Food delivery also to take hit on apps?

Updated: Aug 23, 2019, 18:30 IST | Phorum Dalal

Eateries consider pulling out entirely from food apps over discontent with their take-it-or-leave-it solution to their deep discounts concern

Food delivery also to take hit on apps?
Representation pic

Food delivery services might soon take a major hit as several restaurants across the country are considering logging out of the delivery option on food aggregator apps. A high number of restaurants are already part of the #logout movement against the deep discounts on dine-out offers by aggregators even as the National Restaurant Association of India discusses the issues faced by restaurants.

Amurag Katriar, NRAI's Mumbai chapter head, along with Riyaaz Amlani, Impresario Group CEO, on Thursday presided over a meeting with members from other state chapters and non-NRAI representatives where discontentment regarding delivery services on food apps Zomato, Swiggy and Uber Eats was highlighted.

Also Read: Zomato CEO Deepinder Goyal taunts NRAI president in a tweet

Anurag Katriar, NRAI
Anurag Katriar, NRAI

NRAI has created a small working group to look into the delivery issues. "The strong sentiments of the members today blew our head away. Zomato will have to come to the table to resolve this. Otherwise, restaurants will perhaps need to shift focus on engagement terms on delivery too. NRAI had a meeting with Swiggy in Bangalore, and they have promised to look into issues such as data masking, predatory commercial terms and lack of transparency. We had such discussions in the past too but they too are just buying time without coming up with solid solutions," said Katriar.

"There was a huge resentment with delivery services on food apps Zomato, Uber Eats and Swiggy. Zomato Gold has around 6,500 restaurants under its umbrella but delivery services affect lakhs of restaurants. Did you know Mira-Road Bhayander sees 40,000 deliveries a day, which comes up to around a million a month? At least 1,000 restaurateurs are ready to logout of deliveries immediately. We have not taken a call yet and kept on hold logging out of deliveries because we realise that deep discounts and deliveries are different issues," he added.

Also Read: Zomato replates Gold, restaurants not impressed

Deepinder Goyal, Zomato, CEO
Deepinder Goyal, Zomato, CEO

Dark secrets

Ironically, the meeting was attended by some dark kitchen owners too. Dark kitchens or ghost kitchens are places where food is prepared solely for delivery. NRAI has in the past pulled up food aggregators for setting up their own dark kitchens and demanded level playing. "Some of these kitchens have to do away with a compensation equivalent to 30 per cent of sales, thus driving them into losses," said Katriar.

The NRAI has demanded parity and transparency. "According to delivery kitchen owners, the disparity of compensation percentage is 18 for some and 30 for others [since the commission received by every restaurant is not the same]," he said.

Priyank Sukhija-owned Plum at Aerocity, Gurugram, put up posters announcing NRAI #logout. File pic
Priyank Sukhija-owned Plum at Aerocity, Gurugram, put up posters announcing NRAI #logout. File pic

Nitin Nanavati, owner of Ustaad Miyaan restaurant in Baroda, is the president of Vadodra Food Entrepreneurs with 130 restaurants under its wing. Zomato Gold was supposed to launch in the city on August 26 but members have rejected the policies. "When Zomato launched delivery service, we rushed into it a year ago but soon realised that they are not sincere in their workings.

They offer deep discounts to some restaurants, which is a wrong format. They are using our money for their earnings while we are left to bear losses." "Delivery logout will be a secondary phase. Dining discounts includes aggregators like Zomato, EasyDiner, Dineout, etc. Deliveries has Swiggy, and UberEats. So the issues will be taken up one by one," he explained.

Riyaaz Amlani
Riyaaz Amlani

The gold war

The email titled 'Upcoming Improvements on Zomato Gold' sent by Deepinder Goyal, Zomato CEO, on Wednesday, has made the issue murkier, according to Katriar. "These were the points we had rejected in the meeting. The very fact that the platform bypasses the restaurant and goes to the consumer is not right," he alleged. Around 50 to 60 restaurants logged out of Zomato Gold on Thursday and the number now stands around 2,650 or so.

50-60
No. of restaurants that logged out of Zomato Gold on Thursday

2,650
Total no. of restaurants that have logged out of Zomato Gold

1,000
No. of restaurateurs ready to logout of deliveries immediately

Zomato takes a dig at beer cafe

In a tweet, Goyal, took a dig at NRAI president Rahul Singh who owns The Beer Cafe chains in India over the 'BeerOcrat' offer at his cafe. Singh responded to the tweet, saying, "As India's largest beer chain spread in 13 cities, we understand the importance of loyalty as it has to be earned, not purchased." He told mid-day that 'BeerOcrat' was a privilege programme for a select few, "which we enable based on the loyalty life cycle of our guests." "Our in-house programme has been up since 2014 and has 3.5 lakh downloads when Zomato was probably a directory app. As a brand owner, we have the right to provide privileges to our loyalists. Brokers cannot enjoy the same right as owners!" Singh further said in response to the tweet.

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