India’s Restaurants Rebel Against Food Delivery Apps
nytimes.com
nytimes.com
It seems disingenuous to frame this "rebellion" as a moral issue. It isn't. It's a business issue. Business owners are free to evaluate their partnerships and pricing strategy on the basis of what is going to best benefit their revenue/profits. And consumers are free to evaluate potential restaurants/apps on the basis of many factors including price. Trying to argue that someone is acting immorally by wanting a discount, is nothing more than crying wolf.
> "Another sore point is customer data. Neither Zomato nor Swiggy shares customers’ names and phone numbers with the restaurant that fills the order, citing privacy concerns. Restaurant owners said that left them with no way to market directly or build long-term relationships with their best customers."
Thank God for that. The last thing I want when I order food online, is for every single restaurant I order from to start spamming my phone/email. This fact alone has lifted Zomato a few notches in my eyes.
If you call me up directly, I will be annoyed.
What about the trees?
Just because you ordered food and didn't cook at home doesn't imply you don't care about the environment. Perhaps you cook at home most days but on this particular day you were going to get home from work late and still needed to have dinner ready for your family. You still want the food delivery to be as environmentally friendly as possible. Thus I eschew being given paper plates, styrofoam containers, etc when I order out (as I can simply use my reusable ones at home with that food).
Whether you care about trees or not, the environmental impact of a paper menu (especially if it’s just a regular piece of office paper, rather than a glossy magazine-style page) is negligible compared to the rest of a delivered meal (well under 1/1000 of the total).
If you can't fit your entire menu on one tri-folded sheet of letter-sized paper [with readable print size], it's time to do a statistical analysis on your orders, and cut all the dishes that don't get ordered enough to recoup the costs of offering them. Move them to the infrequent specials menu, if you really can't stand to never make them again.
If I recall correctly, one of the major reasons single-location restaurants fail is menu bloat. Diners take longer to decide what they want. It's harder to identify the dishes that are least profitable. Prep is more complicated. The order management system might require additional button presses to navigate between pages.
And put the restaurant equivalent of keyboard shortcuts on the menu. As a customer, I like being able to order by number, particularly by single-digit numbers (or single letters). "Give me a number one, a number four, and a number eight, hold the mayo."
That may or may not apply to those restaurants, but a restaurant can't be everything to everybody. They might do better by not trying.
Consider this applied to tech companies: you need to make very different decisions if you want to start a free social media site versus a webapp aimed at businesses.
I think this is more a problem of the business owner believing that remaining in business is a right, not a privilege.
We see this issue being played out again and again across industries from Amazon, to Uber, to food delivery. Why are business's so naive to think they can tame the beast and profit only to end up feeling helpless when it has gained traction ?
I won't hold Zomato as a guardian of user privacy. It is not to protect the user's privacy but to be the sole arbiter of how to profit from that data. They had a pretty big breach last year which leaked all the user's info. Looks like people have forgotten that fiasco.
In my personal experience in India just a couple of decades back restaurants would be frequented by either rich people (obviously) or middle class on a couple of special occasions per year. Nowadays eating outside food even few times per week has become increasingly common. So meal price will be overriding concern with majority of people.
As much as those 'consumer surveys' claim that customers are looking for great quality and new experiences in food. Most folks would rather have average food at low price after an exhausting day. I think apps will have upper hand on this issue. As with all the knowledge of customer preferences for price/taste/cuisine etc they can very well create centralized kitchens producing most demanded items. At that point restaurants will again be in similar place as they were few decades back: filled by well-off patrons or by middle class on rare occasions.
Yeah, like no one ever went to restaurants before the app ecosystem was created.
When you physically go to a restaurant now, you have to be put in a queue with all the people ordering from apps.
I've been in nearly empty restaurants where the wait was unbearably long.
We just kept watching them ship bag after bag of food out the door.
Why not get rid of instore and go deliver only? I get the sense that people don't trust delivery only places even if they would never go to the restaurant in person.
It might be the case that like other similar aggregation businesses, these app services benefit the consumer more than the other actors like the restaurants or delivery agents, but as consumer that could be a good thing.
Because the food for delivery gets sent in plastic or foam buckets, which creates waste and ruins the presentation.
Anything crispy also gets steamed into mush on the way.
You have to use your own plates and silverware and then clean them. Or deal with the guilt of using disposable everything.
I'll either eat in the restaurant, or do takeaway. Delivery is generally a shitty deal.
Ordering food on app is only for the times when I am tired and really don't want to go anywhere. In past 2-3 years, we got this habit of ordering everything on app for various small occasions and everytime we just didn't enjoy the food. Eventually we started again to go to restaurants and it was worth it.
One more thing, I noticed that restaurant ratings don't mean a thing. Even food from 4.5 rated restaurants taste horrible.
For most people, only 2 facors: laziness and discount are the driving factors to use app. Quality of food is distant third factor.
This sounds about right. I was talking to my brother and he had this similar thought process. Once back from work at 9pm, he does not have any motivation or energy to cook. A Rs 100-150 swiggy delivered thali is just perfect for him. If it were more expensive or if there were no delivery option he would simply make maggi or fry egg/paneer and eat with bread. So he would not be customer of restaurant at all.
