Stop predatory practices with immediate effect: NRAI to Zomato, Swigyy

Reiterating concerns of restaurants over predatory market practices, the National Restaurant Association of India (NRAI) has asked food delivery firms including UberEats, Swiggy, Zomato and Foodpanda to create more transparent and fair terms of engagement for partners.

In letters to food delivery firms, reviewed by Entrackr, the NRAI listed eight major issues including deep discounting, high commissions, arbitrary condition, private labels that need immediate attention on food delivery firms.

In the current environment, deep discounts ranging from 30% to 70% are being deployed 365 days of the year on delivery platforms. This distorts the market and hinders profitable growth, the NRAI said in the letter. These discounts are not sustainable, nor are they beneficial to the industry, it added.

It also termed the current commission charges exploitative and not standard. It urged food delivery firms to create a transparent system based on the volume of business.

The letters further highlighted unreasonable rules and penalties on restaurants in accepting orders and preparations.

“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,” said Anurag Katriar, NRAI Mumbai chapter head.

There is a lack of transparency, he added.

The NRAI also pointed out that food ordering platforms do not share customer data with restaurants.

Aggregators use the knowledge and power of the data to divert traffic under the guise of advertisement for their commercial benefit; it added in the letter.

Katriar urging to resolve the issue further said that the body is not against the technology platforms, but its concerns are largely around these aggregators misusing their dominant position to indulge in predatory behaviour; commercially and informing the terms of engagement.

The development follows days after the NRAI led the logout movement by restaurants across India from dining-membership driven apps such as Zomato Gold, Dineout and EazyDiner.

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.