Zomato And Swiggy Fleece You For Food Delivery, But How Much Is Too Much?

Today, the ease of ordering food online is something that no Indian is a stranger to. Whether it's biryani at midnight, sushi on a Sunday, or a plate of hot samosas on a rainy afternoon, food of almost any cuisine around the world is now just a few taps away.

Back in 2008, when Zomato was launched as FoodieBay, it was simply a restaurant listing website. Renamed in 2010, and eventually expanding into food delivery by 2015, Zomato transformed into a full-fledged food-tech ecosystem.

Six years after Zomato was launched, Swiggy entered the game, and what followed was a cultural shift. Ordering food, groceries and even medicines to your doorstep became second nature for millions of Indians.

But as the convenience became addictive, so did the questions: what exactly are we paying for? And how much is too much for that convenience?

The Viral Frustration

As more and more people have started ordering food online, more people are finding problems with these apps. Viral posts on X have highlighted the steep mark-ups customers face when ordering via food delivery apps compared to buying directly from the restaurant.

For instance, one user recently wrote about a huge gap in prices in restaurants. Tagging Swiggy, the user said, "Why does ordering food in the app 81% more expensive than buying the same food from the same outlet, just 2 kms away. Is this the real cost of convenience? The extra that I have to pay to get the food delivered is INR 663. (sic)"

Another tweet broke down the math in a post yesterday (September 8):

These complaints are not isolated. X is filled with a plethora of people complaining about the gap between what you pay at the counter and what you pay on the app. For restaurants, this is not about fleecing customers but survival in a model where commissions and platform fee mount to this price hike.

Why Restaurants Sign Up Anyway

For restaurants, especially smaller ones or new brands, the choice is less about margins and more about visibility.

Shreya Kapoor, Co-founder of Masala Synergy, explains, "When we started out as a cloud kitchen in DLF Phase 1 (Gurugram) and GK (New Delhi), it was essential to be on aggregator platforms. They are the primary customer discovery channels today and without them, delivery is practically impossible. Listing on Swiggy and Zomato gave us speedy access to a large base of customers and helped build awareness around our brand."

Her view echoes that of many restaurateurs that NDTV spoke to, who see the apps not just as delivery channels but as marketing platforms. Even for their other outlet which is known for their fine dining, she says skipping Zomato and Swiggy was not possible.

"While IFC is an experiential dine-in destination, we also wanted guests to experience our food at home. We see ourselves as a food-first brand before being an experiential brand, so offering delivery from IFC was a natural extension," she says.

Similarly, Anuj Wadhwa, Co-founder of Pindi, an Indian food restaurant that opened in 1948, pointed out the discovery element, "We saw these platforms as a way to tap into a much larger customer base. Swiggy and Zomato provide visibility and discovery, especially for customers who may not have heard of us otherwise. For us, it's also a way to introduce new audiences to our food, which can translate into increased footfall at the restaurant over time."

In other words, while restaurants might lose out on commissions, they gain customers they would never otherwise reach.

What The Charges Look Like

The real sticking point lies in the cost structures restaurants face when they sign up. The breakdown, as described by several restaurateurs, shows why menus online almost always look inflated compared to offline.

Shreya Kapoor explains, "The commercial structure is broadly similar across both platforms. Delivery commissions usually range from 20-25% of the order value. Marketing spends, though optional, are significant and typically add another 5-12% (when the restaurant shows up as 'sponsored' on the app). While there are some nominal fixed charges, the bulk of the cost comes from commissions and marketing."

Mandeep Singh, Managing Director of Delhi-based Arabian Delites, known for authentic Lebanese food, points out, "Swiggy charges slightly less than Zomato, which can go above 27-28%. On top of that, an 18% GST is applicable. Restaurants can't match the scale of delivery fleets that Swiggy and Zomato have."

He adds that though prices are typically inflated by 10-15% to offset these costs, instances of restaurants charging 80% more, like mentioned in viral cases, are extremely rare.

