Restaurants in Chattogram have threatened to continue boycotting Foodpanda, accusing it of charging commissions and fees of up to 35%, delaying payments and imposing unfair penalties that erode their profit margins.
The Chattogram city unit of the Bangladesh Restaurant Owners Association issued the threat at a press conference at Barcode Food Junction on Thursday, as saying Foodpanda had failed to respond to its six demands by 15 October.
At least 120 restaurants have already boycotted the platform, and more are expected to join, the association's general secretary, Manzurul Haque, told TBS yesterday (16 October).
"We will now join other food delivery services, including Foodi and Pathao Food," he threatened.
The dispute over commissions, additional fees, rider waiting charges, delayed settlements and deductions following customer complaints has raised concerns about disruptions to the city's online food delivery market. Around 700-800 riders who depend on Foodpanda for daily earnings are also facing uncertainty as orders decline.
High charges leave restaurants struggling to make profits
Sharpa, owner of Azzumma's Korean Restaurant, told this newspaper that 11 orders generated sales of Tk7,034, but the restaurant received only Tk3,524.37 after deductions, leaving nearly half the sales value with the platform.
"After paying for ingredients and other operating expenses, there is hardly any profit left," she said.
Md Aminul Islam, owner of Mr Fries near Biplob Udyan in the city's Gate No 2 area, said his restaurant generated Tk5,005 in sales last month but received only Tk67 after advertising costs, commissions and other charges.
Repeated attempts to resolve the issue had failed, he added.
Owners also allege that smaller and medium-sized restaurants pay commissions of 30-35%, while large chains receive comparatively lower rates.
The association wants commissions and all other charges capped at 15%.
Delayed payments, rider fees strain cash flow
Restaurant owners say they sometimes wait 13 days or longer to receive sales proceeds, making it difficult to pay salaries, rent and suppliers. They have demanded settlement within seven days to ease working capital shortages.
They also object to waiting charges when riders arrive late because of traffic congestion, rain or mechanical problems.
Aminul Haque Apu, accounts manager at Sadia's Kitchen, said riders sometimes take up to 30 minutes to collect prepared food, potentially affecting its quality.
"We are willing to pay a penalty if we delay preparing an order. But there should also be accountability when riders arrive late," he said.
According to Apu, restaurants are charged Tk23 for the first eight minutes of waiting and Tk5 for every subsequent minute. Total deductions, including commissions, VAT and online payment fees, can reach at least 23% per order, he added.
Cancelled orders, customer refunds add to losses
Restaurant owners say they bear much of the cost when orders are cancelled because of technical problems, unavailable riders or delays in collecting food. Prepared meals often cannot be resold, leaving restaurants to absorb ingredient and labour costs.
Apu said production costs at some restaurants account for more than 70-80% of selling prices, making the compensation offered for cancelled orders inadequate.
Foodpanda Bangladesh, however, says it compensates restaurants by up to 40% from its own funds for cancelled orders and bears the associated delivery costs.
Owners also allege that the platform refunds customers over complaints about food quality, quantity or missing items without giving restaurants sufficient opportunity to respond.
Restaurants shift to rival platforms
Foodpanda has accused some restaurants in Chattogram of being pressured to disable their service tabs and switch to competing platforms.
In a statement signed by its head of public affairs and public relations, Zahedul Islam, the company described the practice as unlawful and contrary to fair competition.
The company said it operates under separate bilateral agreements with restaurants and is holding discussions to address their concerns. It warned that suspending services could hurt restaurant sales, rider earnings and customers.
Manzurul Haque rejected the allegation that the boycott was intended to benefit competitors, saying the campaign aimed to protect restaurant businesses.
Some restaurants have already moved to Foodi and Pathao Food, which they say charge around 15% or slightly more.
The Pizza Co in South Khulshi has stopped using Foodpanda and launched services through the two alternatives.
Faisal Ahmed, assistant manager for Foodi's Chattogram region, said 450-500 restaurants were connected to its delivery service, supported by more than 1,000 registered freelance riders.
Nearly 200-250 riders work daily, he said, adding that "We have no hidden charges or late fees."
Other restaurants are reducing their reliance on delivery platforms by taking orders through Facebook, Instagram and WhatsApp and offering direct takeaway and home delivery.
Consumer group calls for clear rules
SM Nazer Hossain, central vice-president of the Consumers Association of Bangladesh, said existing laws governing online business charges and commissions were not being effectively enforced.
He called for clear rules on commissions and additional fees, with platforms, restaurant owners, consumers and riders involved in discussions to find an acceptable solution.
Foodpanda Public Relations Lead Afifa Sultana told TBS that the company had contacted affected restaurants and sent a team from Dhaka to discuss their concerns.