Food delivery platforms Swiggy and Zomato have agreed to seek a restaurant’s approval before running discounts funded by that restaurant after the Bangalore Hotels Association (BHA), Karnataka State Hotels Association, National Restaurant Association of India, and the city’s bar and restaurant associations, threatened to take the city’s restaurants off the apps from August 15 over unauthorised promotions and disputed deductions from payouts.
Following the assurances from the platforms, the associations have deferred the deadline to September 1, giving them until August 31 to implement the changes.
At the centre of the dispute is consent for discount campaigns run by the apps. Restaurants alleged the platforms enrolled them into promotional campaigns without consent and later recovered the cost from their payouts.
Platforms Agree to Opt-In Discounts
Zomato moved first on Monday, agreeing to make promotional campaigns opt-in instead of automatically enrolling restaurants, seek approval through an OTP before campaigns go live, and review complaints over past wrongful deductions on an outlet-by-outlet basis.
Swiggy followed on Friday after discussions led by food marketplace, dineout and crew CEO Rohit Kapoor, food marketplace chief business officer Sidharth Bhakoo, and dineout and scenes CEO Swapnil Bajpai. The company agreed to the same consent requirement, refund charges collected for campaigns run without approval, and sign a memorandum of understanding with industry bodies by next week.
Restaurant bodies have also objected to the automatic renewal of promotional campaigns, saying click-based thresholds can trigger renewals without fresh consent. They want every extension to require separate approval.
BHA Raises Additional Concerns
BHA has separately raised concerns over Toing, Swiggy’s budget offering. “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. Automatic onboarding isn’t acceptable to us,” P C Rao, honorary president of BHA, said.
The association has also raised several concerns specific to Swiggy. It has demanded consent before launching or renewing promotional campaigns, deduction of only agreed commissions and statutory charges, and service charges only on the food component of bills excluding GST. It has also sought an end to what it called unauthorised levies, including long-distance, payment collection, Swiggy One, Pocket Hero, restaurant cancellation, call centre, delivery sponsorship and Bolt fees, besides a dedicated point of contact and a weekly helpdesk for operational, accounting and payout issues.
“If Swiggy fails to address our remaining demands by August 31, we will switch off the app,” P C Rao, honorary president of BHA, told FE.
Swiggy and Zomato did not respond to requests for comment at the time of going to press.