Over 1,000 hotel and restaurant owners across Bengaluru are threatening to boycott online food delivery platforms Swiggy and Zomato starting August 15. The widespread protest stems from accusations that the apps engage in practices like silently slashing prices with hidden discounts, charging exorbitant commissions, and making unapproved deductions that severely impact already narrow profit margins.
Restaurant associations in the city assert that these deductions eat into their earnings while they continue to bear all other operational costs, including rent, staff salaries, and raw materials. If the standoff continues, thousands of eateries could go offline from these platforms overnight, significantly altering how many Bengaluru residents order food.
Key Demands from Food Delivery Apps
The restaurant associations have issued a clear ultimatum, seeking a formal, written response from Swiggy and Zomato before August 15. Their demands are focused on addressing several critical issues:
- Cessation of automatic deductions from restaurant payments immediately following a customer complaint.
- Restaurants should not be forced to bear losses for orders canceled after food preparation.
- An absolute freeze on running promotional campaigns and advertising spends without explicit written consent from the restaurant.
- Provision of a comprehensive, itemized monthly settlement report detailing all deductions.
- No implementation of discounts without the explicit consent of the restaurant.
- Allocation of a dedicated relationship manager for individual restaurants to facilitate quick resolution of payment discrepancies.
Impact on Restaurant Profits
According to the restaurant associations, arbitrary commissions, auto-applied discounts, and opaque charges have severely dented their balance sheets. These practices have made it increasingly difficult for establishments to maintain profitability and sustainability.
PC Rao, President of the Hotel and Restaurant Association, stated, "Swiggy must respond appropriately to the problems we are facing. They should stop making arbitrary deductions from our payments, forcing additional discounts, and levying advertising charges. These practices are becoming a burden not only on hotel owners but also on customers."
Rao emphasized that while discussions with the companies are anticipated, the outcome must translate into concrete actions, not just assurances. He affirmed that if the necessary changes are implemented, restaurants would continue their association; otherwise, they are prepared to discontinue their partnership with Swiggy and Zomato.
The impending boycott highlights a growing tension between food delivery platforms and their restaurant partners, with eateries seeking fairer terms and greater transparency in their operational agreements.