Whistleblowers Blow up Swiggy’s House of Cards!

A blog post that has been co-authored by four disgruntled employees has blown the lid off the much talked about food-tech startup Swiggy.

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Note: Article updated after Swiggy’s response & to accurately represent the facts

The Allegations

By now, you must have gone through the blog that has trolled food-tech start-up Swiggy for its unfair practices.

The post has been co-authored by four disgruntled employees (I would call rather them whistleblowers) from this food-tech startup.

The blog has highlighted 3 major points:

  • Unethical practices with restaurant owners
  • Fake and paid reviews on social media. Hide behind TnCs
  • Spiked numbers to investors during the last funding round

Let’s do a quick analysis of this

Unethical practices with restaurant owners

I have highlighted a differentiated pricing model adopted by some restaurants.

This means a restaurant, which generally charges Rs.100 for a particular product, is charging Rs.100+X on the food delivery platforms.

I have addressed this to Swiggy through Twitter on August 15, 2016, and they responded with a scripted text:

“We would like to inform you that we use menu provided by the restaurants & do not alter any rates associated with it. Usually, restaurants have different menu & rates for take away vs dine in & that is why you might be seeing the difference in rates.”

And, this has been confirmed by few restaurant owners. Basis my conversation with a restaurant in CR Park, New Delhi, they have different rate cards for different platforms based on the arrangements with food delivery companies. They declined to share anymore details, however confirmed that there is a surge in the order number since the emergence of these food delivery startups.

Now, I can connect the dots. This may be the result of the commission pressure adopted by such companies on the restaurants.

Fake and paid reviews on social media. Hide behind TnCs

I have nothing to say on paid reviews. But their app store reviews can definitely tell a story. While I could only find 2-3 positive reviews among the latest 20 reviews, but as a whole its shows about 80000+ positive reviews (includes both 4 and 5 star) among 100000 odd reviews on Google Play Store.

I would like to leave this to your judgement.

On the hidden facts in TnCs, its nothing new and every company does it. I have been trying to open up these mysteries. I promise to write another post on Swiggy’s TnCs.

Still, I would like to take you back to this story. You know who got Series E funding around June 9, 2017? Just Google it out.

Spiked numbers to investors during the last funding round

An entrepreneur, who is shaping up his dreams, can’t adopt such lies to build his business. I am not aware of the truth and hence, will reserve my comments for this.

THE RESPONSE

As the drama unfolds, I have got access to two statements issued by Swiggy till afternoon. One is the statement for the external audience and the other one is for internal employees.

In the official statement for external audiences, it said,

 

“The recent blog post from an anonymous source is targeted at maligning the reputation of Swiggy as an organization. The article carries inaccurate facts regarding business and order numbers. It not only references employee departures from a year and a half back but also presents details on our partners out of context and with mischievous intent. Swiggy has grown over the last few years on the back of strong support from our restaurant partners, employees, delivery executives, consumers and investors. Our restaurant partners are at the heart of our success – our joint vision of providing a complete food ordering and delivery solution from the best neighbourhood restaurants inspire us. Our employees are the keepers of our soul – as a start-up organization, we take pride in the culture of mutual respect and common purpose that has helped us grow thus far. We are committed to winning together with all our stakeholders who we have always engaged with, in complete transparency and integrity”

Take a note of the points as highlighted above in bold.

Let’s keep this aside for the time being and hear out the internal communications from its CEO and co-founder, Sriharsha Majety:

Hi All,

There’s some really trashy and blatantly false coverage we’re getting from a blog doing the rounds. The author claims to be a part of a group of 4 disgruntled employees but there’s no evidence to believe that it’s an internal source but almost very clear evidence to point out that this is an external party feeling threatened by our progress.

While we work with the external communication management for now, I promise to come back to all of you by EoD with a blow by blow account of why the article is an absolute farce. I’m sure you maybe feeling some anxiety because of any articles being shared on social media, but you can rest assured that we’re absolutely in the right here. As founders and a management team, we’ve always strived to live by the right way every single day at work and I’m confident a lot of you who’ve worked with us know that. We are on a brilliant mission, and with the success of the company and validation by external sources we should expect even more of this criticism in the coming years. I would request all of you to stay calm and carry on, this too shall pass..

We will also address a lot of this in the town hall coming soon, looking forward to it.

We have only two common elements from both the communications:

  • Denied the claims by the blog
  • Pointed out the role of an external party

Denied the claims by the blog

In PR practices, people are recommended to follow Page principals, by Aurther W Page, during any crisis situation. However, in almost every cases, we see an initial denial.

The company, in the evening, published a paragraph-by-paragraph explanation of it’s take on the anonymous blog.

Role of an external party

Now, Swiggy is making claims without any evidence. If there are malpractices as claimed by Swiggy, they should show us evidence rather than throwing dirt at others.

On Wednesday, there is an anonymous campaign doing rounds on social media blaming Zomato for the Swiggy crisis.

In a series of tweets, Deepinder Goyal, Founder and CEO, Zomato suggested Swiggy to come out clean. He said,

“ Zomato has been through similar trouble multiple times in the past And the only way to come out of it is by being transparent and honest.”. He added, “Swiggy needs to do the same for the sake of their employees, and the ecosystem at large”

On the eve of the crisis day, Swiggy’s CEO, Majety posted his response, on Swiggy’s blog, and attempted responding to all the allegations made by the whistleblowers

He alleged that the numbers used by the whistleblowers are wrong and shared the numbers which are verified by external and neutral auditors.

On the matter of deceiving the restaurant owners, he said,

We’ve partnered with restaurants from the start of our journey, and grown tremendously, mutually. Business commercials with restaurants are a part and parcel of the business. It is mutually agreed with gives and takes on both sides. There is no cheating, no deceit.”

He also stands firm on the market share.

We do not lie about our market share or order numbers. We are the clear market leaders and we communicate the same to restaurants and partners to show them the benefits of partnering with us,” reaffirmed Majety.

Conclusion

So, we have heard both the side of this sudden drama. One side has questioned Swiggy’s way of operations with a screenshot of certain graphs, while Swiggy rubbished the allegations with the audited numbers, as claimed by the company.

Hope the drama ends over here and Swiggy can get back to its business from today

Bidding adieu on this article anticipating the music postludes at this point unless the whistleblowers have anything add to the lyrics.

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