The Hidden Costs in Your Order
For years, the business model of food aggregators like Swiggy and Zomato has been straightforward for the customer but complex behind the scenes. Restaurants list their menus on the app to reach a vast customer base, and in return, the platforms take
a significant cut, known as a commission, from every order. This commission is the central point of contention. While advertised rates may sound reasonable, the actual deductions are often much higher. Commissions can range from 18% to over 28%, and once you add GST on the commission, payment gateway fees, and other promotional charges, the total deduction can approach 30-40% of the order value.
Restaurants at Breaking Point
For restaurant owners, these high commissions are becoming unsustainable. Many operate on thin profit margins to begin with, and handing over a quarter or more of their revenue on every delivery order can wipe out any potential profit. The National Restaurant Association of India (NRAI) and other local bodies have repeatedly raised alarms, accusing platforms of anti-competitive practices like forcing restaurants into deep discounting schemes, masking customer data, and charging for advertising just to remain visible on the app. This long-simmering tension has recently escalated, with restaurant associations in cities like Bengaluru threatening to boycott the platforms altogether if their grievances aren't addressed.
The Aggregator's Side of the Story
From the perspective of delivery platforms, the high commissions are a necessity to run a complex and expensive operation. These fees fund everything from the technology of the app itself to the massive logistics network of delivery partners, marketing to attract millions of users, and customer support. Faced with immense pressure from investors to achieve profitability, these companies argue that the commissions are essential to sustain their business model. They provide restaurants with access to a market they could never reach on their own, handling the difficult logistics of delivery and payment processing. The platforms see themselves as partners driving significant sales volume to restaurants, which justifies the fees they charge.
How the Fight Lands on Your Bill
So where does the customer fit into this three-way tug-of-war? Increasingly, right in the middle. Unable to lower commissions for restaurants yet needing to improve their own finances, platforms are finding new ways to generate revenue directly from the user. This is manifesting as new or increased 'platform fees', 'convenience fees', or other surcharges that are added to the customer's bill. In other cases, restaurants themselves are raising their menu prices on the apps — sometimes by 10-15% — to offset the high commissions they have to pay. Either way, the era of heavily subsidized, artificially cheap delivery is fading, and the true cost of convenience is now being reflected on the customer's checkout screen.
The Search for an Alternative
The growing dissatisfaction is forcing both restaurants and consumers to look for alternatives. Restaurants are increasingly encouraging customers to order directly through their own websites or phone numbers, often offering discounts for doing so. This allows them to bypass the hefty commissions and regain control over their customer relationships. Some are turning to newer platforms that offer commission-free services for a flat fee. For customers, this might mean a future where ordering from a platform is one of several options, each with a different price point. The most convenient option may no longer be the cheapest, forcing a re-evaluation of how much we're willing to pay for having food brought to our door.
