NRAI asked “The fundamental question here is why should a restaurant pay a commission to a middle man to offer a discount to its own customer?”
New Delhi: In an advisory against Zomato Pay and Swiggy Diner, the National Restaurant Association of India (NRAI) said the programmes are against the interest of restaurant owners.
The advisory reads, “Zomato Pay and Swiggy Diner both operate broadly on the same construct — no cost/subscription fee to the customer to participate; restaurants must compulsorily offer a discount in the range of 15-40 per cent to be part of the program.”
It further alleged that “middlemen” Zomato and Swiggy are making money at the cost of the restaurants who opt for the Zomato Pay and Swiggy Diner programmes by making them compulsorily offer discounts and also pay commission fee on every transaction on these platforms.
The advisory added, “Zomato Pay and Swiggy Diner both operate broadly on the same construct — no cost/subscription fee to the customer to participate; restaurants must compulsorily offer a discount in the range of 15-40 per cent to be part of the program.”
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“Restaurants must also compulsorily pay a commission in the range of 4-12 per cent on every transaction made via the respective payment gateway to Zomato or Swiggy,” it said, adding while competing payment gateway charges are 1-1.5 per cent only.
NRAI asked “The fundamental question here is why should a restaurant pay a commission to a middle man to offer a discount to its own customer?” It also said that restaurants must offer the discount to “anyone who wishes to pay vide Zomato Pay or Swiggy Diner irrespective of the fact of whether the customer discovered the restaurant on Zomato/Swiggy or just walked in on his own” and the payouts are on a weekly basis.
This is not the first time that Swiggy and Zomato have found themselves on shaky grounds. In April the Competition Commission of India (CCI) ordered a probe into the operations and business models of Swiggy and Zomato over alleged violations of Section 3(1) and 3(4) of the Competition Act.
The investigation came after a complaint by the National Restaurant Association of India (NRAI) over alleged anti-competitive practices. The association also said both Swiggy and Zomato, has more than 90 percent market share of the food delivery industry in India.
(With Agency Inputs)
