Online food delivery app Zomato is facing resistance from restaurants over its all-you-can-eat dine-in programme, re- initiating an ongoing battle with food aggregators.
Infinity Dining, which launched in July, allows Zomato Gold customers to walk in to a restaurant and order unlimited meals for a fixed price, via the app. Restaurants say loyalty programme has led to food wastage, while earnings have hardly improved.
“We’ve been receiving complaints from members and will hold a meeting soon where one of the big items on the agenda is Zomato Gold and Infinity,” said a top restaurateur and member of a committee. “The reason restaurants signed up for Gold was because it nudges people to eat out, but it has just attracted bargain hunters.”
Several restaurants have taken to Twitter to complain about Zomato Gold and Infinity Dining. Restaurant associations, too, say they’re receiving more than the usual number of complaints from members, who are seeking their intervention.
“Just like any product, there are segments for which the product works well and there are some where it doesn’t… Infinity Dining is a new product, and we are going to work through all teething issues,” said Gaurav Gupta, COO, Zomato.
Restaurants that ET spoke to said they are unable to opt out of Gold for fear-of-missing-out (FOMO). “It’s FOMO that’s compelling restaurants to continue giving discounts. We cannot step aside and say we won’t participate,” said Rahul Singh, CEO of Beer Cafe and President of the National Restaurant Association of India (NRAI). “In the battle for domination among aggregators, consumers have turned into bargain seekers and restaurants are facing the brunt.”
The NRAI met with government officials in June to highlight concerns about alleged malpractices by food aggregators, but are still waiting for a response.
Singh said the association has again written to the Department for Promotion of Industry and Internal Trade (DPIIT), seeking clarity on how restaurants can maintain a balance between growth and earnings at a time when online food delivery apps fight for market share.