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Business News/ Companies / News/  Steep discounts among 8 concerns in NRAI’s list
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Steep discounts among 8 concerns in NRAI’s list

Forced usage of fleet services, lack of data transparency are other concerns
  • NRAI listed out 8 major issues to food delivery firms Swiggy Zomato, UberEats and Foodpanda
  • The restaurants said the creation of private labels and dark kitchens by food apps was in direct conflict of interest between their role as a marketplace and that of a brand owner.Premium
    The restaurants said the creation of private labels and dark kitchens by food apps was in direct conflict of interest between their role as a marketplace and that of a brand owner.

    The National Restaurant Association of India (NRAI) on Monday wrote to several food delivery companies listing out their 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 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.

    Among some of the concerns raised by NRAI against delivery services, the association noted, is discounting. “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 of the sector," the NRAI said in its letter to the food aggregators.

    It also raised concerns around the lack of unified commission structures across restaurants. This, according to a top member of the association, creates distortion in the way different restaurants are charged for the aggregator’s services.

    “What is missing is transparency and consistency of policies and commercials. It is very arbitrary because we feel there is no mechanism on why someone pays 12% versus why someone pays 30% commission," said Anurag Katriar, head of NRAI Mumbai Chapter. Aggregator platforms, NRAI claims also force restaurants to use their delivery services. In fact, NRAI has been asking aggregators to unbundle these services and give restaurants the freedom to choose what services they wish to opt for. It also asked aggregators to build more standardized and structured contracts.

    That is not all. NRAI also pointed out the need for better transparency around sharing data of deliveries that can help restaurants build their own customer database. It even added that the creation of private labels and dark kitchens by food aggregators was in direct conflict of interest between their role as a marketplace and that of a brand owner.

    NRAI’s move comes at a time when online food delivery services have been gaining popularity in India. On a monthly basis some 80 million orders are ferried by online food aggregators indicating that such services have now become indispensible to users in the country. While the two sides have been warring for a few months, the issue picked pace after 300 restaurants logged out of membership and dining programmes earlier this month in a sign of protest against complimentary offers. The protest soon grew to over 2,500 restaurants.

    Uber declined to comment. E-mailed queries sent to Zomato did not elicit any response. Swiggy representatives are expected to engage in talks with NRAI, said a person on the condition of anonymity.

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    ABOUT THE AUTHOR
    Suneera Tandon
    Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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    Published: 27 Aug 2019, 12:27 AM IST
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