The past few year’s online delivery platforms have grown tremendously. Food delivery platform Swiggy was one of the first entrants in the market, which slowly grew to become extremely popular and preferred option. Especially, in urban cities where people have a fast paced life and prefer to order food rather than cooking it. The growing population and increased spending capacity by people are the main reason that has led to the growth of these platforms. The initial days was a win-win solution for all, restaurants, delivery agents and the consumer. However, with increase in commissions led to conflict of interest.
Earlier this month, The Gujarat Hotel and Restaurant Association had confirmed that they will stop accepting orders from Swiggy in Ahmedabad region. This was due to the fact that the association is not happy with the 22% commission that Swiggy charges on the orders being delivered. The protest is to demand that members of Swiggy team fix what they feel are unreasonable demands of the company.
The issue was presented by the association to both Swiggy and Zomato. Representatives from Zomato asked for more time to consider the way forwards wherein Swiggy out rightly refused to discuss the case further. Leading to the resultant boycott by the restaurants.
Similar is the case with Ola and Uber, once it became popular among the people, commissions were increased causing conflict of interest among vendors and companies.
As per recent analysis the resolution by restaurants and hotels in Ahmedabad, to boycott food delivery platforms has resulted in 30% drop in online deliveries by them. In spite of this the member of association have refused to end the boycott and are sticking to their demands. In a recent discussion the middle Hotel and Restaurant Association (Gujrat) (HRA) mentioned that it will not concede to the ideas of aggregators to increase the food prices so that the high value of commissions can be absorbed. This was openly denied by all restaurants and hotel owners. The thought of increasing the food price in menu to meet the commission charges levied by Zomato and Swiggy.
As per the reports the almost 500 restaurants and hotels have blacklisted Swiggy and Zomato, as the heavy commissions charged by these vendors are choking off their profits and resulting in losses.
Though the debate is still on to work out the best way forward, the chances of restaurants and hotels to increase their prices is close to none.