Zomato Introduces New Cash on Delivery Fee Amidst Rising Competition

Zomato's New Fee Structure

New Delhi: Zomato, the food delivery service backed by Eternal, has started implementing an extra charge ranging from Rs 5 to Rs 20 for customers opting for cash on delivery (COD). This move is part of the company's strategy to monetize payment options as competition in the market intensifies.

The newly introduced 'pay on delivery fee' is clearly displayed in the app's billing summary and applies specifically to orders where customers choose to pay in cash upon delivery.

Screenshots from the app indicate that the fee is typically set at Rs 5, although some users have reported charges of Rs 7 or even up to Rs 20, as per various sources.

This fee is distinct from Zomato's platform fee, restaurant packaging costs, and GST, and customers who opt for online payments are exempt from this COD charge.

Zomato handles approximately 2.3 to 2.5 million food orders daily, even as new competitors like Rapido’s Ownly and Flipkart’s Eat In food delivery service are emerging.

Currently, Zomato's primary rival, Swiggy, has not adopted a similar fee structure, leaving it uncertain whether they will implement such charges in the future.

In 2023, food delivery platforms began introducing platform fees, with Swiggy initially charging Rs 2, followed by Zomato increasing its fee to Rs 14.99 per order from Rs 12.50 earlier this year, with GST applied separately. Given the current order volumes, even minor fee increases can lead to substantial annual revenue gains.

In August, Zomato reportedly laid off around 250 employees as part of a workforce restructuring initiative. This decision followed a review of the company's customer service model and operational needs.

As part of this restructuring, Zomato has chosen to shut down its Customer Delight operations in Hyderabad and centralize its remaining in-house functions at a single site in Gurgaon.