Ordering food on Swiggy in non-metro cities to become costlier
Swiggy has revised its service fee policy for restaurants located outside metropolitan cities, as per The Economic Times. The company will now calculate service fee based on the gross order value, which includes Goods and Services Tax (GST) and packaging charges. This change is expected to increase the commission paid by restaurant partners in these areas. Previously, only restaurants in larger cities were charged based on gross value, while those in smaller ones were billed on net value.
Policy change to impact around 1,000 restaurants
The policy change is set to affect approximately 1,000 restaurants. Swiggy clarified this in a letter to its restaurant partners, stating that the service fee would now be charged on the gross value of each order. The company emphasized that this modification aims at ensuring uniformity across all partners in their commission structure, and will slightly raise the service fee payable to them.
Commission structure remains unchanged
Swiggy typically charges a commission ranging from 17% to 25% from restaurants. This is in contrast to its rival Zomato, which levies payment gateway charges separately. Despite the recent policy change, Swiggy has said that there are no broad changes to its commission structure for restaurant partners, and they will continue operating under existing terms of their agreements.
Swiggy's policy change sparks debate
The policy change has sparked a debate due to its potential impact on a significant number of Swiggy's restaurant partners. An executive from a food services company suggested that sustainable strategies benefiting both restaurants and delivery platforms should be considered, rather than increasing commissions/discounts for market share. The commission charged by food delivery platforms like Swiggy and Zomato, is often negotiated individually based on factors such as brand value and order volumes, making it a frequent topic of discussion.
