Higher Platform Fees For The Same Service? Swiggy, Zomato Flex Pricing Power

Earlier this week, Bengaluru-based food delivery giant Swiggy increased its platform fees by approximately 17% to ₹17.58 (after taxes). The move came barely three days after its closest competitor, Zomato, raised its platform fee to ₹14.90 (before taxes) per order.

This is no longer a coincidence. It is a pattern that’s become clear ever since platform fees were introduced. 

Since 2023, both companies have raised platform fees eight times, to be exact, often within days of each other. What started as a seemingly negligible ₹2 charge has now ballooned into a double-digit levy, marking a more than 600% increase in under three years. 

At this point, the question isn’t just about why these fees are rising; more importantly, it’s also about where this goes and if it will ever end?

Why The Increase?

Historically, both Swiggy and Zomato have followed a near identical playbook. Platform fee hikes are typically introduced at the start of the financial year and then again during high-demand festive periods such as October. Over time, these hikes have been tested during peak demand days, and once consumer resistance proves negligible, the higher pricing is rolled out more broadly. 

This behaviour signals a shift from experimentation to optimisation. The platforms are no longer testing pricing; they are systematically discovering the upper limits of what consumers are willing to tolerate. 

What makes platform fees particularly attractive is their economics. Unlike delivery charges, which are partially passed on to gig workers, or discounts that directly erode margins, platform fees are high-margin revenues with negligible incremental costs. Every additional rupee charged effectively drops straight to the contribution margin. 

The numbers underline this shift. In FY25, Zomato’s parent, Eternal, reported ₹327 Cr in platform fee revenue from its food delivery business, while Swiggy generated about ₹222 Cr during the same period. Swiggy alone clocked ₹132 Cr in platform fees in Q3 FY26. 

For listed startups under constant investor scrutiny, such predictable, high-margin revenue streams are invaluable. Platform fees have quietly emerged as one of the cleanest levers to improve profitability optics. This raises a deeper concern: can these companies actually improve their unit economics without always relying on rising platform fees?

Are Platform Costs Really Rising?

The implicit justification for rising platform fees is that maintaining and operating these platforms is becoming more expensive. On the surface, this argument appears reasonable. Technology infrastructure, cloud costs, algorithmic optimisation, customer support systems, and rider incentives do require sustained investment. 

However, this narrative begins to fall apart under closer scrutiny. 

At scale, technology platforms typically benefit from operating leverage. As order volumes increase, the cost per transaction should ideally decline, not rise. Besides, rising automation due to AI adoption is helping these companies reduce their operational costs. For instance, Zomato said that managed data platform MongoDB Atlas and its AI platform Nugget are helping it save $11 Mn in customer support costs.

 If Swiggy and Zomato see themselves as technology-first platforms, akin to SaaS businesses, then scale should be driving efficiencies rather than justifying perpetual price hikes. 

On the other hand, if they are fundamentally logistics-heavy businesses, then those costs are already embedded within delivery charges. The platform fee, in that case, becomes difficult to justify as a separate and ever-expanding cost layer.

This results in business ambiguity. Swiggy and Zomato appear to be positioning themselves like SaaS platforms when it comes to extracting pricing power, but like marketplaces when it comes to accountability and cost explanation. 

The lack of clarity increasingly seems convenient and not incidental, because it enables flexibility in monetisation for Zomato and Swiggy, unlike any other structure. 

But it also raises a critical question for both consumers and regulators: what exactly are users paying for?

Funding Quick Commerce, New Experiments

Perhaps the most important dimension to this pricing strategy lies outside the food delivery business itself. 

Food delivery, for both Swiggy and Eternal (Zomato), is now a mature and relatively stable vertical. Despite repeated fee hikes, user churn has remained minimal, suggesting strong demand stickiness. 

This makes food delivery an ideal cash-generating engine. 

At the same time, both companies are aggressively investing in quick commerce, a segment that continues to demand significant capital. While Eternal’s Blinkit has shown early signs of improving profitability, Swiggy’s Instamart is still deep in investment mode, with losses widening as the company scales its operations. 

Competition in this space is only intensifying. Players such as Zepto, Flipkart Minutes, Amazon, and Reliance’s JioMart are all vying for market share, forcing incumbents to continuously invest in infrastructure, supply chains, and customer acquisition. 

In this context, platform fees begin to resemble a financial bridge. The steady high-margin revenues from food delivery are effectively cushioning the burn in adjacent verticals, particularly quick commerce.

This raises an uncomfortable implication. Consumers ordering food are not just paying for convenience; they may also be indirectly subsidising the expansion bets of these companies.

The Zomato-Swiggy Pricing Power

The synchronicity between Swiggy and Zomato reminds us of a price cartel. 

Fee hikes are rarely isolated decisions. Instead, they occur in close succession, often within days, and follow remarkably similar trajectories. There is little evidence of aggressive price competition between the two, despite their dominant market positions. 

The result is a duopoly that behaves, at times, like a coordinated system.

While there may be no explicit evidence of cartelisation since that requires evidence of coordinated price rises, the outcome is similar and raises legitimate concerns. 

Prices moving in tandem, consumer choice remaining relatively limited, and there is no meaningful pressure on either player to differentiate on pricing. 

This is precisely the kind of market dynamic that often warrants regulatory attention. 

Authorities such as the Competition Commission of India and the Central Consumer Protection Authority (CCPA) could be forced to take cognisance of these patterns, particularly as they directly impact millions of consumers on a daily basis.

Adding to this concern is the nature of the value being delivered. Swiggy and Zomato are effectively charging more for the same core service, delivering food from restaurants to consumers, with little visible enhancement in the experience to justify the incremental cost. 

In the absence of regulatory oversight, the pricing power of this duopoly appears unchecked.

Where Does This Go And Will It End?

The trajectory of platform fees suggest that there is no natural ceiling, at least not one that has become apparent yet. 

Consumer behaviour offers a key clue. Despite repeated increases, demand has remained resilient. Users have absorbed higher costs without significant pushback, largely due to the convenience and habit associated with these platforms. 

This creates a reinforcing cycle. As long as demand remains stable, the incentive to continue raising fees persists. 

Industry insiders believe that platform fees could soon touch ₹20 per order, with companies likely to test higher thresholds before settling on a new normal. 

The only realistic scenarios that could disrupt this couple are external. A credible third player such as Rapido’s Ownly or Rebel Foods’ EatSure offering significantly lower fees could force price competition, but past attempts, including ONDC,  have struggled to make a meaningful dent. New entrants may take time to scale, if at all. 

Alternatively, regulatory intervention could impose checks on pricing practices, especially if concerns around consumer exploitation and market dominance intensify. 

Until then, Swiggy and Zomato are likely to continue pushing the envelope. 

For now, the direction is clear. Platform fees are no longer a minor add-on; they become a central pillar of monetisation. And in the absence of resistance, they will keep rising, quietly, consistently, and within increasing confidence. 

The real question is not whether the next hike will come. It is how much higher consumers are willing to go before they finally push back against platform fees. 

Edited By Nikhil Subramaniam
Creatives By Varshita Srivastava

The post Higher Platform Fees For The Same Service? Swiggy, Zomato Flex Pricing Power appeared first on Inc42 Media.