Hoteliers want govt to cap discount by food delivery platforms

Hoteliers and restaurants have accused food service aggregators like Swiggy, Zomato, Food Panda, and Uber Eats among others of cannibalizing the market with their predatory pricing and deep discounts and urged the government to regulate them and cap their discounts. It can be noted that all food delivery platforms offer deep discounts to the tune of 50 percent along with other offers, and are still in a cash-burn stage, thanks to their deep-pocket investors.

In a statement, the Federation of Hotel & Restaurant Associations of India (FHRAI) Thursday also expressed its reservations on the Department for Promotion of Industry and Internal Trade's proposal to treat these platforms on par with restaurants and has called for proper regulation and licensing policies for them. "Our foremost appeal to the government is to advise food service aggregators to stop the deep discounting, which is impractical, unaffordable and unconscionable. Deep discounting to the tune of 50 percent and other offers are causing loss of image to individual restaurants on one hand and distort the market scenario on the other," association vice-president Gurbaxish Singh Kohli said.

Pointing out that the aggregators demanding 20-30 percent commissions is adversely affecting the revenue of restaurant owners, he requested the government to rationalize the commissions by capping it at 5-10 percent. The federation also noted that while a restaurant has to obtain multiple approvals and licenses and invest huge capital to commence operations, aggregators are providing platforms to "illegally operated cloud kitchens or dark kitchens", which in most cases are either operating without valid licenses or operate from non-commercial premises.