Process-backed food tech giant Swiggy has started charging all users a Rs 2 “platform fee” per order, regardless of cart value, as the company seeks to control its costs. The additional charge, initially introduced for users in cities like Bengaluru and Hyderabad, is currently being levied only on food orders and is yet to be introduced on quick-trade or Instamart orders.
According to research, Swiggy is yet to introduce these charges in major cities like Delhi and Mumbai. The platform fee is for food delivery only. Whether they are Swiggy One customers or not, this is different from the handling fee charged on an Instagram order.
While Rs 2 may seem small, it will make Swiggy a company big enough to reinvest in its business as it delivers more than 1.5 million orders per day, analysts said. The fee, which was phased in last week, is likely to be increased in other areas. This is especially helpful for businesses that have fast-tracked their profit margins as investors tighten their purse strings.
The primary reason behind this move is the slowdown in the delivery business.”The company was no exception,” Swiggy CEO and co-founder Sriharsha Majetti said in an email to employees after the company lost 380 jobs.
“Growth in food supply has slowed against our estimates (along with many peer companies globally). While our cash reserves allow us to be fundamentally well-positioned in tough weather conditions, we cannot be a crutch and must identify efficiencies. We are safe in the long term,” Read the email.
