Food delivery giant Swiggy has increased its platform fee to Rs 14, reflecting a 600% rise over the past two years. This decision has sparked discussions among restaurants, delivery partners, and consumers about rising operational costs and the sustainability of the food delivery business model.
Understanding the Platform Fee
The platform fee is charged by Swiggy per order to:
Cover operational costs of running the platform.
Maintain technology infrastructure, including app development and support.
Facilitate marketing, customer support, and logistics.
Over two years, the fee has escalated from Rs 2–3 per order to Rs 14, a substantial increase impacting restaurant margins and delivery pricing.
Reasons Behind the Hike
Rising Operational Costs: Inflation, tech upgrades, and employee expenses contribute to higher platform charges.
Enhanced Services: Improved app features, faster delivery, and better customer experience require additional funding.
Sustainability of Delivery Model: Swiggy aims to maintain profitability while balancing partner incentives.
Increased Regulatory and Safety Measures: Compliance with food safety and delivery regulations adds to operating expenses.
Impact on Stakeholders
1. Restaurants
Small and mid-sized restaurants may absorb the extra fee or pass it onto consumers.
Margin pressures could affect pricing strategies and menu offerings.
2. Consumers
End-users may experience slightly higher delivery costs per order.
Swiggy users may reassess order frequency or explore alternative platforms.
3. Delivery Partners
Delivery partners may see unchanged earnings, but operational efficiency remains crucial to maintain profitability.
Industry Perspective
Experts note that while platform fee hikes are common globally, Swiggy’s sharp increase has raised concerns about affordability and competitiveness. Food delivery platforms in India face:
Fierce competition from Zomato, Dunzo, and others.
Pressure to offer discounts and loyalty programs to retain users.
Balancing restaurant partnerships and customer satisfaction while remaining profitable.
Conclusion
The rise in Swiggy’s platform fee highlights the challenges of the evolving food delivery ecosystem. While necessary for sustaining operations and technology, the hike impacts restaurants, delivery partners, and consumers alike. Observers will be closely watching how stakeholders adapt to this new pricing reality.
FAQs
Q1. What is the new platform fee charged by Swiggy?
The platform fee is now Rs 14 per order, reflecting a 600% increase in two years.
Q2. Why has Swiggy increased the platform fee?
The hike is due to rising operational costs, tech upgrades, enhanced services, and regulatory compliance.
Q3. How does this impact restaurants?
Restaurants may face reduced margins or pass the additional cost to consumers through higher menu prices.
Q4. Will consumers notice a change?
Yes, delivery costs per order may slightly increase.
Q5. How does this compare to competitors?
While fee hikes are common, Swiggy’s 600% increase over two years is considered significant in the Indian market.
Published on : 16th August
Published by : SMITA
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