Food delivery platform Zomato has introduced a new charge for customers who choose to pay for their orders using cash on delivery (COD). Dubbed the "Pay on Delivery Fee," this additional cost is applied when users select cash over online payment methods.
Understanding the New Zomato Cash Payment Fee
The new fee is not a fixed amount and appears to vary based on the order value. While Zomato has not publicly confirmed the exact calculation, user reports suggest it could be around 2% of the order value, capped at approximately ₹30. For instance, one user's bill showed a ₹21 fee on an ₹850 order, aligning with a 2% calculation.
This charge is itemized separately on the bill, adding to the total payable amount. Customers are advised that choosing online payment options can help them avoid this new fee.
Context of Zomato's Evolving Fee Structure
The introduction of the "Pay on Delivery Fee" marks another step in Zomato's strategy to enhance revenue through additional charges. Over recent years, the company has steadily increased its platform fee, which started at ₹2 in 2023 and has incrementally risen to ₹14.99 per order today, excluding GST.
These fees contribute to the overall cost of food delivery, which already includes potential delivery charges, restaurant packaging fees, and Goods and Services Tax (GST). Unlike Zomato, its primary competitor, Swiggy, has not yet introduced a similar cash-on-delivery charge.
Zomato's Business Evolution
Founded in 2008 as FoodieBay, a restaurant discovery platform, Zomato rebranded in 2010 and expanded into food ordering and delivery by 2015. The company significantly grew its market presence, notably acquiring Uber Eats' India business in 2020. The addition of new fees reflects an ongoing effort by food-delivery companies to monetize their extensive customer bases more effectively.