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Hotel association locks horns with food delivery apps

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KOCHI: Concerned over business losses suffered by mid-level restaurants and wary that food delivery app promoters are planning to set up kitchens in the cloud in direct competition with them, Kerala hotels and restaurants’ association (KHRA) has decided not to accept online orders for 10 days starting from Saturday.

The association is also planning to launch their own food delivery app to compete with other food delivery aggregators, which they believe are harming their business with aggressive discounts-driven model.

The decision was taken at a meeting of the Ernakulam unit of the association on Monday, attended by over 200 members who are engaged in online sale via apps like Uber Eats, Zomato and Swiggy.

Azees Moosa, president of Ernakulam district unit, said that the decision was unanimous.

KHRA feels that huge discounts are being doled out by them at their expense and is resulting in losses for their members, most of whom own small, mid-level restaurants.

“Providing food to people is a culture and not just a business. The app-based firms are destroying this culture. When people eat out, it benefits economy as a whole,” said Moosa, owner of Malabar Biryani House.

Moosa said one of the players has entered into agreements with some restaurants to make them captive and ensure supply to their customers.

Swiggy had launched its cloud kitchen ‘The Bowl Company’ in Bengaluru early last year. Zomato had invested in Bengaluru-based Loyal Hospitality as part of expanding their cloud kitchen operations.

“They are offering massive discounts for customer acquisition. We all know what happened to cab drivers of Uber and Ola. They will destroy our business in the same way,” said KHRA state general secretary G Jayapal.

Jayapal said restaurants in Kozhikode have been resisting the food delivery apps to enter the city for some time.

Moosa said the margins they have to pay food app promoters are huge.

“Uber Eats takes around 30% from us, Swiggy and Zomato take 23%. They own no restaurants or bother about cost of raw material or labour. They are making a clean profit of around 35%. Restaurants make not more than 25%,” said Moosa.

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