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NRAI flags concerns with Swiggy, Zomato, other aggregators

Restaurants body says deep discounting and data masking hurting players.

ET Bureau|
Updated: Aug 27, 2019, 09.31 AM IST
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The NRAI is of the view that such issues are impacting growth, employment & sustainability of the thousands of small restaurants and startups.
NEW DELHI | BENGALURU: The National Restaurant Association of India (NRAI) on Monday wrote to Swiggy, Zomato, Uber Eats and Food Panda flagging “serious concerns” over alleged “lack of transparency, deep discounting and abuse of dominant position by online delivery aggregators”.

In separate letters to the four entities, the restaurant association said the delivery business model of deep discounting and data masking is hurting thousands of mid-sized and even large restaurant chains.

The development follows the “logout” campaign earlier this month in which some 2,000 restaurants delisted from food delivery apps such as Zomato, Dineout, EazyDiner, Nearbuy and Magicpin in protest against the heavily discounted meals they were offering at their dine-in programmes.

NRAI Mumbai chapter head Anurag Katriar said the association has asked the online aggregators to mutually resolve the matter. “There is a very strong demand to immediately extend the logout movement to the online delivery vertical as well. However, as a responsible industry body, we want to actively engage with these delivery aggregators to find a solution,” Katriar said in a statement.

He said that all standalone and chain restaurateurs across India have displayed “strong resentment on deep discounting, data masking, high and uneven commission charges by online food aggregators”.

Compared with dine-in programmes, the online delivery model is huge. According to industry estimates, while Swiggy handles about 1.2 million orders a day across 300 cities, Zomato delivers approximately 1 million daily orders across 500 cities.

“We are not against the technology platforms, but our concerns are largely around these aggregators misusing their dominant position to indulge in predatory behaviour,” Katriar said.
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The NRAI, which has a member base of over 500,000 restaurants, is of the view that such issues are impacting growth, employment and sustainability of the thousands of small restaurants and startups in the country.

Online food delivery giant Swiggy chose not to comment on the NRAI letter, but senior company executives said the aggregator has been in regular touch with the restaurant association and is willing to discuss and negotiate with the association whenever a meeting is scheduled. “So far, they haven't called a meeting,” said an executive, requesting not to be named.

At the ET Startup Awards, commerce and industry minister Piyush Goyal had asked Swiggy chief operating officer Vivek Sunder to negotiate with the restaurants and find a resolution, or the government might feel the need to intervene. Sunder had, at the time, addressed some of the concerns stated in the letter.

Sunder told Goyal that sharing customer data amounts to breach of privacy.

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