Restaurant Association Boycotts Zomato Gold Delivery Service

Zomato Gold discount program for deliveries was started in September this year.

Zomato Gold is also available for food deliveries.

(Photo: The Quint)

The Indian Hotel and Restaurant Association (AHAR) has decided to boycott delivery services under Zomato Gold. The association unanimously took this decision at a meeting held on Thursday in Mumbai. Nearly 300 restaurants have decided to boycott the service.

The premium loyalty program by Zomato has not gone well with AHAR. The association says Zomato Gold doesn’t offer any kind of incentives for hoteliers and it would only benefit the food aggregator.

Earlier, the National Restaurant Association of India had opposed the launch of the program on deliveries, while also protesting the deep discounts offered to dine-in customers.

In July 2019, Zomato launched another service, Infinity Dining, for Zomato Gold members, where one could order anything from the entire menu with unlimited servings at a fixed cost.

The point of such discounts and offers from Zomato and others was to get diners into restaurants more frequently. But some restaurants are having none of this “deep-discounting” anymore. It’s hurting their profits, they say.

“We had very clearly told the Zomato officials that we are completely against the Zomato gold delivery service scheme. It has been almost a month after our meeting and we have decided to boycott the service. We have not taken any decision on the Zomato gold dining services, but we are completely against the Zomato gold delivery services. Our members who have taken their services will stop the same with an immediate effect.”

Santosh Shetty, President, AHAR

Earlier in August, the National Restaurant Association of India started the movement asking restaurateurs to #Logout from all discounting apps. Subsequently, almost 1,200 restaurants that were a part of the Zomato Gold logged out saying it was hurting their profits.

The Quint reached out to Zomato for a response on the AHAR boycott but the company didn’t want to comment on the matter.

AHAR also raised concerns over commission rates for delivery. It said that the commission charged by Zomato is arbitrary. There are times when the commission goes to almost 25 percent which makes it difficult for the restaurants to do business. Most of the brunt has to be taken by the customer and the overall price of the service is increased.

AHAR has asked Zomato to completely abolish the generous discounts it doles out on deliveries as it's a loss incurring program for many restaurants and not to discount beyond 15 percent including GST.

Despite this move, the restaurants and Zomato will have to figure out a way to coexist in harmony. Indian consumers are not likely to give up on the lure of discounts as that’s the first thing that many look for before ordering food online. And with competition like Swiggy around, it’s a tough battle.