The Commission Conundrum
At the heart of the conflict are the high commission fees charged by major food aggregators. Restaurant owners report that platforms take a significant cut of each order, with rates often ranging from 20% to as high as 30%. These fees, which platforms say
cover marketing, technology, and logistics, are just the beginning. Restaurants also face additional charges for payment gateways, advertising to gain visibility on the apps, and participating in platform-led discount campaigns. According to the Bengaluru Hotel Association, these deductions can be so severe that a restaurant might only receive about Rs 40,000 from Rs 1 lakh of sales generated through an app. This leaves little room for profit after covering the costs of ingredients, rent, staff salaries, and utilities, pushing many establishments to a break-even or even loss-making position on delivery orders.
The Data and Discounting Dilemma
Beyond the direct financial costs, restaurants are also concerned about the lack of control over their own business and customer relationships. Aggregators typically mask customer data, preventing restaurants from directly engaging with their patrons or building loyalty programs. This data is instead used by the platforms themselves, sometimes to launch their own private-label food brands or cloud kitchens that compete directly with the very restaurants that use their service. Furthermore, restaurants feel pressured to participate in deep discounting schemes to remain visible on the apps. These promotions, often implemented without clear consent from the restaurant, further erode profit margins and create what the National Restaurant Association of India (NRAI) calls a dangerous cycle of unsustainable pricing.
A Brewing Rebellion in Bengaluru
The simmering tensions have recently reached a boiling point in Bengaluru. Restaurant associations, including the Bruhat Bengaluru Hotels Association, have threatened to boycott major delivery platforms and even shut down services citywide if their demands are not met by August 15, 2026. Their key demands include a cap on commissions, an end to forced discounting, greater transparency in how fees are charged, and fair compensation for orders cancelled after the food has been prepared. This isn't the first time the industry has pushed back, with the #Logout campaign a few years prior raising similar issues. The recent escalation in Bengaluru, involving over 250 restaurateurs, signals a renewed and more urgent push for a fairer partnership.
The Search for Alternatives
In response to the squeeze, a growing number of restaurants are actively seeking alternatives. Some are trying to encourage customers to order directly via their own websites or phone numbers. A more significant shift is the emergence of new platforms built on different economic models. Services like Rapido's 'Ownly' are gaining traction in Bengaluru by offering a zero-commission model. In this system, restaurants list their items at menu price, and the customer pays a transparent delivery fee based on distance and time, rather than the platform taking a percentage of the order value. The NRAI has even signed a memorandum of understanding with Ownly to explore and promote these alternative, restaurant-first delivery models. The government-backed Open Network for Digital Commerce (ONDC) also presents another path, aiming to unbundle the delivery ecosystem and give restaurants more choice and power.
The Platforms’ Perspective
For their part, the delivery giants argue that their fees are necessary to operate the vast and complex logistics and technology networks that they provide. They offer restaurants access to a massive customer base that would be prohibitively expensive for most to reach on their own. The marketing, customer acquisition, and delivery infrastructure are all bundled into the commission, which they see as a fee for generating sales. While the major platforms have been largely silent on the recent threats from Bengaluru's restaurateurs, their historical position is that they create value and drive significant business for their partners. The platforms see themselves as an essential channel for growth, especially in a post-pandemic world where online ordering has become a consumer habit. The debate, therefore, centers on how that value is shared and whether the current model is equitable for all parties involved.
