Bengaluru restaurants warn of Swiggy, Zomato boycott after Aug 15 over commissions
Bengaluru's hotel and restaurant associations have told Swiggy and Zomato to address concerns over commissions, discounts and deductions by August 15. The groups say they could stop accepting orders through the platforms after the deadline if no written response or corrective action follows.
Hotel and restaurant associations in Bengaluru have warned that restaurants across the city could stop accepting orders through Swiggy and Zomato after August 15 if the food delivery platforms fail to address long-standing concerns over commissions, discounting practices and payment deductions.
Restaurant bodies, including the Bruhat Bengaluru Hotels Association (BBHA), have decided to give the two platforms until August 15 to respond to their demands. They plan to submit a formal representation seeking corrective action and a written response before taking any further steps.
"We have asked the online aggregators to streamline their commission structure and given them time until August 15. If there is no resolution, we will boycott the platforms," BBHA President S Subramanya Holla told Moneycontrol.
WHY ARE RESTAURANTS PROTESTING?
Restaurant owners say commissions charged by food delivery platforms have become unsustainable.
According to BBHA, commissions range from 8-10% to as high as 28%, besides additional charges for advertising, payment gateways and app visibility. The associations argue that these deductions significantly reduce restaurant earnings, especially for smaller businesses.
Holla said restaurants do not have margins of 28%, forcing many of them to increase menu prices to recover platform charges. He claimed that to realise Rs 100 after paying commissions, some restaurants may have to raise menu prices by as much as 43%, ultimately increasing costs for customers as well.
WHAT ARE RESTAURANTS DEMANDING?
The restaurant bodies have sought greater transparency in pricing and settlement practices.
Their key demands include an end to automatic payment deductions following customer complaints, compensation when orders are cancelled after food has already been prepared, detailed settlement statements explaining every deduction, removal of one-sided contractual clauses, and dedicated relationship managers for restaurant partners.
They have also objected to discount campaigns and promotional offers being introduced without the consent of restaurants, arguing that such initiatives hurt their profitability.
PC Rao, honorary president of BBHA, told Moneycontrol that commissions, advertising expenses, payment gateway charges and other deductions have made it increasingly difficult for restaurants to reconcile settlement statements and understand how much they actually receive after each order. He said smaller establishments have been the worst affected.
NEW FOOD DELIVERY PLAYERS CHANGE THE EQUATION
The protest comes at a time when competition in India's food delivery market is expected to intensify.
According to the report, restaurant owners believe new entrants such as Rapido's Ownly, Flipkart's upcoming food delivery service and ONDC-based platforms could offer viable alternatives to the Swiggy-Zomato duopoly if they are able to scale their operations.
Arun Adiga, Managing Partner of Bengaluru's iconic Vidyarthi Bhavan, said marketing, execution and last-mile delivery would determine whether these new players can succeed, adding that increased competition could benefit restaurants.
Holla dismissed suggestions that the proposed boycott was linked to the arrival of new players. Instead, he said the association was seeking a more competitive market.
He pointed out that Rapido's Ownly currently operates on a zero-commission model, while Flipkart is expected to charge around 11% when it launches its food delivery service. "Those rates are acceptable, although it will take time for them to scale," he said.
Despite the warning, the association said it is not asking restaurants to immediately move away from Swiggy and Zomato, acknowledging that the two platforms continue to have the largest customer base.
Instead, restaurant bodies hope the companies will respond before August 15 and address their concerns over commissions, discounts and payment practices. If no agreement is reached, restaurants across Bengaluru could stop accepting orders through the platforms after the deadline, potentially disrupting one of India's biggest food delivery markets.