Swiggy agrees to refund unauthorised campaign fees; Bengaluru hotels to wait till September 1

Food delivery platform Swiggy has agreed to refund charges collected from Bengaluru restaurants for promotional campaigns run without their consent, while seeking time until the end of August to address the industry's pending demands, representatives of hotel associations told ET after a meeting with the company on Friday.

The discussions, led by Swiggy CEO (Food Marketplace, Dineout, and Crew) Rohit Kapoor, chief business officer (Food Marketplace) Sidharth Bhakoo, and CEO (Dineout and Scenes) Swapnil Bajpai, came a day after rival Zomato held talks with restaurateurs and agreed to address a range of operational concerns.

Following the meeting, the Bangalore Hotels Association (BHA) extended its August 15 boycott deadline, giving the platform until August 31 to resolve the issues. "If Swiggy fails to address our demands by August 31, we will switch off the app from September 1," BHA honorary president PC Rao told ET.


Swiggy also agreed to come up with a formal draft of Friday's proceedings which both sides could sign.

The meetings come in the wake of warnings from more than 250 Bengaluru restaurateurs that they would delist themselves from food delivery platforms unless long-pending concerns over unauthorised promotional and other charges, and shrinking margins were addressed.

In a letter to Kapoor, the BHA demanded prior consent before Swiggy launched promotional campaigns or renewed marketing contracts, transparent deduction of only agreed upon commissions and statutory charges, and levy of service charges only on the food component of bills, excluding GST.

The association also demanded that Swiggy discontinue what it termed unauthorised levies, including long-distance, payment collection, Swiggy One, Pocket Hero, restaurant cancellation, call centre, delivery sponsorship, and Bolt fees. It further said that dedicated points of contact should visit member hotels every month, and a weekly Swiggy helpdesk should be organised at the BHA office to resolve operational, accounting, and payout-related issues.

Swiggy executives told the industry that the platform had already acted on some concerns by introducing an OTP-based consent mechanism for levying promotional charges. Restaurateurs, however, insisted that the company refund charges collected for campaigns run without their approval.

"We have told Swiggy that auto-renewal of promotional campaigns is unacceptable. Consent should be valid only for a mutually agreed period, and any extension must require fresh approval," BHA executive committee member Arun Adiga said.

Industry representatives also objected to what they described as hidden charges imposed under multiple heads over and above the GST, and urged Swiggy to simplify its commercial terms and present them in clear, easy-to-understand language.

Swiggy did not respond to an email seeking its comments.

On Thursday, Zomato agreed to make promotional campaigns opt-in instead of something eateries are automatically enrolled in, and said it would seek explicit consent through email or OTP before launching promotional programmes.