Kerala’s hotel and restaurant industry in Kochi is facing a severe crisis due to ongoing protests by a section of hoteliers against rising commission rates demanded by online food delivery platforms like Swiggy and Zomato. Over 80% of hotels and restaurants in the city have shut down operations, impacting both businesses and consumers.
The Kerala Hotel and Restaurant Association (KHRA) is leading the strike, alleging that the platforms’ commission, currently around 30%, is unsustainable and crippling their profitability. They are demanding a reduction to 15-20%. Negotiations with Swiggy and Zomato have failed to yield a resolution, leading to the indefinite closure starting February 21st.
The strike has significantly affected daily wagers and the general public who rely on these services. Many smaller establishments, particularly those dependent on online delivery for a substantial portion of their revenue, are facing financial hardship. While some restaurants are attempting direct delivery, it’s proving difficult to match the reach and convenience offered by the platforms.
KHRA argues that the high commission rates are forcing them to increase menu prices, potentially losing customers. They also point to the platforms’ practice of offering deep discounts, which the restaurants ultimately bear the cost of.
The platforms maintain that their commission is justified by the services they provide – marketing, technology, delivery network, and customer support. They claim to be open to dialogue but haven’t conceded to the association’s demands.
The strike has sparked a debate about the power dynamics between restaurants and online delivery platforms, and the need for a regulatory framework to ensure fair practices. The situation remains unresolved, with no immediate end in sight, leaving both businesses and consumers in a difficult position. The KHRA plans to extend the strike statewide if a solution isn’t reached.
