India Restaurants Resist Food Apps

Restaurants In India Are Pushing Back Against Food Apps, Citing Revenue Losses

Restaurants in India are fighting back against restaurant delivery apps like Zomato, Swiggy and Uber Eats, saying that the apps are too customer-centric, offering discounts which help buyers but hurt restaurants by eating into revenue, The New York Times reported. 

Some of the restaurants have joined a movement with a #logout hashtag, which has been popular on social media.

One woman, Aakanksha Porwal, who owns a retro eatery in an Indian suburb near Mumbai, said that food apps have cost her 20 percent of her revenue, and that she joined a program called Zomato Gold, which offered customers two for one deals on meals. 

However, the sign up fee for gold was $550, and she said the customers who use the program are rude and demand more discounts. She also said that Zomato gets a 28 percent commission on every order. 

“Zomato is the greatest thing to happen to a customer,” Porwal said. “The consideration for restaurant owners is literally nothing.”

Many restaurants in the country are tired of what they feel is unfair consideration in the face of customer discounts by food apps.

“The consumer believes that a discount has been his right, not a privilege,” said Rahul Singh, chief executive of the Beer Café restaurant chain and the president of India’s National Restaurant Association. “But all of this is coming out of the restaurants’ pockets.”

While the apps say they provide more business and more exposure from restaurants, the costs of working with the apps have proven too much for some restaurants to bear, and they were forced to close.

On Thursday (Aug. 29), restaurants and executives of Zomato and Swiggy in India met to try and find some sort of compromise, but no decision was made. 

“The customer is addicted now,” said Satish Meena, a senior forecast analyst at a tech research firm in New Delhi. “They have trained the customer that if there’s not a discount today, I’ll wait because tomorrow there will be another discount.”



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.