In the last few years, Swiggy and Zomato food delivery apps have become very popular in urban areas of the country. The main reason is that you can taste the delicacies of different restaurants in the city at home. Even if you have to pay a small delivery charge on the original price of the item, it is affordable, as it saves travel time. Traveling, finding a place to park your car, as well as staying in the hotel until your number arrives is a hassle. In addition, coupon codes, various offers, cashback, etc., often make the deal very cheap. The service runs from 7 a.m. to late at night, so those living alone can order everything from morning tea to late-night dinner.
During the Corona Lockdown, the use of these services increased further. Consumers are happy because all of this benefits them. Relevant restaurants benefit from having more customers. Delivery work provides employment for many. In addition, Swiggy and Zomato make huge profits from the commissions they receive. In this cycle, the picture seems to be that everyone is happy, but in reality, it is not. Some restaurants are not happy with Swiggy, Zomato. He has also made some allegations against those companies.
According to The Indian Express, The National Restaurant Association of India (NRAI) has lodged a complaint with the Competition Commission of India (CCI) against Swiggy and Zomato, seeking redressal. CCI is responsible for controlling irregularities in market competitiveness. The agency will review the complaints and the companies may be investigated by the Director-General of CCI
Swiggy and Zomato charge huge commissions from restaurant operators. Also, the two main allegations of the NRAI are that they use that data for the promotion of their own cloud kitchens without allowing customer data to reach the restaurants.
It has also been alleged that restaurants are being forced to pay huge discounts for proper listing of restaurants on these online platforms. If you do not participate in the Deep Discount Offers offered by these platforms, then the visibility of the respective restaurant on that platform is reduced and the restaurant loses.
Restaurants that come exclusively on a platform are charged lower commissions. Sometimes they are also forced to use their delivery services by the companies concerned. These issues were raised during the CCI’s earlier market study. did not compete with these companies during the Corona period. On the contrary, many restaurants had to close their businesses during this period due to huge losses, the NRAI said.
Neither Swiggy nor Zomato has yet given an official answer to the NRAI’s allegations, but some of those questions have been answered by those companies in the past. These companies had made their case during the e-commerce study conducted by CCI.
The companies had said at the time that it was not mandatory for restaurants to participate in huge discount schemes. He also said that the information is not given to the restaurants as it is important to protect the privacy of the customers. He also said that the feedback from the customers about the food is always communicated to the restaurants.
The CCI has not yet issued any orders in this regard, but the observations reported by this body from time to time may be useful in this regard.
The CCI had said that increasing transparency between the sellers of the respective online platforms and those platforms was essential to sustain the competition.
The CCI also observed that large-scale concessions, commissions levied from platforms, and imbalances in the ability to do so were the main causes of disputes between restaurants and platforms.
The CCI had also recommended a basic framework for negotiating agreements between platforms and vendors, discount policy, dispute resolution, etc., the Indian Express reported.