Food ordering apps agree to restaurants demand to lower discounts

After days of continuous protest against deep discounting, the food ordering and membership-driven platforms like Zomato, EasyDiner have finally agreed to lower discounts at restaurant partners.

According to the National Restaurant Association of India (NRAI), which met representatives of restaurants and food ordering platforms, all aggregators will rejig and rationalise their offered programs.

"The idea of scoring a discount should make guests feel special and not give them a sense of beating the system. Discount is a privilege and not a right. Discounting works well in the retail space because brands can limit supply (or at least make it look like supply is limited), and therefore create a sense of urgency in the eyes of the consumer," said Rahul Singh, president of NRAI.

The move will allow the restaurant-customer ecosystem to get rid of deep discount addiction.

Restaurants have earlier sought to cap the discounts to below 15%.

Though, there is no information on the exact percentage of the discount cap will be exercised by food ordering platforms.

On Monday, in a letter to Zomato,  Nearbuy, Dineout, EasyDiner and Magicpin, the FHRAI said that food aggregators are engaged in unethical business practices and need to review their contracts.

The body also highlighted that the unreasonably high commissions, payment terms and arbitrarily applied additional charges as well as unethical practices by the food aggregators. It alleged that food aggregators have disconnected restaurants from its customers by the number of masking of customers.

As a technology partner, by merely hosting its members’ inventory, FSAs cannot hold sway and arm-twist the traditions and aspirations of millions of entrepreneurs in India, the FHRAI added.

Zomato’s CEO and founder, Deepinder Goyal, in a series of tweets, acknowledged the problems faced by restaurant partners and said to make changes in its loyalty membership program Zomato Gold.

Last Friday, Gurugram-based food delivery major had in a letter asked its Zomato Gold partner restaurants to serve notice before discontinuing service after close to 300 restaurants in Gurugram pulled out from aggregators and table reservation services platforms.

NRAI, which represents 500,000 restaurants in the country, had jointly participated in the logout movement and threatened to do the same in other cities including Delhi, Pune, Bengaluru and Mumbai.