Online food delivery companies agree to look into demands of NRAI3 min read . Updated: 29 Aug 2019, 11:01 PM IST
- The two parties discussed eight pain points raised by restaurants
- Head of NRAI's Mumbai chapter said both Zomato and Swiggy agreed when they were asked to bear the cost of discounts partially, if not fully
New Delhi: Zomato and Swiggy could make some changes to their commissions for eateries, the way they run discounts and even standardize some terms and conditions for on-boarding restaurants to bring more uniformity to their platform, among other changes after marathon meetings with representatives of the National Restaurant Association of India (NRAI) on Thursday.
Top executives from online food delivery companies Swiggy and Zomato met with executives from NRAI on Thursday amid an ongoing row between the two over what the restaurant association claims are unfair practices followed by food aggregators in India that are hurting eateries.
The two parties discussed eight pain points raised by restaurants such as deep discounts, uneven commission charges, private labels run by aggregators, forced fleet services, and uneven terms and conditions used by food delivery platforms to monitor and onboard eateries.
Anurag Katriar, head of NRAI's Mumbai Chapter, who was present on Thursday's meeting said that both Zomato and Swiggy agreed to various issues faced by restaurants. "The meetings were positive and we made some progress," he said.
"Swiggy and the NRAI are committed to creating value for both restaurants and consumers in a sustainable manner. We have had a constructive and collaborative dialogue today and have agreed to reconvene on all the points that were discussed. Our goal remains to enable a win-win for our small, medium and large restaurant partners and the food delivery ecosystem," a Swiggy spokesperson said.
“They both (Zomato and Swiggy) agreed deep discounting cannot go on, it can be episodic," said Katriar. He added that Swiggy proposed that discounts can be an episodic thing.
"We also expressed that they need to bear the cost of discounts partially, if not fully, which they agreed to," Katriar, who was present at the meeting, told Mint.
The food aggregators are expected to come back to the NRAI with a formal proposal on various issues in a week or two. The aggregators, said Katriar, have agreed to resolve some of these issues in principle and make changes to their platforms accordingly.
Among other issues, commission charges were discussed after restaurants complained that they were erratic and not uniform across restaurants.
“On commission charges, both agreed on two things— there needs to be a logical, scientific matrix to decide what should be the percentage and secondly there has to be a maximum cap up till where commissions can go on which cannot change till we discuss it further," Katriar added.
Restaurants have also raised concerns around the terms and conditions that food aggregators use for restaurants on their platforms claiming that they are not standardized for all eateries.
“On the piece of terms and conditions which vary outlet to outlet we made good progress with both of them, they agreed to share the current terms of engagement with us," he said.
NRAI will vet these T&Cs with its lawyers so that standardized terms and conditions can become the template for restaurants working with aggregators across India.
Moreover, aggregators have said that they will look in to customer data masking, and address it as per prevailing law of the land.
Thursday’s meeting comes after the National Restaurant Association of India (NRAI) wrote to several food delivery companies earlier this week listing out eight concerns over steep discounts, forced usage of fleet services and other clauses laid out by these platforms, urging them to change the way they on-board and remunerate eateries. Representatives of NRAI wrote to top executives at UberEats, Swiggy, Zomato and FoodPanda listing eight broad issues they feel need to be addressed and urged them to stop predatory practices with immediate effect.
The issue of private labels was discussed too. Swiggy has several brands it runs and hosts on its platforms. Restaurants have called out such a practice claiming it is anti-competitive. Food aggregators have agreed to look into the matter too.
The move comes days after the NRAI led the de-listing of several restaurants across India from dining-membership driven apps such as Zomato Gold, Dineout and EazyDiner, among others over concerns that complimentary offers doled out by them was hurting business at restaurants. While restaurants have agreed to log back on to four of the five platforms after they agreed to make small modifications to their platforms; restaurants continued to remain logged out of Zomato despite the company agreeing to tone down its signature Gold program.
With issues around membership and dining platforms eased, the NRAI then moved to push online delivery aggregators to look into steep discounts and commissions last week. The move was prompted to bring more standardisation in the way aggregators function.