NAMAKKAL: Restaurant owners and hotel associations in Namakkal district have banded together and tied up with a new food delivery app ‘Zaaroz’, shunning popular food delivery majors like Swiggy and Zomato.
The shift comes after local eateries and hotels in the region started facing massive loss due to the inconsistent commission charges, hidden fees, and unilateral discount policies set by the two platforms.
On Monday, the Namakkal Town and Taluk Hotel Owners Association teamed up with Zaaroz, which only collects subscriptions from the eateries on a monthly-basis, unlike the other major platforms that allegedly also demand high commissions.
The move comes after multiple restaurants and eateries reported over 40% loss due to the increasing tariff and hidden costs levied by popular food delivery apps.
The association had stopped all food delivery services through Swiggy and Zomato from July 1, after its negotiations with the delivery majors over a set of demands, including standard commission cap at 18%, transparent breakdowns of all charges and the removal of hidden fees, failed to make headway.
50 members of hoteliers’ association registered with ‘Zaaroz’ app on Day 1
N Arulmurugan, secretary of the Namakkal Town and Taluk Hotel Owners Association, said, “Apps like Swiggy and Zomato gained popularity as they provided easy access to consumers’ favourite food. Initially, the apps were welcomed by eateries and hotels, as it promised huge returns.
However, several businesses began facing losses due to hidden charges. For instance, if we sell a product for Rs 100, we have to quote a price of Rs 140 in the app so that businesses can earn the actual cost of the product. Hence, consumers are burdened by a 40% price hike. Besides, the hotel owners do not get Rs 100, instead, they get only Rs 80 for the product.”
Arulmurugan further said that Swiggy and Zomato charge a hidden fee of Rs 10 to Rs 20 for promotion, advertising. “Sometimes our losses go up beyond 80%. Hotels and eateries started losing more than Rs 30,000 per month on average. Hence, we boycotted Swiggy and Zomato, and opted for Zaaroz, which is run by an entrepreneur from Chidambaram,” he added.
"Small businesses like messes and eateries registered under Zaaroz are charged Rs 1,500 per month plus 18% GST, and big restaurants are charged Rs 3,000 plus 18% GST. The delivery charges are Rs 25 per 2 km and Rs 5 for every additional kilometre, and a platform fee of Rs 10 per order is also charged. As a result, local businesses are spared from inconsistent hidden costs, when compared to the other apps, and the price is fair.”
Further, the cost itself has also reduced relatively. “Under Zaaroz, we are charging Rs 30 for two idlis, while in Swiggy and Zomato, we have to mark prices upwards of Rs 45,” he said.
On Monday, a total of 50 businesses, out of the total 250 members of the association, registered with the app.