Zomato Introduces Long Distance Delivery Fee to Offset Operational Losses
Food delivery giant Zomato has rolled out a new "Long Distance Service Fee" for deliveries exceeding a 4 km radius. This move is part of the company’s ongoing efforts to manage rising operational costs and reduce mounting losses, especially in the face of expansion in its quick commerce arm, Blinkit.
New Delhi: Food delivery giant Zomato has rolled out a new “Long Distance Service Fee” for deliveries exceeding a 4 km radius. This move is part of the company’s ongoing efforts to manage rising operational costs and reduce mounting losses, especially in the face of expansion in its quick commerce arm, Blinkit.
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What Is Zomato’s New Long-Distance Fee?
Zomato’s newly introduced charges will apply based on the distance between the restaurant and the customer’s delivery location:
- 4–6 km: ₹15 service fee on orders above ₹150
- Beyond 6 km: ₹25 to ₹35 fee (city-dependent), regardless of order value
These fees are added on top of existing platform and delivery charges.
Why Is Zomato Charging More? The Blinkit Factor
The parent company of Zomato, Eternal, recently reported a 78% drop in Q4 profits, primarily attributed to heavy investments in Blinkit, its quick commerce subsidiary. The company plans to double Blinkit’s dark store count to 2,000 by December 2025, which has significantly inflated operating costs.
Despite the losses, Zomato is aggressively pursuing market share in the hyperlocal delivery space, even if it comes at a short-term cost.
Other Strategic Moves by Zomato
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As part of its revenue-enhancing strategy, Zomato has implemented the following measures:
- Removed rain surcharge exemptions for Zomato Gold members
- Introduced a ₹2 platform fee per order
- Advised restaurant partners to ensure total service charges do not exceed 30% of the order value
These steps aim to optimize revenue per transaction and improve unit economics, especially as competition in food and grocery delivery intensifies.
What Customers Should Know
Customers ordering from restaurants beyond a 4 km radius should now expect a tiered service charge, and the total cost may increase depending on distance and city. While this may affect customer sentiment, Zomato hopes the improved logistics and delivery experience will justify the additional cost.
Market Reaction
Despite the mixed customer reactions, Zomato’s shares rose by 4.20%, trading at ₹237.55 on the NSE at 12:40 PM, indicating investor optimism about the cost-cutting initiatives and long-term profitability.
