Zomato Hikes Platform Fee To Rs 5, Suspends Intercity Legends Service

Zomato Ltd. has hiked the mandatory platform fee it levies on each order to Rs 5 and also suspended intercity food delivery service called Legends.

The food delivery platform's fee has been tweaked and hiked multiple times since its introduction last in August. It started off Rs 2, with it being hiked to Rs 3 shortly thereafter. The company levied a Rs 4 fee as recently as January before hiking it to Rs 5.

During financial year 2023, Zomato catered about 64.7 crore orders via its platform. A simple Rs 1 hike to its fee structure would mean an additional Rs 65 crore to its topline per annum. However, it was not clear if all cities it operates in has seen a hike in the platform fee.

In its third-quarter results, the Deepinder Goyal-led company's profit increased to Rs 138 crore in the quarter ended December. Shares of Zomato Ltd. have been zooming as brokerages have maintained positive calls on the company after back-to-back profits. BofA Securities had said Zomato's headroom for take-rate increase on the restaurant side will be on account of ad monetisation coming from restaurants and a function of platform fee.

The company has also paused its Intercity Legends service, which enabled users to order dishes on a quick turnaround basis from legendary eateries in other cities. The tab for the service now pushes a note saying "Closed Now. Be back soon."

On the delivery front, Zomato has been coming out with specialised delivery fleets to enhance services. It launched a separate fleet for pure-vegetarian food orders and a large order fleet, designed to handle large orders for a gathering of up to 50 people. It is also set to roll out a special cake delivery fleet with hydraulic balancers in a phased manner across the country.