🍽️ Service Fee Policy Shift
On August 14, Swiggy extended its service fee policy to include gross order value for non-metro restaurants. This adjustment means the fee now covers GST and packaging, leading to higher commissions. Previously, only restaurants in larger cities were subject to gross value-based fees, while smaller cities had net value-based fees. Swiggy, which typically charges commissions ranging from 17-25%, now applies this policy to about 1,000 restaurants across non-metro regions.
🏙️ Affected Restaurants Speak Out
This change impacts roughly 1,000 non-metro restaurants. A Swiggy spokesperson noted, "Contracts are usually tailored, but this update is for 1,000 partners." Restaurant owners expressed concerns about rising costs, noting that these increases could impact their income. "It would be wise to consider strategies that benefit both restaurants and platforms," said an executive from a food services company.
📊 Standardization Sparks Debate
Swiggy's move aims to standardize commission structures across its 350,000 restaurants, aligning non-metro and metro areas. However, this has sparked debate among restaurant partners. While Swiggy claims there have been no broad changes, restaurant owners worry about the long-term effects of rising commissions. Critics argue that simply increasing fees may not yield sustainable market share gains.
💳 Swiggy UPI Enhances Payments
Alongside the fee change, Swiggy introduced a UPI Plug-in for faster payments, branded as Swiggy UPI. This feature, powered by NPCI and Juspay, reduces transaction time from over 15 seconds to just five. This enhancement comes as Swiggy prepares for its IPO, seeking to streamline its services while managing commission-related controversies. The new payment system may alleviate some concerns, though the fee hike remains a focal point for restaurant partners.
How will higher fees impact smaller restaurants?
