Swiggy's new Rs 2 'platform fee' on food delivery order irks users

Swiggy’s new platform fee of Rs 2 on food delivery orders, levied on all users irrespective of cart value, has met with indignation from customers since it was rolled out last week.

The move has drawn the ire of many Swiggy users, who took to Twitter to voice their complaints.

“Wow! Swiggy is not a “Food Delivery Company”. It’s a “Food Trading Company” that buys food at a low price and then sells it at a higher price. And then there is a delivery fee. And now they want to charge a ‘platform fee’ as well,” tweeted Mahesh Mohan, a customer.

Expressing similar concerns, Diganta Bhaduri, another Swiggy user, wrote, “Time to stop ordering from Swiggy. Firstly, they charge huge commissions from restaurants, then they charge delivery fee + surge and now platform fee.”

The fee is being levied on users from Bengaluru and Hyderabad, for a start. However, some users on Twitter claimed that the fee was applicable in Chennai as well. The charge, imposed only on food delivery orders at the moment and not on orders on Instamart — the company’s quick commerce arm — is likely to be extended to other regions.

Even users of Swiggy One —where subscribers do not have to pay a delivery fee — are required to pay the platform charge. Swiggy One users also expressed dismay at having to pay platform fees.

A Swiggy representative on Twitter said the new charge was a flat fee to ensure the “upkeep” of the app, “allowing us to continually improve and provide you with a seamless experience”.

Sameer Arora, founder of Helios Capital, dubs the platform fee a “peace offering” to its Gurugram-based rival Zomato.

In a tweet last month, he had said, “It’s simple. Swiggy has to back off. It’s unlisted, Zomato is listed. If Swiggy gets aggressive in (the) market leading to weakness in Zomato, it can’t go public at a good valuation as (the) benchmark is Zomato. Best for Swiggy to cool down and pray for the prosperity of Zomato.”

The new platform fee, he says, indicates that Swiggy has “indeed backed off”.

The Bengaluru-based decacorn — the term for a company valued at $10 billion or more — has reportedly advanced its timeline for achieving profitability on its food delivery and quick commerce businesses. The new platform fee is a likely avenue to generate additional cash as the company looks to rein in expenses.

Swiggy, which delivers more than 1.5 million orders a day, stands to accumulate a sizable amount through this new fee that it aims to redirect to its core business.

In its results, Swiggy had reported that its losses had widened 2.24 times to Rs 3,628.9 crore in FY22 from Rs 1,616.9 crore in FY21, fuelled by a 227 per cent rise in costs. Expenses came in at Rs 9,748.7 crore in FY22, compared to Rs 4,292.8 crore in the year before.

This came even as Swiggy raked in revenues of Rs 5,704.9 crore — a little over the two-fold jump from the previous financial year.