If variety is an issue apps help with that.
They also have the dark kitchens card to play. Have a food concept that people want to order for delivery but don't want to make it available for delivery via an app? No problem, the delivery apps see the demand for that concept and get one of the dark kitchens to satisfy the demand.
One restaurant leaving the platform will likely be much worse for that restaurant, but many leaving the scheme will be worse for the platform. No one restaurant has much bargaining power to demand better terms, but many together may be able to bargain better.
It seems to me like this is exactly how they demand better terms and change the balance of power in the relationship.
One could say that the platform putting such strain on the restaurants is manipulative because they know that it's very difficult for any restaurant to say no. I think it's just how the market works and think it's great that the restaurants are managing to push back somewhat.
It seems somewhat distasteful to argue that the pricing power of the rich, powerful party should not be countered by the weaker, poorer party improving their pricing power - especially on a moral basis.
Aren't the apps negotiating terms essentially a 'manipulative social movement' with a single app/VC backer/organizer (each)? why shouldn't the restaurant owners organize in order to increase their bargaining power to match?
What they're doing instead is telling the media they've been cheated - that they deserve more money, and Zomato's acting unethically by giving them the advertised service for the agreed price. I'm not sure that's an honest way to look at the situation.
If FTC allows restaurant owners (or any group of businesses) to create pacts like this against their suppliers or customers, next time, they will make similar pacts against you (the customer). "hey, what say, let's all make a pact together and increase the price of that dosa to $50?"
In reality, some industries (most famously airlines) do this kind of collusion through winks and nods anyway and is bad for consumers (very good for the industry as a whole though).
This is typical in India, the rich and powerful screw over others upon which they have power on.
Any links?
"I reviewed some of the recordings for Ghost Truck Kitchen and found multiple false positives, where Grubhub charged the restaurant between $7.80 and $7.92 per call for informational phone calls that did not result in an order."
https://www.vice.com/en_us/article/wjwebw/yelp-is-sneakily-r...
Google "Zomato restaurant issue"
"The number and power of a company's competitive rivals, potential new market entrants, suppliers, customers, and substitute products influence a company's profitability."
There are several hundreds of thousands of restaurants (maybe millions?). There are only 2-3 aggregators. Most of the restaurants are replaceable by a similar one. So aggregators have more bargaining power.
As long as there is a profitable business model for the aggregators, the restaurants will get pushed to their lowest common profits. Without resorting to collusion with other restaurants (or asking the govt. to intervene) the only way to compete is to differentiate significantly that makes the customer desire a specific restaurant.
Both Uber and Zomato have a lot of promotions and the food price is often 60% of what it would have costed if I were to fine-in (I walked into same restaurants a few times to see myself).
The amount of plastic still being used today is unbelievable! Some restaurants send decomposable bags but the majority of the food is Inna plastic container, with plastic cutlery, and in a plastic bag. Zomato has an option to request not to send cutlery, but the environment is also taking a massive toll on this. The streets are full of motorbikes honking for 20 seconds straights every 5 seconds, and the delivery people looked exhausted too, whom I think should be well paid too, while costing the customer more.
Another point here is that the restaurants registered tend to be more cleaner and follow hygienist ways to prepare food. This sounds like a small point in other countries, but I had a bad stomach for a few days and I would gladly take someone else's word over how far I can judge a restaurant how clean it is.
For me, the best balance is placing an order through the app (with discounts, full menu, reviews, etc), walk in, and decide if I would like to return (this time without the app). This way, I get to check the restaurant without spending a lot of time, and the restaurant owner doesn't have to pay the apps for my subsequent orders. I can also try and help reduce plastic usage .
If I'm getting 50% more orders at the same fixed costs with a smaller profit margin on that subset of orders, I'm still netting higher total profits and getting higher utilization on my existing investment..
They have so little incentive to care about, for example, the quality of the food when it arrives, because if it's poor that will reflect on the restaurant, not the service. They will also do things like try to honor orders for restaurants that have explicitly rejected working with the services, because they just don't care what the restaurant wants.
This is supposed to be the restaurant and the service working together to get the customer their food, but the incentives just seem misaligned the whole way. I'm guessing the end goal here for the services is to run the "restaurants" themselves.
Whats that? Its too hard? Well someone should make an app that makes it easy for restaurants and customers to have a relationship with each other, without involving a third party.
What's that, its too hard? Well, the OS vendors should just make it easier for a person to contact another person and place safe orders with each other ..
They already exist and they're installed by default. Maps to find a nearby restaurant, browser to look at the menu, dialer to place the order.
There should be much more robust means of restaurant order taking that could be performed by an OS ..
Thi is my experience around the Middle East and Western Africa.
On the other hand, my anecdotal experience is these food delivery apps typically have had garbage service (my orders are delayed hours, missing items I paid for, etc.) and not properly pay their employees (contractors) while taking losses to capture the market before regulation can catch up and solidify their hold (I.e. cost of entry for small players becomes excessive).
I don’t support the business model, and I don’t give them my business.