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Swiggy Ahmedabad head leaves, boycott by restaurants and hotels continue

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Ahmedabad: It is double whammy for online food aggregator Swiggy in Gujarat. A day after over 500 restaurants and hotels blacklisted the platform for its poor business practices from the state’s financial capital Ahmedabad, the city business head for Swiggy, Rutvij Oza, has stepped down.

“Today is my last day at Swiggy,” he told ET on Saturday evening. He asserted that the current Swiggy-industry confrontation has nothing to do with his resignation. “I was in my transition period since 2 months anyways and will be joining my new company on Monday,” said Oza who was the business head in Ahmedabad ever since Swiggy launched here one and half years ago.

Sources in Swiggy maintained that of its 1500 restaurant-partners in Ahmedabad, about 250 would have joined the protest. “It can not be referred to as a boycott,” the person maintained. Swiggy did not respond to an ET questionnaire on the situation.

As per industry estimates, Swiggy and Zomato together handle 70,000 to 80,000 takeaway orders with average order size worth Rs 270 per day in Ahmedabad city.

However, the restaurants and hotels are up in arms against their business practices pertaining to huge commissions that they allege is robbing them off their margins.

The Hotel and Restaurant Association (Gujarat) has threatened to boycott other aggregators including Zomato and Uber Eats on January 14 if they do not come up with revised business proposals, HRA Committee member Rohit Khanna.

The list of demands put forth by the industry includes – lowering commission, 100% payment made to restaurants in case of cancellation, processing payments every 48 hours, sharing customer database, et al.

Oza had a faceoff with representatives of the Hotel and Restaurant Association (Gujarat) while discussing business practices of online food aggregators on Friday.

HRA president Narendra Somani said: “We are protesting against the huge commission charged by these aggregators that range from 18% to 24%. They charge commission from not just the eateries, but also customers.” He says while business of takeaway has grown, dine-in fallen by over 12% in last one year. Since Swiggy did not relent, we have boycotted it.

HRA Committee member Rohit Khanna said: “If Oza was anyways leaving Swiggy, he shouldnot have represented the company in the first place.” He said Zomato has sought time till January 13 to respond.

“While these aggregators have increased the home delivery business, the opaque nature of commissions and discriminatory practices are a cause of concern. They charge a commission that is a variable, do not share database of online customers who “essentially are our customers”. While big restaurants or eateries can afford to pay high commissions, the smaller ones are arm twisted to cough up fat commissions,” said Ankit Chona, Managing Director at HRPL – Havmor Restaurants and Huber and Holly.

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