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View: Food aggregators beware, restaurants are a lot more than steaming kitchens

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View: Food aggregators beware, restaurants are a lot more than steaming kitchens


Restaurants enhance the quality of food and the eating experience both. Ask a connoisseur which many of us are. And it is this USP of theirs that could help them in warding off inroads being made into their profits by the disruptive aggregators.

View: Food aggregators beware, restaurants are a lot more than steaming kitchens
Indian restaurants are up in arms with the food delivery aggregators Zomato and Swiggy with the Competition Commission of India (CCI) looking into their charges of fleecing—26 percent on an average of the restaurant bills being impounded by the aggregators towards service charges. The other allegations are monumental delays in paying the balance to the restaurants and the aggregators themselves having their ‘cloud’ restaurants constituting the worst form of conflict of interest.
It is a common sight, if not an eyesore, in popular Chennai restaurants to find the delivery boys of the aggregators waiting restlessly outnumbering diners. For this dismal state of affairs, the restaurants have only themselves to blame. They must woo back the diners with everything in their command including a substantial rebate. Come to think of it, if they can part with 26 percent to the aggregators and get the balance two months down the line, what is the harm in parting with say 20 percent to the loyal diners who pay immediately. For good measure, they themselves can launch loyalty programs to reward the diners for gracing the restaurants.
The hazards of getting food delivered to homes have been enumerated ad nauseam. Figuring on top is the wayward ways of motorcycle borne delivery boys out to beat a tough timeline. Ten minutes delivery is a reckless promise that not only is a grave traffic hazard on roads but also a sure compromise on the quality of the food. A dosa rustled up in a minute is bound to be too sticky just a half-baked idli is. At any rate, connoisseurs don’t relish home delivery on the ground that the food often gets soggy and cold by the time they are unwrapped.
The spectacle of mountain (traders represented by ecommerce firms) going to Mohammed (buyer) is not exactly a pandemic development though the pandemic did give a fillip to it. To be sure, ecommerce is there to stay, pandemic or no pandemic especially the ones that cater to the bargain hunting instincts of the buyers. Deep discounts cannot always and completely be attributed to the masochistic burn (deliberate incurring of losses by ecommerce firms with a view to hooking the customers to the habit of online buying) with elimination of enormous middlemen commission thanks to direct buying also being passed onto the cost-conscious buyers. The rash of e-pharma firms mushrooming on the horizon with a promise of 20 percent discount vis-à-vis the MRP is explained by promise of both convenience and cheapness in terms of price.
Ride aggregators too have come to stay with people lacking their own private vehicles or driving skills or both lapping them up as a godsend. Even taxi and autorickshaw drivers see wisdom in sharing 26 percent with the aggregators instead of idling half the time.
It is the food delivery aggregators who might be repulsed partially should the tide turn against them. Gourmets and connoisseurs talk wistfully of their favorite restaurants not only for their ambience and quality but also for the sheer joy of eating together with near and dear ones. Piping hot food served by an obsequious server, salivating at the prospect of a generous tip, goes down well when eaten in the course of light-hearted banter ending with a contented burp!
Indeed, restaurants’ ambivalent quality—sellers or service providers or both—that rattled the service tax authorities that presaged GST is what makes them unique. Restaurants should not be mistaken for kitchens because they are a lot more. To be sure, the aggregators know this which is why they have not made the menu homogenous but categorised by restaurants so that customers can take their pick of both the eatable and its maker. It is another matter though that sometimes a bemused customer wonders whether his dosa indeed came from his favorite restaurant or from the ‘cloud’ or any other kitchen!
It is not as if the practice of food being ordered from the comfort of one’s home is going to fade away completely. In Chennai, for example where the elderly has to fend for themselves, the neighborhood Mamas and Mamis delivering frugal and ‘homely’ food at the appointed time are looked upon as saviors just as old-age homes are. BTW, restaurants in addition to catering to taste buds also cater to mood swings—the order can be changed or modified or enlarged. They are possibly the ones who are better endowed to repulse the inroads made into their profits by the uppity aggregators. Dominos and other pizza brands have shown the way by having their own home-delivery systems. Popular restaurants can join the party if push comes to shove.
— S. Murlidharan is a CA by qualification and writes on economic issues, fiscal and commercial laws. The views expressed in the article are his own.
Read his other columns here
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