NRAI slams online food delivery aggregators for predatory market practices

Even as the stand-off between restaurants and aggregators continues for the second week, the National Restaurant Association of India (NRAI) on Monday took up the issue of food delivery practices of these platforms. 

In letters written to Zomato, Swiggy, Foodpanda, and Uber Eats, the NRAI has raised issues of lack of transparency, deep discounting, and abuse of dominant position by online delivery aggregators in the aggregator-driven delivery industry. “This is specially impacting growth, employment, and sustainability of thousands of small restaurants and start-ups in the country,” the NRAI said in a statement. 

“All the standalone and chain restaurateurs across India have displayed their strong resentment on the prevailing concerns such as deep discounting, data masking, and high and uneven commission charges by online food aggregators. There is a very strong demand to immediately extend the #Logout movement to the online delivery vertical as well,” said Anurag Katriar, head of NRAI Mumbai chapter.

He added that the association wanted to engage with the delivery aggregators to find a solution. “Let me reiterate that we are NOT against the technology platforms, but our concerns are largely around these aggregators misusing their dominant position to indulge in predatory behaviour; commercially and in forming the terms of engagement,” added Katriar.

In its letter to the aggregators, the NRAI has alleged that the commission charged by the aggregators was ‘arbitrary and uneven’. 

The NRAI has also said that restaurant aggregators 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 own commercial benefit. In the interest of consumer privacy, we also want strict assurances against monetising the data of our customers,” it said. 

ISSUES RAISED WITH FOOD TECH FIRMS
 

The National Restaurant Association of India has raised eight issues over food delivery being offered by aggregators

• Deep discounts
• High and uneven commission charges
• Arbitrary terms and conditions
• Customer data masking
• Aggregators using customer data to build their own products
• Forced use of services like logistics
• Unreasonable and arbitrary rules of engagement
• Search algorithms

It further said that aggregators are using sales and customer data to develop their own brands. 

The #Logout campaign was started by the NRAI on August 14 against aggressive pricing and deep discounting by restaurant aggregators. The issue has been going back and forth between both sides since then, with Zomato’s Gold scheme being at the centre of much discussion around deep discounting. 

Last week, Zomato shared a Gold modification plan that addressed some of these issues. However, the NRAI rejected the proposal, saying the move from exclusive membership to being available to everyone has made Gold lose its sheen forever. 

Zomato Founder Deepinder Goyal took to Twitter on Friday to say Zomato was ‘logging out of the #Logout campaign’. He tweeted after posting pictures of Beer Café, which is run by NRAI President Rahul Singh, which offers a membership programme called Gold, which allows customers to claim 1+1 on food or drinks in different packages. 

Smaller aggregators Dineout, Eazydiner, Nearbuy, and Magicpin agreed to rejig their products “to fix the issue of deep discounting and are now working closely with the NRAI to find a sound and practical solution to resolve the problem at the earliest. However, Zomato has unilaterally stopped engagement with the NRAI on this subject’. 

According to sources, Swiggy has been in touch with restaurants and is engaging with them on these issues.  

Emails sent to Zomato and Swiggy remained unanswered at the time of going to print. Uber Eats did not respond to a request for comment. Foodpanda could not be reached for comment.