Zomato has started charging some customers an extra ₹5, ₹10 or ₹21 for cash-on-delivery orders. The amount may look harmless, but this is probably less about recovering the cost of handling cash and more about finding out how much more a customer is willing to pay.
Zomato has done this before. It started testing a ₹2 platform fee in 2023. The base fee is now ₹14.90 before GST, or about ₹17.6 after tax. Customers complained, but orders continued. That gave Zomato room to keep increasing it.
Cash does cost more to handle. Riders have to collect money, the company has to reconcile it, and there is some collection risk. Swiggy disclosed that cash orders made up 13.3% of its food delivery and quick-commerce orders in FY24.
But if cost recovery were the only aim, Zomato could simply charge a fixed ₹5. Reports of fees ranging from ₹5 to more than ₹20 suggest it may be testing different prices across customers and order sizes.
The money can add up quickly. Zomato handles roughly 2.4 million food orders a day. If 13% are paid in cash and the average fee settles at ₹8-10, this could generate about ₹90-120 crore a year. Since collecting this fee adds almost no extra delivery cost, most of it should fall straight to the bottom line.
For comparison, Zomato’s food delivery business reported ₹606 crore of adjusted EBITDA in Q1 FY27. A ₹100 crore annual fee pool is meaningful.
There is another advantage. If a customer refuses to pay the COD fee and switches to UPI, Zomato still wins. It saves on cash collection and reconciliation. The customer either pays more or becomes cheaper to serve.
The risk is that customers are already paying restaurant mark-ups, packaging charges, delivery fees and platform fees. Another ₹10 may not make someone uninstall Zomato, but it may make them order six times a month instead of eight.
That is where competition matters. Rapido’s Ownly is trying lower commissions and simpler pricing. Flipkart is experimenting with food delivery through ONDC. Swiggy has launched Toing for more price-sensitive users.
If the COD fee works, Swiggy is likely to follow. Then we should expect more small-order fees, priority delivery charges, peak-hour pricing and costlier membership plans. But there is a limit to how much a food order can be sliced into separate charges.
Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.
“Aapki Selection Ho Gayi”: Google Picks Four Indian Startups
Google has picked four Indian startups, Terrastack, Varaha Climate, Farmers for Forests and Climitra Carbon, for its AI for the Planet Accelerator.
They join 16 APAC startups using AI to tackle environmental challenges.
Read more here
“Ram Naam Japna Paraya Maal Apna”: Deepinder Goyal Partners With Art of Living
Eternal founder Deepinder Goyal’s Temple is teaming up with Sri Sri Institute for Advanced Research to study meditation’s physiological effects.
The research will use Temple’s proprietary Entropy biomarker to measure the impact of different practices.
Read more here
“Babuji Zara Dheere Chalo”: Moneyview Cuts IPO Size
Moneyview has cut its IPO size after SEBI’s nod, halving the fresh issue to ₹750 Cr.
The fintech unicorn has also trimmed its OFS component to 10.04 Cr shares.
Read more here
“Lo Chali Mai”: IPO-Bound InsuranceDekho’s Cofounders Mull Move To Promoter Roles
InsuranceDekho founders Agrawal and Babbar are reportedly in talks to exit over strategic differences with the board.
The IPO-bound insurtech may see the duo shift to promoter roles as professional management takes charge.
Read more here
“Kuch Naya Ho Jaaye”: SquadStack Introduces Outcome-Based Pricing For Voice AI
Voice AI platform SquadStack has introduced outcome-based pricing for its AI sales agents.
It will now link fees to revenue generated, starting with banking and financial services.
Read more here
“Mubarakan Ji Mubarakan”: BonV Aero Named GENIUS NY finalist
Indian deep-tech startup BonV Aero has been named among five finalists for Round 10 of GENIUS NY.
The selection supports its US expansion plans, after it previously secured $1.6 Mn from Tim Draper.
Read more here
“Janmo Ke Saathi”: Bounce Partners With ONDC For EV-Led Logistics
Bounce has partnered with ONDC to boost EV-led last-mile delivery across India.
The network currently connects 50+ logistics providers, 60K merchants and 1.5 lakh delivery partners.
Read more here
“Kuch Daring Karna Hai”: Paisabazaar, Federal Bank Launch Grocery Cashback Card
Paisabazaar and Federal Bank have launched a new RuPay credit card offering up to 7.5% cashback on grocery spends.
It also offers 1% cashback on regular transactions and 0.5% on eligible UPI spends above ₹2,000.
Read more here
“Humko Tumse Ho Gaya Hai Pyaar”: Lenskart Increases AjnaLens Stake
Lenskart has raised its stake in XR startup AjnaLens to 9.01% with an additional ₹8 Cr investment.
The move deepens its push into AI, XR and smart eyewear.
Read more here
“Aaiye Aapka Intezaar Tha”: Info Edge Appoints Director And CFO
Info Edge has brought in former Adobe India MD Naresh Chand Gupta as an independent director.
Himanshu Agarwal will take over as the company’s new CFO.
Read more here
Kissht parent OnEMI is eyeing a fresh fundraise, just after its ₹926 Cr IPO. The board will meet on September 17 to consider convertible securities.
Read more here
Furnishka is raising ₹26.8 Cr in an extended pre-Series A round. PhysicsWallah founders and Udaan’s Sujeet Kumar are among the backers.
Read more here
Fashion startup UniqYou has raised ₹15.8 Cr in seed funding at a ₹64 Cr valuation. Arkam Ventures and Antler led the round.
Read more here
Indic Wisdom has received ₹5 Cr from Satin Growth Alternatives, the alternative investment subsidiary of Satin Creditcare Network.
Read more here
