The Bangalore Hotels Association (BHA) has warned that hotels associated with it, along with other hospitality bodies in Bengaluru, will stop doing business with online food delivery platform Swiggy from August 15 if the company does not resolve long-pending issues related to payment transparency, unauthorised deductions and advertising charges. 
The association said it has given Swiggy a final opportunity to address these concerns through discussions before taking any further action. According to the association, if the issues remain unresolved, all affiliated hotel and hospitality associations in Bengaluru have unanimously decided to discontinue their business with the platform from August 15. 
In a press release, the association alleged that Swiggy has been deducting advertisement and promotional charges without obtaining written or digital consent from hotel owners before launching cost-per-click (CPC), cost-per-acquisition (CPA) or promoted advertisement campaigns. It demanded that such advertisements should only be activated with prior approval from restaurants. 
The association also sought the introduction of a one-click opt-out option for advertisements, ensuring that restaurants can discontinue promotional campaigns without facing any additional charges after opting out. 
Another key demand relates to greater transparency in payment statements. The association said every deduction, including commission, Goods and Services Tax (GST), CPC advertisement charges, promotional offers and other marketing-related costs, should be shown separately in settlement statements so that restaurant owners clearly understand the basis of every deduction. 
The BHA further objected to service charges being levied on the GST amount collected from customers and subsequently remitted to the government. It argued that such charges add to the financial burden on restaurant owners. 
According to the association, multiple deductions and accounting discrepancies have resulted in many hotel owners receiving less than 50 per cent of the billed value of customer orders, creating serious financial pressure for businesses. The association claimed that these issues have persisted despite repeatedly raising them with the company. 
Speaking to PTI, BHA Honorary President P. C. Rao said the primary concern was the platform's payment and payout mechanism, which, according to him, involves several deductions that reduce the final amount received by restaurants. 
Rao clarified that the association does not object to Swiggy's standard service fee. However, he said the concern lies with additional deductions such as payout charges, advertising costs, map-related charges and other fees that, according to the association, are being imposed without prior permission from restaurant owners. 
He further claimed that in some instances, restaurants expecting payouts of around INR 1 lakh ultimately received only INR 40,000 to INR 50,000 after various deductions. He added that these concerns have been repeatedly communicated to Swiggy, but the issues remain unresolved. 
Rao said that if the company addresses the concerns within the stipulated period and improves its business practices, the association is willing to continue its association with the platform. However, if no corrective action is taken, the hotels may have no option but to discontinue their partnership. 
He also clarified that services have not yet been suspended and that the association will wait until August 15 before taking a final decision. 
The association added that any move to stop using Swiggy's services would be implemented in a way that minimises inconvenience to customers, with alternative arrangements being explored wherever possible. 
The dispute comes at a time when restaurant associations in several Indian cities have increasingly raised concerns over food delivery aggregators regarding commissions, advertising expenses, discount structures and payout mechanisms. Industry bodies have repeatedly sought greater transparency and more balanced commercial terms between restaurants and digital delivery platforms. 
Swiggy had not issued an official response to the association's allegations at the time of publication. 
Source PTI