Swiggy Expands Service Fee Policy to Non-Metro Restaurants, Raising Commissions

Swiggy, the leading food-tech giant preparing for its IPO, has announced an extension of its service fee policy to include the gross order value for restaurants in non-metro areas. This policy adjustment, reported by The Economic Times, will increase the commission charges for its restaurant partners in smaller towns and cities.

Historically, service fees for restaurants outside major urban centers were calculated based on the net value of orders, excluding GST and packaging fees. However, starting August 14, Swiggy will align the fee structure across all regions by charging a service fee based on the gross order value, which includes these additional costs. The company has communicated that this change is intended to create uniformity across its platform.

This update is set to impact approximately 1,000 restaurants, according to industry sources. While Swiggy typically negotiates individual contracts with restaurant partners, this policy will now apply uniformly, leading to a slight increase in the service fees for affected partners. Swiggy’s commissions generally range from 17% to 25%, while its main competitor, Zomato, charges separate payment gateway fees.

A Swiggy spokesperson clarified that the recent policy communication was targeted at a specific group of partners and is part of a standard procedure to ensure consistency. They emphasized that there have been no fundamental changes to Swiggy’s commission structure, and existing agreements with restaurant partners will remain in effect.

The move to standardize the commission structure has sparked debate within the industry, with some viewing it as a necessary step for operational consistency, while others argue it could impose additional financial pressure on smaller restaurants.