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In today’s Finshots, we explain why apps and platforms feel worse over time. Sign up for free masterclass
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Hello folks, you're tuned into Fincharts Daily. In today's episode, we explain why apps and platforms feel worse over time.
But here's a quick side note before we begin. This weekend, we're hosting a free two-day insurance masterclass that helps you build real financial security by understanding health and life insurance the right way. If you'd like to save a spot, do so by heading to the description and registering for free. Alright, now, on to today's study. For the past few days, ordering food online has noticeably become more expensive in India. You may have observed Zmato raising its platform fee from 12.5 rupees to 14.9 rupees per order. Swiggy followed a few days later, taking its fees to 17.58 rupees. A platform fee is something you pay just for using the app. So, even before the food is moving towards you, there's a cost meter running.
Factor in GST and both platforms now charge you the same amount every single time you order. Now, to a regular customer, this might not feel like a big change. But once you step back, you can see a larger pattern at play because it's not just food delivery. Look at a payments app, whichever one you use. There's a good chance that the last time you made a payment, you received a voucher you didn't need or use anytime soon. Shopping apps have also introduced additional charges to run their platforms, often labelled under different names such as marketplace fees. Quick commerce platforms meanwhile are nudging customers towards higher minimum order values and while you're adding groceries to your card, you might scroll past a few ads you definitely didn't come for. Suddenly, apps that were once built for convenience start to feel a little less so.
And that feeling isn't a coincidence, but a part of how these platforms are designed to evolve. In the early days, these apps competed aggressively to capture attention. The interface was clean and frictionless, deliveries were cheap, discounts were everywhere. The goal was simple, get you in and get you to stay. But once they scaled, the equation changed. That's because there's a trade-off hidden inside every app. The cleaner the interface, the less they earn. Every empty space on your screen is space that isn't selling something or nudging you to spend more. And that's Why over time that space starts to disappear. There is actually a term for what's happening here. It's called platform decay. But that's just a polite way to put it.
Because in twenty twenty two, a writer named Corey Docshall coined the term enstitification. To describe exactly this pattern, the way platforms slowly and steadily get worse. It's an ugly word, but that's part of the point. It describes an ugly process. His framework is quite simple. First, a platform is good for its users. That's how it builds audience. Then, once those users are locked in, it starts becoming good to its business customers, that is advertisers and brands. But this comes at the expense of users. And finally, when business customers are locked into, the platform begins extracting value from everyone. Users and businesses alike, so that its profits improve and its shareholders stay happy.
At each stage, it leaves just enough value to keep everyone from walking away. Nothing more. Think about what Zomato and Swiggy looked like when they first showed up. It was a race to the bottom on delivery fees. Deep discounts made ordering in feel almost irresponsible. That wasn't generosity, it was phase one. They used VC money to get you in and keep you there. Subsidizing user behavior to build scale, even if it meant running at a loss for years. Now, once that scale was achieved, the equation had to change, and it always does. And here's a part that often goes unnoticed. It's not just you who gets squeezed. The restaurants on these platforms, the ones who spent years building their presence, training their customers to order through the app, are locked into.
Commission fees have declined. Rankings are influenced by who pays for visibility. This means that a restaurant that built its customer base on the back of a platform now finds itself dependent on that same platform to survive. Platform decay doesn't just worsen the product, it also degrades the broader ecosystem that the platform depends on. And this is what makes it more than just a story about rising platform fees. It's about how platforms quietly manufacture dependency by reorganizing your habits around them. Your go-to-lunch order, default grocery run, and monthly bill payments, all of it now flows through a handful of apps. And the platforms know this. They know how. Little choice you really have. Because the moment you try to imagine doing any of this differently.
You realize that switching cost is much higher than it looks. Besides, what's most striking about platform decay is that the inconvenience is a strategy. Every notch, every extra charge, every voucher you'll never use, none of it is accidental. It's the result of intentional profit-driven design. So is there anything that could change any of this? Well, Doctor R has two answers. Neither are simple, but both are worth looking at. The first is interoperability. The idea is straightforward. You should be able to freely choose your services and stick with them because you like them, not because you can't afford to leave. Think of it like porting mobile numbers. When that rule came in, you could switch your phone carrier and keep your number. Identity portability would work the same way.
Letting users move from one platform to another while taking their data, history and connections with them. This is especially useful for something like a social media account because the moment leaving becomes easy, platforms have to compete again. And competition, more than any corporate promise or design principle, is what keeps platforms honest. The second proposal is less glamorous, but just as important, work apart. Tech workers are often the people best positioned to resist platform decay from within. They're the ones who know what a product used to be, what it could be, and what's actually driving decisions that make it worse. And when they have leverage through unions or whistleblower protections, they can push back. Without that, the only voice left in the room belongs to the people optimizing for quarterly numbers.
But there's only so much these ideas can do in practice. They might work for some platforms, but not all. Take interoperability. For shopping, payments or food delivery apps, it only works if there are enough meaningful alternatives. And those alternatives can only exist if the regulatory environment allows it. In India, though, most markets settle into duopolies, especially in consumer-facing services. Jio and Airdrop, Indigo and Air India, Amazon and Flipkart, Phone Pay and Google Pay, Swiggy and Zomato, Blinket and Instamart. The list is long. Now, you could argue that this is just how markets evolve. Network effects and economies of scale reward the big. Players, the more people use a service, the more valuable it becomes, pulling in even more users.
But there's more to it. Compliance burdens like KYC and consumer protection rules are far easier for large, well-capitalized firms to handle, raising barriers for startups. Then, there are sector-specific regulations such as telecom licenses, airline safety norms, fintech rules, which incumbents can influence in ways that look neutral but are hard for new entrants to meet. And by the time regulators step in, markets are often already concentrated, which means that new players aren't entering the level field they're trying to break into entrenched geopolies. So, if you really want to tackle end certification in India, the conversation has to go beyond platforms and look at how markets are structured. There's also a more immediate level, dark patterns. These are deceptive UI UX designs that nudge you into buying something, signing up,
or sharing personal data without intending to, like a limited-time discount that keeps resetting itself. Regulators should go after hidden fees, manipulative defaults, and misleading prompts, not just to consumers but to slow platform decay. Problem though is that platforms keep finding new ways to do this, so there's no single rulebook that can fully contain it. Sharp, there's the National Consumer Helpline in case of last resort, but if you've used it, you know how it plays out. Companies can close complaints without fully resolving them, and once that happens, you can't reopen the issue. Your only option is consumer court, which is often a long, tiring road for most people. Which is why even the basics of how complaints are handled and how accountability works need fixing if any of this is going to change. For India specifically, this matters since we're not at the end of the story. We're somewhere in the middle of it.
Platforms here aren't done scaling, but there's no denying that this is also a country with a regulator that has moved quickly on payments, with a government that has strong opinions about data and digital infrastructure, and with nearly a billion users whose habits are still being formed. So yes, the next time you pay a platform fee you didn't notice, or scroll past an ad to find what you came for, or get nudged toward a minimum order you didn't need, remember, that's not a glitch, that's the model working exactly as intended. The question isn't whether you noticed it or not, it's whether enough people notice at the same time. Alright folks, I'll see you in the next one. Thank you for listening to today's episode. And if you want to share your feedback or suggestions, do drop us an email to [email protected]. Until next time.
Page updated November 10, 2026 · transcript and summary are machine-generated
