Swiggy’s New Service Fee Policy For Non-metro Cities: Report

The food delivery company Swiggy, which is headed for an IPO, has begun to charge its service fee to eateries outside of metro areas based on the gross order value, which also includes GST and packaging costs, as per a media report.

This will essentially result in its restaurant partners in these markets paying a higher commission, believes industry expert. In the past, restaurants in larger cities already paid a service fee, or commission, on the gross value of their establishments, while smaller towns and cities paid theirs on the net value.

Restaurant partners and meal delivery platforms bargain for individual contracts based on variables such as order numbers, brand value, and other factors. Essentially, the commission to sell on food delivery services affects a restaurant's overall revenue, which is why it has been a topic of ongoing discussion on Swiggy and Zomato, among other platforms.

Restaurant commissions for Swiggy, generally run from 17 to 25 percent. Payment gateway fees are charged separately by rival Zomato.

The process of Swiggy's confidential IPO application with Sebi has begun. Since becoming public, Zomato's stock has increased significantly on the stock exchanges, with its market capitalization now surpassing USD 27 billion, thanks in part to the success of its quick-commerce company Blinkit. Instamart is a fast-delivery service offered by Swiggy.