform fee is basically a clever way for Zomato to boost its revenue without significantly increasing the prices of individual menu items.

During its annual report, Zomato identified the platform fee as one of the three main factors driving Zomato's Adjusted Revenue, which saw a 27 percent year-on-year growth, reaching Rs 7,792 crore in FY24.

"Adjusted Revenue as a percentage of GOV (gross order value) continued to rise, primarily due to higher restaurant commission take-rates, improved ad monetization, and the introduction of the platform fee from Q2FY24 onwards," the report highlighted.

The report also added that all of the above mentioned factors compensated for the reduction in customer delivery charges per order due to the free delivery benefit available on Gold orders.

How are you affected by Zomato’s platform fee?

Zomato’s report also revealed that most late-night orders in the last fiscal year came from Delhi NCR, while Bengaluru led in the number of breakfast orders. Now the question that arises is, how exactly is the end consumer being affected by the platform fee?

One of the obvious answers is that it makes your order a bit more expensive. Especially if you order from the food delivery giant on a daily basis.

You might not even notice the addition of Rs 6 in your final bill but if you order food from Zomato everyday and start calculating, it will come up to be a noticeable amount.

Say you have ordered food from Zomato everyday since the last three months. In this case, you would have ended up paying around Rs 540 as platform fee.

Moreover, platform fee tends to be higher during peak hours or weather conditions. Thus, the order ends up being even costlier.

Just last month, CEO of Bengaluru-based company Capitalmind Deepak Shenoy, was making headlines for saying that he has reduced ordering food from Swiggy and Zomato because of higher platform fees.

“Massively reduced ordering from Swiggy/Zomato, down to just once maybe on a weekend, like today and noticed their 'platform' charge is now ₹6. Happy that I weaned myself off the daily ordering. They also take 30 percent from restaurants, btw,” he wrote in a post on X (earlier called Twitter).