Coordinated hikes, weak cost logic, and duopoly power raise tough questions for consumers and regulators
The big shift: Fees rise, resistance stays low
Swiggy and Zomato have again raised platform fees—Swiggy to ₹17.58 and Zomato to ₹14.90—within days of each other.
- Fees up 600%+ since 2023 (from â‚ą2)
- Eight hikes in under three years
- Pattern signals pricing power, not coincidence
What began as a marginal charge is now a core revenue lever.
From experimentation to optimisation
Initially, fee hikes were tests. Now, they’re calibrated moves.
- Rolled out during high-demand periods
- Expanded after minimal consumer pushback
- Designed to find the upper limit of tolerance
This is no longer trial-and-error—it’s systematic monetisation of user habits.
Why platform fees matter so much
Unlike other charges, platform fees are unusually profitable.
- Near-zero incremental cost
- Flow directly into contribution margins
- No sharing with delivery partners
The numbers reflect this shift:
- Zomato (Eternal): â‚ą327 Cr in FY25 platform fee revenue
- Swiggy: â‚ą222 Cr in FY25; â‚ą132 Cr in Q3 FY26 alone
For investor-facing companies, this is clean, predictable revenue—the kind markets reward.
The cost argument doesn’t fully hold
Both companies imply rising costs justify higher fees. But the logic has cracks.
- Scale should drive lower per-order costs
- AI and automation are reducing expenses
- Example: Zomato saving $11 Mn via tech platforms
So what exactly are users paying for?
- If it’s a tech platform, efficiency should improve margins
- If it’s logistics, costs are already in delivery fees
This ambiguity creates a convenient middle ground—maximum pricing flexibility, minimal accountability.
Funding the next big bet: Quick commerce
The real story may sit outside food delivery.
- Food delivery = stable, cash-generating vertical
- Quick commerce = capital-intensive, still scaling
Key dynamics:
- Blinkit showing early profitability signs
- Instamart still loss-heavy and expanding
- Competition intensifying: Zepto, Amazon, Flipkart, JioMart
Platform fees act as a financial bridge, funding these bets.
In effect, your dinner order might also be subsidising 10-minute grocery wars.
Duopoly dynamics: Parallel pricing power
The synchronised hikes are hard to ignore.
- Fee changes occur within days
- No visible price competition
- Similar pricing trajectories
While not proven cartelisation, the outcome resembles one:
- Limited consumer choice
- No pricing pressure
- Coordinated market behaviour
This is the kind of pattern that often draws regulatory scrutiny.
Paying more for the same service
Here’s the core friction:
Consumers are paying more, but the service remains largely unchanged.
- Same restaurants
- Same delivery timelines
- No clear experience upgrade
It’s like paying surge pricing—without the surge.
Where does this end?
So far, consumer behaviour suggests high tolerance.
- Demand remains sticky despite hikes
- Convenience outweighs price sensitivity
Industry signals suggest:
- Fees could soon touch â‚ą20 per order
- Further testing likely before stabilisation
What could disrupt this cycle?
- A credible low-cost challenger (like Rapido’s Ownly)
- Or regulatory intervention
Until then, the trajectory is clear—fees will keep rising because they can.
TL;DR
Swiggy and Zomato have raised platform fees over 600% since 2023, turning them into a high-margin revenue stream. Despite weak cost justifications, users continue paying, enabling the duopoly to fund new bets like quick commerce—raising concerns over pricing power and regulation.
AI summary
- Platform fees up 600%+ since 2023
- High-margin revenue with minimal costs
- Weak justification despite scale efficiencies
- Funds quick commerce expansion
- Duopoly pricing raises regulatory concerns
