StartupTalky

Tag: NRAI

  • Zomato Under Fire Again: NRAI Seeks Answers on Long-Distance Fee

    The National Restaurant Association of India (NRAI) has chosen to speak with Zomato this month after a flurry of restaurant complaints regarding the food tech giant’s recently implemented long-distance service charge.

    According to various media reports, the restaurant industry association had preliminary talks with Deepinder Goyal, the CEO of Zomato parent company Eternal, about the matter and intends to meet with him this month to try to find a solution.

    Zomato announced in May of this year that, regardless of order value, it would charge restaurants a service fee of INR 15 for deliveries within 4 to 6 km and INR 25 to INR 35 for deliveries over 6 km.

    Restaurants are furious about this action. Zomato asserts that it sets a 30% commission cap on restaurant orders, but eateries complain that this cap has been violated as a result of the new long-distance price.

    Why Restaurants are Unhappy with Zomato’s Long Distance Fee Move?

    Zomato stated in an email that long-distance calls would cost between INR 25 and INR 35. The fee now stands at 35% for a customer who already pays 25% on a purchase of INR 250 plus an extra INR 25.

    Then, Zomato claims that it will be limited to 30%. Thus, the structure is extremely complex and perplexing. According to the proprietor of a quick service restaurant (QSR), Zomato appears to be breaking the 30% commission cap by charging a long-distance fee.

    According to NRAI, Zomato, not restaurant owners, chose to expand the delivery radius in order to expand the platform. Therefore, it is now their responsibility to find the answer. If they so choose, they are free to charge the person who is ordering food for this.

    In addition to the long-distance charge, Zomato has angered restaurants by attempting to alter the conditions of its contracts with them. Zomato has been contacting eateries to sign a new contract under its parent company Eternal since May.

    Restaurants, however, claimed that Zomato had covertly added a new provision to the contract that would allow it to sanction the former for failing to maintain pricing parity among food tech platforms. The majority of restaurants are not signing the new contract, according to a Zomato-listed restaurant partner quoted in the media.

    Since 2021, the NRAI has been fighting the two foodtech titans in court over their claimed anti-competitive behaviour. Additionally, the restaurant body has been at odds with Swiggy and Eternal regarding the meal options offered by their respective rapid commerce verticals, SNACC and Bistro.

    Restaurants have therefore been searching for strong substitutes for the two platforms for a considerable amount of time. Although ONDC looked promising at first, its credibility as a viable alternative has been damaged by leadership turnover and a drop in retail food orders.

    The NRAI has now partnered with Rapido to distribute food in a fresh attempt. Eternal’s decision to increase meal delivery fees comes as the company seeks to boost its top line despite the industry’s decline.

    While Eternal’s rapid commerce vertical Blinkit grew 122% YoY to INR 1,709 Cr during the quarter, Zomato’s sales grew just 17.5% YoY to INR 2,409 Cr in Q4 FY25.

  • Regarding Zomato and Swiggy’s 10-minute Delivery Apps, NRAI Plans to Approach CCI

    The National Restaurant Association of India (NRAI) is expected to petition the Competition Commission of India (CCI) for intervention about the launch of the 10-minute meal delivery standalone apps, Bistro and Snacc, adding to the problems caused by Zomato and Swiggy’s anti-competitive conduct. According to a media story that quotes Sagar Daryani, the founder and CEO of Wow Momo, as well as the president of NRAI, NRAI is seriously considering pursuing legal action against both businesses. Daryani further stated that NRAI is not comfortable with Zomato and Swiggy selling food directly through Blinkit’s Bistro app and Swiggy’s Snacc app for speedy meal delivery, as well as with the two companies allegedly hiding consumer data.

     Daryani further emphasised that although these platforms have access to important customer data, they do not provide restaurant partners with this information. All of our data is at their disposal, yet they choose not to share it with us. There is total consumer masking for us. “Whether it’s data from a tea brand, biryani, or momo, we have no reason to believe they are not migrating our customers to the products they sell as private labels on their apps,” the journal said, quoting Daryani. The NRAI is concerned that Zomato and Swiggy may use this information to entice users to buy their goods via these apps.

    The startup led by Sriharsha Majety launched a new app earlier this week called “SNACC,” which aims to provide a 15-minute meal delivery service in a few areas of Bengaluru. Zomato then introduced its 15-minute meal delivery service. It is important to remember that in addition to being outspoken about its concerns about Zomato and Swiggy‘s business practices, the NRAI is also pursuing two lawsuits against the companies, claiming they have engaged in anti-competitive behaviour. In an effort to create a level playing field and safeguard eateries, delivery partners, and customers from potentially exploitative platform activities, NRAI requested just a day ago that the government provide industry status to the food services sector.

    The food delivery giants were accused by the association of anticompetitive activities in the past, including service bundling, excessive commissions, delayed payment cycles, and the imposition of one-sided terms. According to reports, the CCI discovered a few months ago that foodtech giants Swiggy and Zomato had violated competition regulations by favouring certain eateries through their relationships.

    Why there is a Need of Strict Guidelines

    Based on a complaint submitted by the National Restaurant Association of India (NRAI) in 2021, the CCI had previously investigated both businesses in 2022. This is the main reason why many consumer service and e-commerce businesses are either trying to enter or are already in the rapid commerce market. This trend reflects the shifting preferences of consumers, who now want their purchases delivered quickly. Amazon, Flipkart, JioMart from Reliance, and Tata BBNow are just a few of the companies that have recently entered the market. Better anti-competition policies and procedures are therefore required in order to guarantee these restaurant partners—particularly the smaller ones—fair play.

    Swiggy to Launch Instamart as a Stand-Alone App
    Swiggy plans to release Instamart as a stand-alone app, focusing on enhancing user experience and streamlining grocery delivery services.
    StartupTalkyNitin Konde