Online food delivery services Swiggy and Zomato are threatened by a huge disruption in Bengaluru with the Bruhat Bengaluru Hotels Association (BBHA) issuing a strong ultimatum on unfair and exploitative business practices.
If its concerns are not addressed by August 15, member restaurants across the city will be forced to cease accepting orders through Swiggy and Zomato, potentially affecting thousands of customers who rely on online food delivery services every day.
According to the BBHA, many small and medium-sized restaurants have been struggling because of the policies of food aggregator platforms. The association says that high commission charges, discount-driven pricing models, and other platform-related practices have severely reduced profit margins, and independent restaurants face a growing challenge to survive.
They told the association that many restaurant owners have raised the problem with the food delivery companies and made no progress. So the association has set a final deadline and warned them that failure to resolve the problems would result in the city-wide suspension of food deliveries through the two platforms.
Although online food delivery has helped restaurants reach a larger customer base, the BBHA says, they are finding the current business model unsustainable for many restaurants. Some small businesses, particularly, are having to pay commission and have to offer promotional offers to be competitive because of this, they argue.
If the boycott goes ahead, Bengaluru customers might experience reduced restaurant options on the Swiggy and Zomato apps in mid-August. Popular local restaurants may only provide direct orders, dine-in customers, or delivery via other channels.
It has called on the two companies to have a constructive dialogue and to create policies that are in line with technology companies’ interests and the restaurant partners’ interests. Restaurant owners are not against online food delivery, but they want a transparent business model and fair commercial terms.
Bengaluru is one of the largest food delivery markets in India, with millions of orders a month, industry experts say. Any major departure of restaurants from the platforms would impact consumers, delivery partners, and the food service industry at large.
As of now, Swiggy and Zomato have not officially announced whether they will revise their policies in response to the association's demands. Restaurant representatives and the companies are expected to talk to each other before the August 15 deadline.
And the coming weeks will be the key to determining whether both sides can reach a mutually acceptable agreement. If the negotiations succeed, normal operations are likely to go on. But if no resolution is reached, Bengaluru may have one of the biggest coordinated protests by restaurants against online food delivery platforms in recent years.
For now, customers, restaurant owners, and delivery workers will be closely watching the negotiations to see how well the talks progress, as the outcome of this could change the food delivery landscape in Karnataka’s capital in a major way.
