Restaurants In This State Rebel Against Zomato, Swiggy; Terminates Partnership Due To This Reason
Hotels and Restaurant Association of Navsari, Gujarat have decided to end ties with Swiggy, Zomato after incurring losses due to the COVID-19 pandemic resultant lockdowns.
Read on to find out why…
Restaurants In Gujarat Cut Ties With Swiggy, Zomato!
In mid-May the Union Ministry of Home Affairs (MHA) allowed restaurants to reopen. This commenced with takeaways and gradually led to full-fledged dining by July while complying to the safety protocols.
However, in the top cities of Gujarat, only 50% of restaurants have reopened.
The association claimed that the delivery partners were charging additional commission fees. The association said that reduced earning due to the pandemic coupled with commission charges impacted the restaurant owners.
On September 14, the representatives of over 122 hotels and restaurant owners met in Navsari to discuss the commission charges of the delivery apps. The discussion concluded with them finalizing to end their partnership with food delivery apps such as Swiggy and Zomato.
Navsari Hotel and Restaurant Association president Suresh Pandey told Indian Express, “Both the companies should take our consent before raising the commission charges. They also delay transfer of payment, which earlier used to be done within 48 hours. The lockdown has hit us hard and we are down to 30 per cent business. Many hotels and restaurants are still shut. With 25 per cent commission charges by delivery apps, it would be difficult for us. We are seeking their explanation.”
This move comes as many restaurants in the industry are permanently closing shutter unable to sustain losses amidst the COVID-19 pandemic.
Aftab Chakra, whose family has been running the Millennium Restaurant in Fatehgunj for over 50 years said, “I turned a Zomato exclusive partner after Swiggy created issues over commission rates.”
A restaurant in Makarpura, said, “We removed our listing from Swiggy because they were arm-twisting the restaurants citing that people prefer that app due to hefty discounts but it doesn’t work for the business.”
What Do Food Delivery Apps Have To Say?
With people opting for food deliveries over dining-out, online food delivery apps like Swiggy and Zomato have started making profits lately.
A Zomato official said, “We began delivering in Navsari in April 2019. We have a contract with more than 180 hotels, restaurants, hawkers, and home kitchens. We raised commission charges by 2% for restaurants and eateries who joined us post-lockdown and not for existing partners. The total commission with the raised amount is 22%.”
The executive while denying allegations also said that the initial commission amount was ‘subsidized’ for the first three months during the launch. However, it was later increased to 20% without the taxes.