FoodPanda vs Karachi restaurants: What is happening?
Recently, the All Pakistan Restaurant Association (APRA) announced that Karachi restaurants would no longer do business with FoodPanda because of its “unfair practices”.
While speaking to a media outlet, a small restaurant owner, registered on FoodPanda, complained:
My restaurant is suffering due to delivery problems. Third-party delivery does not keep riders involved or connected to the business. Smaller owners suffer greater than larger chains because the latter can still afford this cut in margins.
Another FoodPanda registered restaurant said:
The restaurant industry is already hit hard by the Covid-19 lockdown, and now is the time when it needs maximum support from stakeholders. We did raise similar concerns earlier, but there has been no permanent solution from the high-ups, which has led us to announce the suspension of services with FoodPanda.
On Monday, the Chairman of APRA, Muhammad Naeem Siddiqui, wrote a letter to the food delivery service’s CEO. The letter stated the members’ rising grievances and concerns because FoodPanda was “repeatedly pressing for an increase in commission and making some important demands”.
The letter contained a warning, which said:
If FoodPanda does not stop unfair practices, APRA will consider ending business with the company permanently, starting from the 15th of September.
Explaining the reason for discontinuing service with FoodPanda, the letter further explained:
Vendor delivery is the original concept of Foodpanda, and its delivery was launched as an optional service. Forcing restaurants to close their vendor delivery – which will only increase unemployment but will also disconnect the food outlets with customers – is not acceptable at all. Vendor delivery should remain operational regardless of the size of the brand.
Maintaining his stance and justifying his decision, Chairman APRA said:
A majority of members are being pressurized to increase commissions, but it is impossible to pay 25-35pc commissions for aggregation services. It is incredibly difficult for new entrants, as their startup costs rise drastically. We need to ensure that there is a cap on the commission that FoodPanda may charge.
Muhammad Naeem Siddiqui further shared:
FoodPanda managers blackmail APRA members to increase the commission from 18 percent to 25 percent; otherwise, their brands would be shut from the portal. This threat is the most unethical way of extorting pressure on any member to accept the terms & conditions. It needs to be stopped immediately.
Expressing his concern further, the APRA President said:
Our members have also complained that FoodPanda asks them to work with restaurants exclusively, which falls under anti-competitive business conduct and can be challenged in the Competition Commission of Pakistan.
Concluding the letter with a warning, Siddiqui stated:
All APRA members will be closing their tablets from the 15th of September onwards, initially in Karachi. If no resolution is achieved, we will be left with no option but to permanently close the FoodPanda services nationwide.
Following the letter, various restaurants took to their social media and announced the boycott of FoodPanda. Many spread awareness about how their valuable customers can order directly from them now.
It should be noted that CareemEats, EatMubarak, EatOye, and Cheetay are fierce contenders in the home delivery industry. Only time will tell whether FoodPanda succumbs to the competition amid its recent loss or manages to restore its confidence amongst eateries.
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