Swiggy revises service fee structure for non-metro restaurants: Report

Swiggy is reportedly changing service fees on the gross order value for restaurants outside metro cities as well. 

Previously, restaurants in Tier II cities and beyond were charged a service fee—or commission—based on the net value, whereas those in larger cities were charged based on the gross order value, reported The Economic Times. 

Gross order value includes GST and packaging charges along with the net order value. Charging service fees on gross order value has resulted in restaurants paying Swiggy a slightly larger amount on every transaction.

“Effective 14 August (Wednesday), we shall be charging service fee on the gross value of each order as defined under our merchant terms. This change is being implemented across the platform for all our partners to ensure uniformity in our commission structure. This change will marginally increase the service fee payable to us,” Swiggy said in a letter to its restaurant partners accessed by the publication.  

According to the report, this change is expected to impact around 1,000 or just 0.2% of restaurants out of the 3.5 lakh restaurants listed on its platform.

“The recent communication from Swiggy was intended for a small subset of partners, basis discussions, and is fairly routine as different partners have commercial arrangements based on their needs. We have multiple channels available for partners to discuss all issues with us," clarified Swiggy in a statement to The Economic Times. 

YourStory has reached out to Swiggy with queries.

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Restaurant partners and food delivery platforms negotiate individual contracts based on factors such as brand value, order volumes, and other metrics. These contracts are formalised with individual restaurants rather than being generalised across a region, and are revisited and changed after they lapse. 

“There are no broad changes to Swiggy's commission structure for restaurant partners. Partners will continue to operate under the existing terms of their agreements,” Swiggy added in its statement. 

Sriharsha Majety-led Swiggy, which competes with Zomato in both food delivery and quick commerce spaces, has converted to a publicly listed company ahead of its initial public offering.

In June, US-based asset management firm Baron Capital marked up the valuation of its stake in Swiggy to $109.16 million from its original investment of $76.77 million. It is currently valued at $15.1 billion, nearly 25% higher than the previous assessment of $12.1 billion.