Zomato has increased its platform fee to Rs 12 per order across all cities where it operates, marking a 20% increase from the previous Rs 10. This decision arrives as the festive season approaches, a period typically associated with a surge in demand for food delivery services.

This adjustment follows a pattern of Zomato increasing its platform fees, with a prior increase from Rs 6 to Rs 10 per order before the festive season last year. Rival Swiggy had also experimented with a Rs 14 platform fee at select locations last month due to increased demand.

Zomato and Swiggy's moves come as both companies face financial pressures due to investments in quick commerce. Zomato's parent company, Eternal Ltd., reported a 90% year-on-year drop in consolidated net profit for the quarter under review, even as revenue rose 70%. Swiggy's losses doubled during the same period due to increasing investments in its Instamart operations.

Furthermore, both companies face increasing competition from new entrants like Rapido's Ownly, which offers lower commission rates to restaurants.

The increased platform fees may help offset some of these financial pressures during the high-demand festive season. According to sources familiar with the matter, the hike will be rolled back once demand cools down.

The market response to Zomato's fee hike has been minimal, with Eternal's share price slightly decreasing by 0.18% to Rs 322.85.