The spat between the tech platforms and the traditional businesses is becoming common nowadays. Cab drivers carried a strike against Ola and Uber a few months ago, then came them small hotels who protested against the policies of MakeMyTrip and Oyo and now many small restaurants of India have raised their voice against the anti-competitive policies of Swiggy and Zomato, the food delivery apps.
The Petition
They’ve signed an online petition which claims that “companies have been continuously found to misuse their dominant position with the aim to wipe out small and medium enterprises,”. Food delivery companies use deep-deep discounting, in-house kitchens and internal sourcing to build their own businesses at the cost of the restaurants’, the petition alleges.
“Unlike retail, FDI (foreign direct investment) restrictions are not applied on the restaurant sector or food service aggregators,” said Rahul Singh, president of the National Restaurant Association of India (NRAI), which represents over 5,000 brands. “Predatory practices will be examined by the CCI. As an association, we have a roundtable discussion next week with all four major food delivery aggregators to address deep discounting and the cloud kitchen issue which is adversely affecting the restaurant industry,” he added.
Key Reasons
These complaints are totally inevitable, these delivery platforms that started as mediators between the customers and restaurants slowly started moving up in the game and entered both the parts of this chain. Apart from starting delivery services, they also started their own restaurants which obviously get better mileage and promotion on the platform, as compared to other restaurants. Zomato has even started delivery of raw materials to the restaurants other than running exclusive discount programs like Zomato Gold.
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Restaurants feel they have been used for setting up the respective businesses by Zomato and Swiggy and now the companies are squeezing them further to add to their own profits. The times will tell how this confrontation will sort its way out. In the past not much has affected the platforms and it clearly shows that in the current times, the platforms are bigger than both the customers and the other party involved.
