- Thousands of Bengaluru restaurants may stop orders on Swiggy and Zomato from August 15
- Restaurants cite high commissions, discounts, and payment deductions as key concerns
- Bengaluru Hotel Association reports restaurants keep only 40% of Rs 1 lakh sales after costs
The latest flashpoint in the long-running battle between restaurants and food delivery platforms has emerged in Bengaluru.
Thousands of eateries in the city have threatened to stop accepting orders through Swiggy and Zomato from August 15 unless the platforms address complaints over high commissions, discount sharing and payment deductions.
The warning has once again exposed the uneasy relationship between restaurants and the companies that helped bring them millions of online customers.
Not A New Fight
The tug-of-war between restaurants and food delivery platforms has been simmering for years. While Swiggy and Zomato transformed the way Indians order food, many restaurant owners say the partnership has gradually become costlier and harder to sustain.
Restaurant associations have repeatedly argued that commissions, mandatory discounts, advertising spends and various platform charges eat into already thin margins. Many owners also complain that they have little bargaining power because the two platforms dominate India's online food delivery market.
The dispute has even reached the Competition Commission of India (CCI).
In 2022, the competition watchdog ordered an investigation into Swiggy and Zomato after a complaint by the National Restaurant Association of India (NRAI). The association alleged anti-competitive practices, including preferential treatment to select restaurant partners, private-label conflicts, customer data masking, exclusivity arrangements and restrictions that limited competition. The CCI found there was a prima facie case worth investigating.
The "Log-Out" Campaign
As early as 2019, restaurant owners launched the "Log-Out" campaign against aggressive discounting and loyalty programmes. Even before that, restaurateurs had raised concerns over deep discounting, cloud kitchens owned by aggregators and what they described as an uneven relationship with food delivery companies.
The debate has only intensified as food delivery has become central to the restaurant business.
For many outlets today, online orders contribute a significant share of revenue. Walking away from Swiggy and Zomato is no easy decision because the platforms offer access to millions of customers, logistics support and nationwide visibility. Yet many restaurateurs argue that the cost of staying on these apps has continued to rise, making profitability increasingly difficult.
Enter ONDC
The growing dissatisfaction has also opened the door for alternatives.
The government-backed Open Network for Digital Commerce (ONDC) has positioned itself as a lower-cost option, while newer players such as Rapido have announced plans to enter food delivery with a commission-light model. Several restaurant groups are closely watching these alternatives, hoping increased competition will give them greater negotiating power against the market leaders.
For Swiggy and Zomato, the Bengaluru standoff is therefore about much more than one city.
It is the latest chapter in a years-long struggle over who controls India's online food delivery business-and how the economics of that business should be shared.
