Swiggy, one of India’s leading food delivery platforms, is gearing up for its IPO launch and has recently made significant changes to the service fees charged to its restaurant partners. In a move that affects eateries outside metro cities, Swiggy will now charge service fees based on the gross order value (GOV), which includes GST and packaging charges. This change means that restaurant partners will have to pay a higher commission to Swiggy.
How Was the Service Fee Structure Before?
Previously, Swiggy charged service fees based on the net order value for restaurants located in smaller towns and cities, while those in larger metro areas were charged based on the gross value.
However, starting August 14, Swiggy has unified its commission structure across the platform, meaning all restaurant partners, regardless of location, will now be charged service fees based on the gross order value.
What Impact Will This Change Have?
This new rule by Swiggy will increase the service fees that restaurant partners need to pay. The change is expected to affect around 1,000 restaurants in smaller towns and cities.
Swiggy has communicated this update to its restaurant partners through a letter, stating that the adjustment is intended to bring uniformity to the commission structure across the platform, resulting in a slight increase in service fees.
Why Was This Change Made?
Swiggy explains that the revision was made to ensure consistency in how service fees are structured across the platform. By doing so, the company aims to ensure that all restaurant partners are charged equally, regardless of their location.
With this change, restaurant partners will now have to pay service fees based on the gross order value, which includes GST and packaging charges. This means that their overall commission payments to Swiggy will increase, impacting their profit margins.
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