Bengaluru hotels warn of Swiggy boycott from Aug 15 over payment dispute

The Bangalore Hotels Association (BHA) on Wednesday warned that hotels affiliated to it and other hospitality bodies in the city would suspend business with online food delivery platform Swiggy from August 15 if the company failed to resolve longstanding issues relating to payment transparency, unauthorised deductions, and advertising charges.

The association said it had given Swiggy a final opportunity to rectify the issues through discussions, warning that all affiliated bodies would discontinue business with the platform from Independence Day if corrective measures were not taken.

"Failing this, all our associations in Bengaluru have unanimously decided to suspend all business with Swiggy from August 15," the association said in a press release.

The association alleged that Swiggy was deducting advertisement and promotional charges without obtaining written or digital consent from hotel owners before launching CPC, CPA or promoted advertisements.

It also sought a one-click opt-out mechanism for advertisements without any subsequent charges.

It further demanded greater transparency in payment statements, saying all charges, including commission, GST, CPC advertisements, offers and promotional charges, should be disclosed separately.

The association also objected to service charges being levied on the GST amount collected from customers for remittance to the government.

According to the association, unnecessary deductions and discrepancies in the accounting system had resulted in hotel owners receiving less than 50 per cent of the billed order value, causing severe financial hardship.

Speaking to PTI, BHA honorary president P C Rao said the core issue was the platform's payout mechanism. "The main issue is that the payment and payout system is not functioning properly. There are too many deductions," he said.

Rao clarified that the association was not opposed to Swiggy's service charge but objected to additional deductions. "We have no objection to the service charge. Whatever the service charge is, they can take it. But apart from that, they impose additional service charges, payout charges, advertisement charges, map-up charges, and various other charges without our permission, and deduct them," he said.

He alleged that in some cases, restaurants received only Rs 40,000-Rs 50,000 against payouts of Rs one lakh and said the association had repeatedly raised the issue with the company.

"If they rectify the issues within the next 15 days and conduct business properly going forward, we will continue to work with them. Otherwise, we don't have any other option; we'll come out," Rao said.

Rao clarified that the association had not yet suspended services and would wait until August 15 before taking a final call.

He added that any decision to discontinue Swiggy services would be taken while ensuring customers were not inconvenienced, and that the association would make alternative arrangements wherever possible.

There was no immediate reaction from Swiggy on the matter.