Swiggy was launched in 2014. Photo: Unsplash

Pankaj Deokar, VP - Operations at Kamats Legacy, further details the fee structure: "Commissions can range from 18% to 28%, varying by brand. In addition, there's an 18% GST on both commissions and gateway fees. Payment gateway charges themselves are about 2.5% plus GST per order. To make matters worse, platforms also impose fines, penalties for cancellations, and other additional charges."

To understand better, we looked at the offline menu of a local Delhi NCR restaurant, and matched it with Swiggy And Zomato.

• Here, a regular thali is priced at Rs 110, while on Zomato it is listed at Rs 149.
• Similarly, their special thali is marked at Rs 220 offline, but on Zomato the price goes as high as Rs 330 (that's more than a 50 per cent hike).

The price difference. Photo: Zomato

How This Impacts Customers

These commissions trickle down to the final consumer bill.

Restaurants mark up their online menus to absorb aggregator charges, and in some cases, platforms themselves push for discounts to lure customers. However, it really depends on the restaurant owners. 

Deokar explains, "Menu prices on online platforms are marked up, taking into account the commission, GST, and gateway charges. Over and above the mark-up prices, the online platforms want discounts of 20-40% for attracting business. In case the customers contact restaurants directly, they definitely get the lower price, no platform fees, and better margins for restaurants."

Anuj Wadhwa however says, "We strive to maintain transparency and consistency, so our menu prices remain the same across both online platforms and in-house dining. However, to incentivise direct orders, we offer a flat 15% discount for takeaways and home deliveries placed directly with us."

Singh also admits they and most resturants charge 10-15% extra on Swiggy or Zomato to absorb commission losses. 

In short:

Inflated prices + GST on inflated prices + Platform fees + GST on platform fees + Delivery charges + Resturant packaging charges + GST on restaurant packaging charges = What we end up paying if we are using these apps.

(GST goes to the government, not Zomato)

Convenience Vs Cost

For customers, this creates a paradox. Delivery apps promise the convenience of time and effort saved, but the cost of that convenience is no longer negligible.

Those viral posts questioning why a simple juice or thali could cost 70-100% more online are sparking a bigger conversation. With delivery fees, surge charges, platform fees, packaging costs, and tips, the Rs 260 bill at the counter can easily balloon to Rs 551 on your phone.

The irony is, even restaurants agree direct orders are better for both sides. Customers save money, and restaurants keep more of their margins. Yet, the scale and reach of Swiggy and Zomato mean they remain indispensable.

So, how much is too much when it comes to paying for food delivery?

That depends on who you ask. For a tired office-goer on a Friday night, paying Rs 663 extra for convenience may still be worth it. For someone who lives 2 km away from their favourite outlet, it feels like daylight robbery.

Restaurants, meanwhile, are caught in the middle. As Shreya Kapoor puts it, "Working with aggregators does involve commissions, which naturally influence margins. But aggregators add tremendous value by providing reach, discovery, and convenience for the customer. The trade-off is worthwhile because it allows more people to enjoy our food in the comfort of their homes."

'This Fee Helps Us Keep The App Running Smoothly'

NDTV reached out to Swiggy, who declined to comment on this matter.

However, a Zomato spokesperson shares, "Every order placed on Zomato supports a network of efforts that work together to make the experience seamless, for customers, restaurant partners, and delivery partners alike.

"In terms of the various charges, food and packaging prices are set entirely by our restaurant partners. In return, we charge a commission that reflects the value we offer, including access to a wide customer base, delivery logistics, marketing, and operational support.

"When it comes to delivery, a fee, wherever applicable, helps us in ensuring fair compensation for our delivery partners for their time and effort.

"Additionally, we charge a platform fee on all orders. This fee helps us keep the app running smoothly, invest in product improvements, and continue delivering a smooth and convenient experience for our users. GST is applied as per government regulations and the restaurant's confirmation."

Bottomline

The convenience economy thrives on such trade-offs. For now, Swiggy and Zomato aren't going anywhere, and neither are the complaints. The real question is whether India's love for convenience will continue to outweigh its growing discomfort with inflated bills.