3 weeks ago
Food platforms agree to restaurant-approved discounts to avert boycott
Two big food apps, Swiggy and Zomato, help people order food from restaurants in Bengaluru.
The apps sometimes put restaurants into discount deals without asking the restaurant first.
Then the apps took money out of the restaurants' payments to cover those discounts.
Restaurants were not happy, so their groups said they might remove restaurants from the apps on August 15.
The apps then promised to ask restaurants for permission before running discounts that the restaurant pays for.
Because of that promise, the restaurant groups agreed to wait until September 1.
The apps have until August 31 to make the changes.
Zomato agreed first, and Swiggy agreed a few days later.
There are still some arguments about extra fees and a budget app called Toing that need to be sorted out.
Swiggy and Zomato agreed to seek a restaurant's approval before running restaurant-funded discounts, averting a boycott threatened by Bengaluru hotel bodies.
The associations had threatened to take the city's restaurants off the delivery apps from August 15, a deadline now deferred to September 1.
Restaurants alleged the platforms enrolled them into promotional campaigns without consent and recovered the cost from their payouts.
Zomato agreed to opt-in campaigns with OTP approval and outlet-by-outlet review of past deductions; Swiggy agreed to refund charges for unapproved campaigns and sign an MOU with industry bodies.
BHA president P C Rao warned that if remaining demands, including separate consent for Swiggy's budget offering Toing, are not met by August 31, the association will switch off the app.
- Who
- Swiggy, Zomato, the Bangalore Hotels Association (BHA), Karnataka State Hotels Association, National Restaurant Association of India, and Bengaluru's bar and restaurant associations.
- What
- The platforms agreed to obtain restaurant approval before running restaurant-funded promotional discounts and to refund disputed charges, averting a planned boycott.
- Where
- Bengaluru, India.
- When
- The boycott deadline was deferred from August 15 to September 1, with platforms required to implement changes by August 31.
- Why
- Restaurants objected to unauthorised promotional campaigns and disputed deductions from their payouts.
Restaurant Associations
Delivery Platforms
Discount Campaign Consent
Restaurant Associations
Platforms must obtain explicit opt-in consent (for example via OTP) before launching any promotion, and every renewal or extension must get separate approval.
Delivery Platforms
Platforms previously enrolled restaurants automatically and recovered campaign costs from payouts; both platforms have now agreed to the opt-in requirement.
Fees and Deductions
Restaurant Associations
Only agreed commissions and statutory charges should be deducted, with service charges on the food component excluding GST; levies such as long-distance, payment collection, Swiggy One and Bolt fees are unauthorised.
Delivery Platforms
Swiggy has agreed to refund charges collected for campaigns run without approval but has not yet addressed the remaining fee demands, which BHA says must be resolved by August 31.
Swiggy's Toing Budget Offering
Restaurant Associations
Toing mandates matching offline prices and uses automatic onboarding; BHA wants separate onboarding with explicit consent.
Delivery Platforms
Swiggy launched Toing as a budget offering with mandatory offline price matching; no platform response on the Toing concerns was reported by press time.
Key facts
- Platforms involved
- Swiggy and Zomato
- Original boycott deadline
- August 15
- Deferred deadline
- September 1
- Changes due by
- August 31
- Core dispute
- Unauthorised promotional campaigns and deductions from payouts without restaurant consent
- Swiggy concessions
- Refunds for campaigns run without approval and a memorandum of understanding with industry bodies
- BHA ultimatum
- Switch off the app if remaining demands are not met by August 31
Quotes
P C Rao
Honourary president of the Bangalore Hotels Association
“We have also raised concerns with Swiggy regarding Toing, where the platform mandates matching offline prices. We have asked for separate onboarding with explicit consent.”
financialexpress.com
“If Swiggy fails to address our remaining demands by August 31, we will switch off the app.”
financialexpress.com
Sources
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