Zomato, Swiggy and the murky reality of cloud kitchens

It’s a tad difficult to take online food aggregator Zomato’s assertion that it plans to crack down on cloud kitchens operating multiple brands from the same kitchen and under the same licence from the Food Safety and Standards Authority of India and blacklist those not offering “acceptable" quality of standards and service. In reality, these “restaurants" were cloud kitchens which do not have any dine-in facilities or frontage but depend purely on takeaway orders from online platforms like Zomato and Swiggy for business. In fact, the representative body of the restaurant industry, the National Restaurant Association of India, with whom Zomato said it is working to weed out such players and “jointly create parameters to avoid the misuse of the aggregator platforms in such a blatant and abrasive fashion", had actually dragged Zomato and Swiggy to the Competition Commission of India alleging, among other things, that the platforms favoured their own cloud kitchens over legitimate restaurants! “NRAI has further alleged that online platforms are engaging in a dual role on their platform where they list their own cloud kitchen brands exclusively on their platform, akin to private labels, thereby creating an inherent conflict of interest in the platform’s role as an intermediary on one hand and as a participant on the other hand," the CCI observed while ordering a wide-ranging investigation into the business of online food delivery in April this year.