Kerala hotel association boycotts orders from food delivery apps

After online taxi services faced the ire of trade union-affiliated traditional taxi operators in Kerala, it is now the turn of popular food delivery apps to confront boycott of restaurants.

Kerala Hotels and Restaurants Association (KHRA) has boycotted orders from Uber Eats, Zomato and Swiggy in Ernakulam district since December 1, saying that the traditional hotel business has come under stress due to exorbitant commission pocketed by food delivery apps.

KHRA includes 3,000 hotels in Ernakulam district, including Kochi. Around half of them used to take orders from food delivery apps, including Uber Eats, the early mover in the Kerala market.

KHRA state patron Sudheesh Kumar said the delivery apps demand 20-26 per cent commission. In Kerala, the profit margin of the hotel industry is around 20 per cent, he said, adding, “We want the commission to be brought down.”

Kumar said that when the apps were launched earlier this year in selected markets in Kerala, the commission was only 10 per cent. “Then we all had welcomed food apps as they provided a new business opportunity. Even if the boycott is there, a section of hotels will cooperate with food apps,” he said.

Hotels affiliated with the association fear they would face the fate of traditional taxi operators, many of whom were forced to quit the arena with the onslaught of online taxi providers. Even organisations that have signed deals with food apps fear that they would be forced to fall into the trap of online players. Many fear that food apps would launch their own kitchens in Kerala after winning loyal customers.

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The association’s Ernakulam district general secretary J Manoharan said the positive aspect of food apps is that they had increased the appetite for hotel food among public. “The volume of business has increased for all players. But the competition among hoteliers triggered by the attractive price deals offered by apps has hit our pocket,’’ said Manoharan.

K J Baiju, a bachelor who has been ordering food through the apps, said the system was a boon for those who depended on outside food. “The apps ensure timely delivery at attractive prices. Even after the boycott, some hotels are taking online orders. The hotelier should work for coexistence of different business models,’’ he said.

An Uber Eats executive said representatives of three food apps had a discussion with hotel association office-bearers on Monday. “We have managed to win over a section of customers in Kochi by our timely delivery of food at competitive rates. Scores of young men are operating as delivery boys. All three companies are hiring more staff. We have heard the concern of hoteliers over the commission. But we cannot take the decision in Kerala. We are awaiting feedback on their demand from our corporate offices,’’ he said.