NAMAKKAL: The Namakkal City and Taluk Hotel Owners' Association has stopped all food delivery services through Swiggy and Zomato from July 1, causing a major disruption in the region's food delivery sector. This decision was made due to increasing dissatisfaction among local hotel owners over high and inconsistent commission charges, hidden fees and unilateral discount policies set by these platforms.
After negotiations with Swiggy and Zomato failed, services have been halted as per a resolution adopted at a recent meeting led by association president M Ramkumar.
Ramkumar explained that commissions can reach up to 33% for some restaurants, making it impossible to keep prices affordable for customers. For example, a dish priced at Rs 150 in a restaurant is listed for around Rs 230 on these platforms due to high commissions. This leads customers to believe restaurants are overcharging, when in reality, the platforms take the excess.
The association demanded a standard commission cap at 18%, transparent breakdowns of all charges and the removal of hidden fees. However, as these demands were not met, the association proceeded with the service halt.
Ramkumar said, "While this may cause a temporary loss, it is necessary for a long-term solution."
The association is now exploring partnerships with local delivery providers, where customers would pay only a delivery charge, without extra commissions or hidden fees.
N Arulmurugan, the association's secretary, said hidden charges are often collected in the name of advertising, promotions and priority listing, sometimes notified only through emails without clear confirmation from restaurant owners. He also noted that commission rates are higher for smaller restaurants with lesser orders, putting local players at a disadvantage, as nearly 70% of Namakkal's 1,000 daily orders go to just 10 major outlets. After all platform deductions, restaurant owners often receive less than half of their earnings.
For instance, one bakery owner said that out of Rs 5,132 paid by customers for 30 orders, he received only Rs 105 after deductions.
This decision has also affected delivery partners, whose daily earnings have dropped due to the halt in online orders.