Even as customers swear by the offers, most of the restaurants in the City are upset with key foodtech players for eating into their profits. Though the #logout movement launched by National Restaurant Association of India (NRAI) on social media mid-August failed to pick up pace in the City, a section of restaurant owners has opposed the one plus one deal offered under the premium service of a popular online food delivering aggregator.
The foodtech player will launch its premium ‘Gold’ service for city users in September. So far, the premium service which requires paid membership was only available in the metro cities. “A majority of restaurants in Bhubaneswar have already enrolled for the Gold programme. Not just that, we will also come up with another super premium service, the Diamond membership, for Bhubaneswar very soon,” said an official of the foodtech player, requesting anonymity. The aggregator, which claims to have tie-ups with 2,000 restaurants, kitchens and eateries in the City, will charge an annual fee from its users for the premium services.
However, the aggregator refused to disclose the rate of its annual membership charge before the launch. “Under the Gold service, a paid member will get one item free of cost on orders above Rs 300,” the official added.
Earlier, NRAI had sent letters to all the four major online aggregators (Swiggy, Zomato, Uber Eats and Food Panda) to resolve concerns raised by the standalone and chain restaurants, smaller players operating in micro-markets across India and the fast-growing cloud kitchen entities. The restaurant body had claimed that aggregators have ‘distorted a vibrant marketplace by aggressive discounting and predatory pricing.’
The #logout movement, triggered by a tweet by NRAI, witnessed exit of more than 2,000 restaurants from the online ordering application across India. According to the restaurant body, the movement forced Dineout, Eazydiner, Nearbuy and Magicpin to rejig their products, while foodtech majors like Swiggy and Zomato remained defiant. NRAI members were conducting meetings with the authorities of Swiggy and Zomato on Thursday till the time of filing of this report.
Despite growing resentment, there wasn’t any significant impact of the movement in the City. But, why? “The movement is growing in major cities. We don’t have a chapter in Bhubaneswar. However, we have received concerns from the east,” said Prakul Kumar, general secretary of NRAI.
“There aren’t many options of foodtech aggregators available in the City. Two of them are ruling the market here. Facing a stiff competition, restaurants aren’t able to withdraw even if they want to. Moreover, withdrawal is not a solution. But, it’s high time we must negotiate with the aggregators,” said a prominent restaurateur in the City, Debasish Patnaik, who is also a member of NRAI. Hit by 18 per cent GST—which apparently takes away 5 to 6 per cent of a restaurant’s turnover—Patnaik claimed additional 20 per cent margin reserved for foodtech firms is affecting each restaurant’s business. “Instead, the aggregators should charge their fees as per slabs fixed on the basis of a restaurant’s turnover,” he added.
Meanwhile, Hotel and Restaurant Association of Odisha (HRAO) is likely to conduct a meeting to take calls regarding the issue soon.
“Several members of the association are raising their concerns against the food ordering applications. The association will take up the matter soon,” said JK Mohanty, HRAO chairman.