Zomato adds Rs 5-Rs 20 fee for cash-on-delivery orders

Zomato has begun charging customers Rs 5 to Rs 20 for choosing cash on delivery, adding a new payment-related fee amid intensifying competition. The charge is separate from platform and packaging fees, while online payments remain exempt

New Delhi: Eternal-backed food delivery platform Zomato has begun charging customers an additional fee of Rs 5 to Rs 20 for choosing cash on delivery (COD), as the company seeks to monetise payment methods amid intensifying competition.

The ‘pay on delivery fee’ shown separately in the app’s bill summary appears to be levied on orders where customers opt to pay in cash upon delivery.

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In addition, app screenshots showed the charge commonly at Rs 5, though in some cases users were billed Rs 7 or as much as Rs 20, according to multiple reports.

The fee is separate from Zomato’s platform fee, restaurant packaging charges and GST, while customers who pay online are not charged the COD fee.

Zomato processes an estimated 2.3-2.5 million food orders a day even as new players step up their presence, with Rapido’s Ownly gaining traction and Flipkart piloting its Eat In food-delivery offering.

Zomato’s main competitor, Swiggy, has not introduced a similar fee so far, but it remains to be seen whether the company plans to follow suit.

Food-delivery platforms introduced platform fees in 2023, with Swiggy starting with a Rs 2 charge and Zomato later following suit. Zomato raised its fee to Rs 14.99 per order earlier this year from Rs 12.50, with GST charged separately, and at current order volumes, even small hikes can translate into hundreds of crores in annualised revenue.

Zomato laid off around 250 employees in its latest round of workforce restructuring, a report said in August. The job cuts followed a review of the company’s customer delight operating model and organisational requirements.

As part of the restructuring, Zomato decided to discontinue its Customer Delight operations in Hyderabad and consolidate its remaining in-house operations at a single location in Gurgaon.