NRAI Says Zomato, Swiggy Discounts Against Restaurant Owners’ Interest

The National Restaurant Association of India (NRAI) has reportedly written to its members in the country alleging that online food delivery services Zomato and Swiggy have been making money through their discount programmes, at the expense of restaurants. According to a report, the advisory by the NRAI refers to Zomato Pay and Swiggy Diner programmes, which are said to make restaurants offer discounts, while paying commission fees on transactions. Swiggy Diner lets customers book tables at discounts, while Zomato Pay is the company’s payment service offered to customers.

According to a report by PTI, the NRAI’s advisory alleges that both Zomato Pay and Swiggy Diner do not charge a subscription fee for customers to participate, while restaurant owners must offer discounts of up to 40 percent on the program.

Restaurants must also pay a commission of up to 12 percent on transactions made via payment gateways, while other gateways in the country charge a maximum of 1.5 percent, the NRAI reportedly claimed in its advisory.   

The advisory also questions why restaurants must pay a commission to a “middleman” to offer discounts to their own customers. It also alleges that restaurants must offer discounts to customers paying via the programmes, even if they walked into the restaurant on their own, as per the report.

Zomato offers an online payment mechanism called Zomato Pay, which allows users to make transactions seamlessly on the service, while users can also pay using regular payment methods. On the other hand, Swiggy Diner is the company’s service to book tables at restaurants at discounted rates. 

“With our new dining product, now live in Hyderabad for a few weeks with great results, we are confident that we will create tremendous value and growth for the industry,” a Zomato spokesperson told PTI, adding that the company was looking forward to working with “progressive restaurants who see the bigger picture”. The report states that a Swiggy spokesperson did not respond to a request for comment on the NRAI’s allegations.