Why Bengaluru restaurants are threatening to quit Swiggy and Zomato
What's the story
Bengaluru's hotel and restaurant associations have threatened to stop accepting orders through leading food delivery platforms, Swiggy and Zomato. The move is likely to come into effect after August 15 if the platforms do not address long-standing issues related to commissions, discounts, and payment deductions. The Bruhat Bengaluru Hotels Association (BBHA) will submit a formal representation seeking corrective action before the deadline.
Commission concerns
Restaurants charged commissions between 8-28%
BBHA President S Subramanya Holla has claimed that restaurants are charged commissions ranging from 8-10% to as high as 28%.
He called these charges "exorbitant," adding that customers eventually pay the price because restaurants can't afford such high margins.
The associations have also demanded transparency in pricing and settlement practices, including detailed statements explaining every deduction.
Compensation claims
Other demands include removal of 1-sided contractual clauses
The restaurant bodies have also demanded compensation when orders are canceled after food has been prepared.
Other demands include 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.
Market disruption
Restaurant owners think new entrants could disrupt the duopoly
The protest comes as competition in India's food delivery market is set to heat up.
Restaurant owners think new entrants like Rapido's Ownly, Flipkart's upcoming food delivery service, and ONDC-based platforms could disrupt the Swiggy-Zomato duopoly if they scale their operations.
BBHA had previously partnered with GrowthFalcons, a seller-side platform on ONDC, to onboard restaurants and hotels onto the government-backed network. But that initiative failed to gain traction.