Why Indian Restaurants Want To Quit Food Delivery Apps is becoming a critical question as a new nationwide survey reveals growing dissatisfaction among restaurant owners. According to a recent study by the National Council of Applied Economic Research (NCAER), nearly 35% of restaurants in India say they would exit food delivery platforms if given a choice, citing rising costs and shrinking margins. Despite the popularity of apps like Swiggy and Zomato, the findings show a relationship increasingly defined by financial pressure rather than partnership.
Why Indian Restaurants Want To Quit Food Delivery Apps
The primary reason behind this dissatisfaction is high commission fees charged by food delivery platforms. The study highlights a sharp rise in per-order commissions over the past few years, significantly impacting restaurant profitability.
Rising Commissions Eat Into Profits
According to the report, average platform commissions increased from 9.6% in 2019 to 24.6% in 2023. For many small and independent restaurants, this leaves little room for sustainable earnings—even when order volumes remain high.
“Even with steady demand, net income per order is often too low to justify platform dependence,” the study notes.
While medium and large restaurants have some negotiating power, smaller outlets often operate on fixed terms, making them more vulnerable to margin erosion.
Operational Challenges Beyond Commission Costs
Apart from financial concerns, restaurant owners pointed to poor platform support, customer dispute handling issues, and low overall profitability as reasons behind their willingness to quit delivery apps. Many respondents felt that platforms prioritise scale over restaurant welfare.
These issues together explain why Indian restaurants want to quit food delivery apps, despite their widespread use across urban and semi-urban markets.
Why Most Restaurants Still Stay on Food Delivery Apps
Despite growing dissatisfaction, nearly two-thirds of restaurants continue to use delivery platforms. The study found that visibility and customer reach remain powerful incentives.
Benefits That Keep Restaurants Hooked
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59% reported expansion of their delivery area
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52.7% said platforms helped them diversify menus
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50.4% experienced an increase in customer numbers
For new and small restaurants, these benefits often outweigh the high commission costs, making exit difficult even when profits are squeezed.
Broader Industry Impact Highlighted by the Study
The report also reveals that platform-linked restaurants tend to generate higher total revenues, though their profit margins are lower than offline-only outlets. Delivery apps have contributed to greater formalisation of the sector through digital payments, licensing assistance and accounting tools.
However, post-pandemic trends show stabilising platform dependence, with some Tier 3 cities witnessing a mild decline in delivery-driven revenue as dine-in traffic returns.
A Relationship Built on Trade-Offs
The findings underline a complex reality. While many operators question long-term sustainability, platforms remain deeply embedded in restaurant operations. Why Indian restaurants want to quit food delivery apps ultimately reflects a struggle between growth opportunities and economic fairness.
The future of this ecosystem will depend on whether platforms can address concerns around commission transparency, profitability and support, or risk losing the trust of the very businesses they rely on.
