Cash is not only accepted but in specific Indian cities expected , I.e. the driver will call you and if you don’t offer cash they will cancel the booking or won’t show up at all .
Can you elaborate? In the U.S. you place an order and are quoted a price which you pay (typically with a credit card) before your order is sent for delivery. Receiving a call from the delivery driver about paying in cash would feel like an extra fee. In the situation you describe is no payment made in advance?
The commenter was talking about cabs and autorickshaws, not food delivery drivers.
Uber and others pay out on a weekly basis. Cabbies would rather have the cash now. And by cash, they mean a direct payment outside the app. Typically this would mean a direct transfer via UPI.
As you hypothesize it is about extra fees and renegotiating the price. Common tactics include asking more than the price shown on the app, or refusing to give change back,or pretending not to have any etc.