PANAJI
Citing unsustainability of the commission-heavy business model followed by popular food aggregator and delivery apps (FADA), restaurateurs in Goa as well as the State chapter of the National Restaurants Association of India (NRAI) have called for increased dialogue between the two stakeholder groups to evolve a mutually beneficial business template.
Pointing out that the business model is not sustainable because neither of the parties is making any money, Prahlad Sukhtankar, head at the Goa chapter of the NRAI, stated that the industry is looking for ways to make it sustainable in the future.
In the early days, the emergence of FADA seemed like a boon for restaurant owners as well as customers, who were coming to terms with using technology to tap into day-to-day utility services.
“An aggregator has given the ideal platform to place an order in a very efficient and time bound manner with the use of an app. Today’s consumer doesn’t want to go through the entire process of making a phone call to order their favourite food. The customer would rather prefer three easy steps until their orders go live and that’s how the app helps,” says Akshay Quenim, member of the NRAI and promoter of Tataki restaurant.
The ‘arrangement’ with FADA helped save the restaurants on overheads like salaries and the cost of hiring delivery personnel and purchasing delivery vehicles. “On the flip side, apart from a restaurant paying a very exorbitant commission to the aggregator, the restaurant is losing control of operational aspects; such as, whether the food is being delivered in the right manner,” Quenim said.
NRAI’s Logout campaign to protest against the discounts and offers being provided to consumers by the FADA at the expense of restaurants helped bring the restaurant industry together to work towards achieving a shared goal. Pranav Dhuri of Café Tato chain in Goa states, “The discounts and offers are being provided to the consumers at the expense of restaurants. If we don’t provide such offers then the visibility of the restaurant gets impacted negatively on the app.”
The NRAI and its pan-India network of restaurants are now tinkering with options. The central government’s newly introduced Open Network for Digital Commerce, which allows restaurants to directly sell food to consumers without the involvement of a third party, and this is also emerging as an alternative option.
Ujjwal Tripathi of Nanbai café near Panaji said, “The fact of the matter is that and currently they (FADA) are not profitable, they’re not making money, they’re loss-making companies. The customers who order from these platforms are enjoying the benefits in the form of discounts, etc. If this continues for much longer and they are unable to either attract enough customers to generate sufficient revenue to cover their losses, or increase their commission rates to compensate for the losses, they may face significant financial challenges. It’s not going to be sustainable.”
