After the recent controversy over Zomato’s alleged bias towards customers from different communities, problems for the food delivery app are yet to get over. Recently over a 1000 restaurants from across the country have delisted themselves from membership and restaurant reservation apps citing the adverse affects on their businesses due to the their deals and discount driven models.
The move led by the National Restaurant Association of India (NRAI) triggered a #Logout movement against the similar apps like Zomato Gold, MagicPin, EazyDiner, Nearbuy, and Dineout. Taking note of the developments Zomato CEO Deepinder Goyal took to the micro blogging platform and tweeted, “In the interest of consumers, we request restaurant owners, to stop the logout campaign, and have a collaborative discussion with internet aggregators for finding a sustainable way forward,”
Our thoughts on the restaurant industry’s stand against deep discounting –⁰
1 – Zomato Gold has been a major hit, but we understand that bargain hunters have also joined Zomato Gold and they are hurting some segments of the restaurant industry very badly.
— Deepinder Goyal (@deepigoyal) August 17, 2019
Earlier, around 300 restaurants in Gurugram had threatened that they will log out of such discount driven paid membership programs such as Zomato (Gold), EazyDiner (Prime), MagicPin among others.
“NRAI’s Gurgaon chapter has come together in the #logout movement to give Gurgaon freedom from aggregators who have distorted a vibrant marketplace by aggressive discounting and predatory pricing,” NRAI had said on Wednesday.
“Restaurants have already suffered due to increasing rentals, and denial of input tax credit. The situation is now aggravated through the anytime anywhere any day discounting behavior. The restaurateurs have therefore come together to detox consumers from discount addiction. It will have some withdrawal symptoms for a short term, but one has to see a healthier lifetime cycle,” NRAI added.
While these discounts have been instrumental in giving customers cheaper and efficient dining experiences, the restaurant owners have surely felt the brunt of these deep discounts. In a statement Zomato had earlier clarified that this campaign “is being instigated by a few restaurant owners and is not the voice of the restaurant industry at large.”
“We do not see any impact on our Gold subscribers due to the #Logout campaign. Most restaurant owners in these cities are in touch with us and are not planning to join this campaign. We are told that #Logout is being instigated by a few restaurant owners and is not the voice of the restaurant industry at large. For the industry, Zomato Gold has been a key business driver for the last 18 months and they don’t want to be driven by interests of a few restaurant owners,” a company spokesperson had said.
Earlier Zomato was at the centre of this controversy when one of the users of the Food Delivery app had cancelled an order as the delivery boy was a non Hindu. After cancelling his order, he tweeted about it and also said that he did not even insist for a refund and he could not be forced to take a delivery. However Zomato’s biased response over the issue did not go down well with the users on social media and resulted in a massive uninstallation campaign.