Zomato Pauses Intercity Deliveries and Increases Platform Fee By 25% to Rs 5

Food Will Expense More on Zomato: The online food delivery service Zomato has increased its platform charge to Rs 5 per order, a 25% increase. Food delivery services levy a set cost called a “platform fee” to all of their clients for all orders. Zomato decided to increase its margins and turn a profit in August 2023, thus, it reinstated the Rs 2 platform charge. The cost was then raised by the firm to Rs 3 and then to Rs 4 on January 1. On December 31, it had temporarily increased the platform cost to Rs 9.

Analysts projected that the platform fee increase would partly offset the effect of GST on delivery prices, given the favorable reaction of the company’s share price to the news in January.

Every year, Zomato fulfills between 85 and 90 crore orders. There might be a positive effect on EBITDA of around 5 percent, or Rs 85–90 crore, from an increase in each Re 1 convenience charge across all regions. Unfortunately, as of right now, this raise only applies to a few cities.

Legends Intercity Service Put on hold

The business has suspended its Intercity Legends service, which lets consumers in distant cities place orders with renowned eateries in big cities. The Zomato app’s “Legends” page states, “Enhancements are underway,” when you click on it. Stay tuned, as we will be returning to serve you shortly.

Zomato is said to fulfill between 85 and 90 crore orders a year. Zomato revealed a 30 percent year-over-year increase in adjusted revenue for the December quarter.

A GST demand and penalty order of Rs 11.81 crore for the months of July 2017 through March 2021 was recently received by the company. The ruling is divided into a penalty of the same amount and a GST demand of Rs 5.9 crore. The directive was given by the Central Goods and Services Tax Additional Commissioner, Gurugram, and applied to export services that Zomato supplied to its overseas companies between July 2017 and March 2021.