The National Restaurant Association of India (NRAI) has reportedly written to its members in the country, alleging that online food delivery services Zomato and Swiggy have been making money at the expense of restaurants through their discount programs. According to a report, the NRAI advisory refers to the Zomato Pay and Swiggy Diner programs, which are said to force restaurants to offer discounts in exchange for commission fees on transactions. Swiggy Diner allows customers to book discounted tables, whereas Zomato Pay is the company’s payment service.
According to PTI, the NRAI’s advisory claims that both Zomato Pay and Swiggy Diner do not charge customers a subscription fee to participate, while restaurant owners must offer discounts of up to 40% on the program.
Restaurants must also pay a commission of up to 12 percent on payment gateway transactions, while other gateways in the country charge a maximum of 1.5 percent, according to the NRAI’s advisory.
The advisory also wonders why restaurants must pay a “middleman” commission to offer discounts to their own customers. According to the report, restaurants must offer discounts to customers who pay through the programs, even if they walked into the restaurant on their own.
Zomato Pay is an online payment mechanism that allows users to make transactions on the service seamlessly, but users can also pay using traditional payment methods. Swiggy Diner, on the other hand, is the company’s service for booking discounted restaurant tables.
“We are confident that we will create tremendous value and growth for the industry with our new dining product, which has now been live in Hyderabad for a few weeks with great results,” a Zomato spokesperson told PTI, adding that the company was looking forward to working with “progressive restaurants who see the bigger picture.” According to the report, a spokesperson for Swiggy did not respond to a request for comment on the NRAI’s allegations.
