Eateries say no to revised plan of Zomato Gold, want deep discounts to end

The National Restaurant Association of India (NRAI) has refused to accept a modified version of Zomato’s Gold membership plan. The new plan was revealed in an email by founder Deepinder Goyal to partner restaurants on Wednesday. 

NRAI has made it clear it wants deep discounting to end and therefore would not rejoin the Gold scheme. 

Chalking out 10 points of improvement in the email, a copy of which was examined by Business Standard, Zomato assured restaurants that Gold post September 15 would be revamped. The premium membership allows customers to avail free dishes and drinks at Gold partner restaurants. 

In the email, Goyal said all restaurants that left Gold as part of #Logout will be allowed rejoin for free. According to restaurants, Zomato had told them that a fat rejoining fee of Rs 75,000 would be charged from those eateries that have logged out. “The biggest pain point we heard was that users hop between places on a busy evening, claiming 1+1 starters at one place, 1+1 main course at another, and 2+2 drinks at some other. To solve this, we will limit Gold usage by a single user to one unlock per day. This will ensure that customers complete their dining experience at a single restaurant, bringing the net effective discount down significantly,” Goyal’s mail stated. 

He said another big pain point that he heard was about multiple number of Gold unlocks per table. “Going forward, we are going to restrict the number of unlocks to a max of two per table,” he added.

Calling the modifications a knee-jerk reaction to the #logout movement and the ensuing meeting held between Zomato’s team and NRAI committee members, the restaurant association said the reconstruct of Gold is another attempt to ‘stuff old wine in a new bottle’. 

“It’s a tweak in the drug, which doesn’t solve the addiction. Since the launch in November 2017, this program has been shifting goalposts. What started as an exclusive invite only privilege, became a marketplace for bargain hunters, a word admitted by the Zomato founder in recent tweets. This Gold has lost its sheen. We stand united in the cause to obviate the deep discounting phenomenon and will therefore #stayloggedout,” the NRAI said in a statement.

Goyal, in the email, also said Gold restaurants having a minimum of 1,000 Gold unlocks per quarter per outlet, with an average cumulative rating of 4.5 and above for Gold visits during that quarter, will get advertisement credit worth Rs 25,000 per outlet per quarter from Zomato. 

According to several restaurant owners, Zomato charges one of the highest rates for putting advertisements on the platform, much more than major players such as Google.

Advertisement credit is a way the company hopes to appease restaurants who believe that ad rates on the platform are steep. Almost 70 per cent of Zomato’s total revenue comes from ad sales, it is learnt.

Another contention restaurant owners had was that customers often give negative rating if they do not encourage discount schemes. 

Goyal has offered to work with restaurants to strengthen its two-way feedback system which is similar to how Uber rates both its drivers and riders.