Key Highlights:
- Zomato has begun charging a separate "pay on delivery fee" ranging from Rs 5 to Rs 20 for cash-on-delivery orders.
- The fee is distinct from the platform fee, packaging charges and GST, and doesn't apply to online payments.
- Zomato processes an estimated 2.3–2.5 million orders daily, with competitors Rapido's Ownly and Flipkart's Eat In gaining ground.
- Swiggy has not introduced a similar COD fee so far.
- The move follows Zomato's August restructuring, which saw around 250 layoffs and consolidation of Customer Delight operations in Gurgaon.
A New Charge for an Old Payment Habit
Eternal-backed food delivery platform Zomato has started charging customers an additional fee for choosing to pay cash on delivery, marking its latest move to extract revenue from payment method choices as competition in the food-delivery space intensifies. The new charge, labelled a "pay on delivery fee" and shown separately in the app's bill summary, appears to apply specifically to orders where customers opt for cash payment at the time of delivery.
How Much Customers Are Being Charged
According to multiple reports, app screenshots show the fee most commonly set at Rs 5, though some users have reported being billed Rs 7 or as much as Rs 20 depending on the order. Importantly, the charge is separate from Zomato's existing platform fee, restaurant packaging charges and GST, and customers who choose to pay online are not subject to it at all, effectively creating a financial nudge toward digital payments.
Why This Fee Makes Strategic Sense for Zomato
Cash-on-delivery orders typically carry higher operational costs for delivery platforms, including cash handling, reconciliation and a greater risk of payment disputes or delivery refusals, compared to prepaid digital transactions. By introducing a targeted fee specifically for COD, Zomato appears to be addressing these underlying cost differentials directly, rather than raising fees uniformly across all payment types. This approach also aligns with a broader industry trend of nudging consumers toward digital payments, which are cheaper to process and settle at scale.
Part of a Broader Monetisation Push
This is not Zomato's first move to monetise incremental parts of the ordering process. The company raised its platform fee to Rs 14.99 per order earlier this year, up from Rs 12.50, with GST charged separately. Given that Zomato processes an estimated 2.3 to 2.5 million food orders daily, even small per-order fee increases can translate into hundreds of crores in additional annualised revenue, making incremental monetisation an attractive lever for the company as it looks to strengthen unit economics.
A Competitive Landscape in Flux
The timing of this fee introduction comes as Zomato faces a more crowded competitive field than in previous years. Rapido's food-delivery offering, Ownly, has been gaining traction, while Flipkart has begun piloting its own food-delivery service, Eat In. Against this backdrop, Zomato's main rival Swiggy has not introduced a similar cash-on-delivery fee so far, raising the question of whether Swiggy will follow suit or instead use the absence of such a fee as a point of differentiation for cash-preferring customers.
A Pattern That Started in 2023
Platform fees themselves are a relatively recent addition to India's food-delivery landscape, first introduced in 2023 when Swiggy began charging Rs 2 per order, with Zomato following shortly after. The steady escalation of these fees since then, culminating in this latest cash-on-delivery charge, reflects how food-delivery platforms have increasingly turned to granular, transaction-level fees to improve margins rather than relying solely on commission structures with restaurant partners.
Context: Recent Workforce Restructuring
The new fee comes weeks after Zomato laid off around 250 employees as part of a workforce restructuring exercise reported in August. The job cuts followed a review of the company's customer delight operating model and broader organisational requirements. As part of this restructuring, Zomato discontinued its Customer Delight operations in Hyderabad, consolidating its remaining in-house operations at a single location in Gurgaon. Taken together, the layoffs and the new COD fee suggest a company actively recalibrating both its cost structure and revenue levers as competitive pressure in the food-delivery sector continues to build.
Key Highlights:
- Zomato has begun charging a separate "pay on delivery fee" ranging from Rs 5 to Rs 20 for cash-on-delivery orders.
- The fee is distinct from the platform fee, packaging charges and GST, and doesn't apply to online payments.
- Zomato processes an estimated 2.3–2.5 million orders daily, with competitors Rapido's Ownly and Flipkart's Eat In gaining ground.
- Swiggy has not introduced a similar COD fee so far.
- The move follows Zomato's August restructuring, which saw around 250 layoffs and consolidation of Customer Delight operations in Gurgaon.
A New Charge for an Old Payment Habit
Eternal-backed food delivery platform Zomato has started charging customers an additional fee for choosing to pay cash on delivery, marking its latest move to extract revenue from payment method choices as competition in the food-delivery space intensifies. The new charge, labelled a "pay on delivery fee" and shown separately in the app's bill summary, appears to apply specifically to orders where customers opt for cash payment at the time of delivery.
How Much Customers Are Being Charged
According to multiple reports, app screenshots show the fee most commonly set at Rs 5, though some users have reported being billed Rs 7 or as much as Rs 20 depending on the order. Importantly, the charge is separate from Zomato's existing platform fee, restaurant packaging charges and GST, and customers who choose to pay online are not subject to it at all, effectively creating a financial nudge toward digital payments.
Why This Fee Makes Strategic Sense for Zomato
Cash-on-delivery orders typically carry higher operational costs for delivery platforms, including cash handling, reconciliation and a greater risk of payment disputes or delivery refusals, compared to prepaid digital transactions. By introducing a targeted fee specifically for COD, Zomato appears to be addressing these underlying cost differentials directly, rather than raising fees uniformly across all payment types. This approach also aligns with a broader industry trend of nudging consumers toward digital payments, which are cheaper to process and settle at scale.
Part of a Broader Monetisation Push
This is not Zomato's first move to monetise incremental parts of the ordering process. The company raised its platform fee to Rs 14.99 per order earlier this year, up from Rs 12.50, with GST charged separately. Given that Zomato processes an estimated 2.3 to 2.5 million food orders daily, even small per-order fee increases can translate into hundreds of crores in additional annualised revenue, making incremental monetisation an attractive lever for the company as it looks to strengthen unit economics.
A Competitive Landscape in Flux
The timing of this fee introduction comes as Zomato faces a more crowded competitive field than in previous years. Rapido's food-delivery offering, Ownly, has been gaining traction, while Flipkart has begun piloting its own food-delivery service, Eat In. Against this backdrop, Zomato's main rival Swiggy has not introduced a similar cash-on-delivery fee so far, raising the question of whether Swiggy will follow suit or instead use the absence of such a fee as a point of differentiation for cash-preferring customers.
A Pattern That Started in 2023
Platform fees themselves are a relatively recent addition to India's food-delivery landscape, first introduced in 2023 when Swiggy began charging Rs 2 per order, with Zomato following shortly after. The steady escalation of these fees since then, culminating in this latest cash-on-delivery charge, reflects how food-delivery platforms have increasingly turned to granular, transaction-level fees to improve margins rather than relying solely on commission structures with restaurant partners.
Context: Recent Workforce Restructuring
The new fee comes weeks after Zomato laid off around 250 employees as part of a workforce restructuring exercise reported in August. The job cuts followed a review of the company's customer delight operating model and broader organisational requirements. As part of this restructuring, Zomato discontinued its Customer Delight operations in Hyderabad, consolidating its remaining in-house operations at a single location in Gurgaon. Taken together, the layoffs and the new COD fee suggest a company actively recalibrating both its cost structure and revenue levers as competitive pressure in the food-delivery sector continues to build.