Swiggy, the online food delivery startup, has started charging users a “platform fee” of Rs 2 per food order, irrespective of the cart value.

The fees currently only apply to food delivery orders placed on Swiggy in a few major cities and would not be levied on Instamart users. The platform charge is primarily used to maintain and create new features for the platform as well as to keep it in excellent working order. This cost is comparable to what many websites that sell movie and airline tickets charge as a convenience fee for reserving seats and tickets. 

The platform fee is a nominal flat fee charged on food orders. According to a Swiggy official, this fee supports running the platform, enhancing app features, and providing a flawless app experience.

Food delivery orders will now be subject to an additional fee at a time when consumer Internet platforms are under pressure to cut costs and expand with profitability as a primary goal. Late-stage ecosystems are experiencing a funding crisis, which has forced firms to lay off staff members and end non-profitable projects.

Swiggy launched a restructuring exercise in January that resulted in at least 380 job cuts during an urgent town hall meeting. As a cost-saving measure, Swiggy also decided to close its meat delivery marketplace. In November 2022, Zomato, a competitor of Swiggy, let go about 3% of its 3,800 employees. 

As a private firm, Swiggy has established itself as a formidable rival to Zomato, particularly following its May 2022 acquisition of restaurant discovery and reservation site Dineout for $120 million.

In January 2022, Swiggy’s Instamart service in the supermarket delivery sector has exclusively acquired significant finance worth $700 million sponsored by investment firm Invesco. Following this funding, Zomato also paid $570 million to buy the grocery delivery app Blinkit, although there had been rumours of the deal since early 2022.

According to a previous report, Swiggy stated that during the day, it processed between 1.5 and 2 million orders. The company regularly onboards roughly 10,000 eateries per month and has over 2.5 lakh restaurant partners enabled on its network.