After a Swiggy user flagged an 81% higher bill on the food delivery app, a restaurant owner came forward with serious allegations against the platform. The restaurant operator alleged on Reddit that all the discounts displayed on the app are funded by restaurants themselves, and that Swiggy takes a 30% commission on every order.
‘Swiggy takes 30% cut on every order’
“I run a restaurant, and I’m done staying quiet about this. People keep asking why our prices are higher on Swiggy/Zomato than in-store. The truth? These platforms are nothing less than digital landlords,” the man, who goes by “sarathn79” on Reddit.
In the next few lines, he alleged that Swiggy takes “35% commission on every single order”. “Those shiny ‘60% OFF’ discounts? That money comes out of our pockets, not theirs,” he further claimed.
“Sarathn79” further claimed that the restaurants are forced to spend on advertisements to maintain visibility in search results, adding, “Don’t pay? Your restaurant becomes invisible.”
“And yet, customers look at us like we’re greedy for charging more online. The reality is simple: if we don’t hike our app menu prices, we’ll bleed out,” he explained, urging customers to order directly from the restaurant or opt for pickup.
‘We cover those 60% discounts’
Along with his post, he shared a screenshot of his monthly earnings on Swiggy, stating, “Because right now, every time you order with ‘60% OFF,’ it’s not the app paying for it, it’s the restaurant’s survival that’s being discounted.”
The screenshot showed that the restaurant completed 454 orders with a total billed amount of Rs 1.5 lakh. However, the restaurant only received approximately Rs 48,500 in net payout.
Let’s break it down for you, per the screenshot attached on Reddit. Of the total amount paid by the customers, Swiggy charged around Rs 51,356 for discounts, while the packaging charges and GST went directly to the restaurant.
From the remaining amount, Swiggy pocketed Rs 37,469 as fees. The amount includes commissions, payment collection charges, pocket hero fees and an 18% GST. Additional deductions included complaint and cancellation fees, taxes like GST and TDS, and approximately Rs 21,000 spent on CPC ads, co-branded partnerships, and top picks promotions.
In yet another post, the man shared his earnings as of September 10. He processed 339 orders, totalling Rs 1.1 lakh, but his net payout was only Rs 21,810.15.
“This is the latest payout I received today, and there is no bigger bite. They just left crumbs after the meal,” the restaurant owner said.
FinancialExpress.com has reached out to the company, and a response will be added to this article as and when we receive one.
How did Reddit users react to this?
“With just 25% payout, how are restaurants managing their expenses?” asked one individual.
Another joined, “Is this your profit?” The restaurant owner replied that it is his revenue, adding that he hasn’t calculated the loss.
“You are spending 70k on discounts and ads. Consider it this way: what if you had a dine-in place with 70k more in rent than your current one? Would that be a better alternative to increase sales? Having a dine-in place on a town’s main road is a marketing in itself,” a suggestion came in.
When one person, who is a delivery partner, suggested he go offline if he doesn’t want the company’s services, the man said, “Online delivery is monopolised by these companies. All we want is a fair service charge, instead of exploitation.”
Many even suggested that he go online on MagicPin. The man said that he got only four orders using MagicPin, as people in his location don’t use the app.
Disclaimer: This story is based on posts shared on Reddit. The details, opinions, and statements quoted herein belong solely to the original poster and do not reflect the views of FinancialExpress.com. We have not independently verified the claims.