Bengaluru hotels warn of Swiggy boycott from Aug 15 over payment dispute
The Bangalore Hotels Association (BHA) has warned that hotels affiliated with it and other city hospitality bodies will suspend business with online food delivery platform Swiggy from August 15th if the company fails to resolve longstanding issues.
These issues include payment transparency unauthorised deductions and advertising charges.
The association has given Swiggy a final chance to rectify these issues through discussions. If corrective measures aren’t taken, all affiliated bodies will discontinue business with the platform from Independence Day.
In a press release on Wednesday, the association stated that all their associations in Bengaluru have unanimously decided to suspend all business with Swiggy from August 15th.
The association alleges that Swiggy is deducting advertisement and promotional charges without obtaining written or digital consent from hotel owners before launching CPC CPA or promoted advertisements. They also want a one-click opt-out mechanism for advertisements without any subsequent charges.
Furthermore, the association demands greater transparency in payment statements. They want all charges including commission GST CPC advertisements offers and promotional charges to be disclosed separately.
The association also objects to service charges being levied on the GST amount collected from customers for remittance to the government.
According to the association, unnecessary deductions and accounting system discrepancies have resulted in hotel owners receiving less than 50% of the billed order value causing significant financial hardship.
Speaking to PTI, BHA honorary president P C Rao explained that the core issue is the platform’s payout mechanism. He highlighted that the payment and payout system is not functioning properly and there are too many deductions.
He clarified that the association wasn’t opposed to Swiggy’s service charge but objected to additional deductions. While they accepted the service charge, they objected to extra charges like payout, advertisement and map-up fees being deducted without permission.
He claimed restaurants sometimes received only Rs 40,000-Rs 50,000 for payouts of Rs one lakh and the association had repeatedly raised this issue with the company.
Rao stated they’d continue working with Swiggy if they rectified these issues within 15 days and operated properly moving forward. Otherwise, they’d have no choice but to withdraw.
He clarified the association hadn’t suspended services yet and would wait until August 15 to make a final decision.
He added any decision to stop Swiggy services would be made to minimise customer inconvenience and the association would make alternative arrangements where possible.
Swiggy hasn’t responded to the matter yet.
