#LogOut Campaign Against Zomato Gold Fuels New Wave Of Controversy

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The protest against Zomato's deep-discounting scheme Zomato Gold has intensified with more restaurant bodies across India joining the #LogOut campaign

Written By Tanmay Patange | Mumbai | Updated On:
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The protest against Zomato's deep-discounting scheme Zomato Gold has intensified with more restaurant bodies across India joining the #LogOut campaign. Now, the Federation of Hotel & Restaurant Associations of India (FHRAI) has extended its support to the #LogOut campaign. FHRAI is the apex body of the Hotel and Restaurant Industry. In August, the National Restaurant Association of India (NRAI) had initiated the #LogOut campaign against food service aggregators (FSA) such as Zomato, Dineout and more. As part of the campaign, restaurants were encouraged not to participate in schemes like Zomato Gold and others.

FHRAI VP Gurbaxish Singh Kohli said in his statement: “The group recognizes the need for a peaceful co-existence of the Hotel and Restaurant Industry with e-commerce aggregators, but is also very clear that the terms of engagement between the two sides have to be equal at all times, that no one can usurp the role of the other, and aggregators cannot dominate the Industry or conduct its business in a manner that is detrimental or negatively impacts the Industry’s growth or profits.”

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“The group is further clear that these aggregators, who are heavily funded by Private Equity Funds, have to recognize that their role is that of a market-place and/or a service-provider, akin to a travel agency or a discovery platform like Yellow Page of yore. Their role is to merely aggregate services of the Industry; they DO NOT represent the Hotel and Food Service Industry. Therefore, they cannot decide or dictate commercials terms to and on behalf of the Industry,” Kohli added.

In its statement, FHRAI also listed 'core complaints and grievances against Zomato and others aggregators' such as deep discounting, delayed payments and penalties, additional charges, 'forced' use of delivery services, data masking of customers, among others.

'Zomato Gold is extremely detrimental'

Meanwhile, NRAI president Anurag Katriar said Zomato Gold misleads a few gullible members into disastrous consequences.

“This group also unanimously agreed that the ZOMATO GOLD is an extremely detrimental product for the Industry and strongly opposes the same," Katriar said.

Katriar also raised concerns pertaining to increased dominance of aggregators like Zomato 'with the help of massive funding being made available to them through venture funds and private equity capital.'

#TakingBackControl

After #LogOut, the group comprising of different restaurant bodies including FHRAI and NRAI has launched a new campaign #TakingBackControl.

"We have to take back control over our Industry, our Business, and stop the pretenders in their tracks from dictating to us and controlling our lives," the statement read.

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In its five-pointer demand, the campaign warns aggregators to consult restaurants and refrain from appeasing customers 'solely' at the cost of restaurants. Aggregators have also been warned against policing and competing with restaurants.

Last week, Zomato Founder Deepinder Goyal said Zomato Gold program benefits restaurants' business and expands the size of the industry.

What's the issue

Thousands of restaurants logged out from the Zomato Gold scheme and similar dine-out programmes offered by other platforms as part of the #LogOut movement. These restaurants claim deep discounting offers by Zomato and other food aggregator apps hurt their business. Zomato had also reached out to restaurants with an assurance to make certain changes to its Zomato Gold programme.

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