Food­panda faces flak in Pune over dues

Business Standard - - OPINION - SAM­REEN AH­MAD

Ear­lier this month, around 500 de­liv­ery agents work­ing for on­line food or­der­ing plat­form Food­panda staged a protest out­side the com­pany’s of­fice in Pune, al­leg­ing pay cuts and de­layed salaries. Now, its restau­rant part­ners in the city are claim­ing the Ola-owned firm has not set­tled dues.

Sev­eral restau­rant own­ers in Pune told Busi­ness Stan­dard the com­pany had come up with a slew of pro­mo­tions of­fer­ing cus­tomers food at dis­counted rates, which Food­panda promised to fully spon­sor. How­ever, they claim, Food­panda is yet to make the pay­ments.

Saili Ja­ha­gir­dar, who runs a chain of restau­rants in Pune, claimed the com­pany owes her over ~50,000 for two of her restau­rants. “We have lost money over the past six months as they ran around 20 per cent dis­count from their side on our menu. But later they said the dis­count was given by us. Even to­day, I am strug­gling to get my money back,” she said.

E-mails sent to Food­panda re­mained unan­swered, while a com­pany spokesper­son de­clined to com­ment on the is­sue.

An­other restau­rant owner in Pune, Swaty Kumar, said Food­panda had de­cided to sell her food at ex­tremely low prices. The or­ders spiked to al­most four times dur­ing the pe­riod but the pay­ments have been de­ferred for these or­ders, said Kumar, who runs mughlai restau­rant Ri­wayat.

She claims more than 200 or­ders are pend­ing pay­ments, and calls and emails on the ven­dor sup­port line have gone unan­swered. Kumar also said that sev­eral or­ders which were can­celled by users on Food­panda have not been com­pen­sated for, un­like how its ri­vals Swiggy and Zo­mato do.

Ex­perts point out that the flurry of in­vest­ments in the on­line food or­der­ing busi­ness is push­ing com­pa­nies to of­fer heavy dis­counts, in order to grow their user base. More­over, growth has led to a lack of de­liv­ery part­ners in the mar­ket, caus­ing a mas­sive spike in their com­pen­sa­tion.

“There has been a lot of money that has flown in re­cently in all the top food de­liv­ery com­pa­nies and ev­ery­one is eye­ing growth at this point. To achieve it ev­ery­one will use the tools that are avail­able, which I see as a good sign,” said Sau­rabh Kochhar, co-founder and for­mer chief ex­ec­u­tive of­fi­cer, Food­panda.

How­ever, with fast paced growth the propen­sity of com­mit­ting mis­takes is also high. A sim­i­lar sce­nario was seen in the food or­der­ing busi­ness post a bust in 2016 and even in In­dia’s ride hail­ing space where driv­ers staged mas­sive protests once in­cen­tives paid out by Uber and Ola be­gan dry­ing up.

“There is a lot of cap­i­tal and hence a lot of open-hand­ed­ness about spend­ing. How­ever, none of the food de­liv­ery plat­forms is work­ing with their fullest ef­fi­ciency at this point,” said De­vang­shu Dutta, chief ex­ec­u­tive of man­age­ment con­sult­ing firm Third Eye­sight. He main­tains that food or­der­ing is es­sen­tially a logistics busi­ness where ef­fi­ciency in the long term will trump heavy spend­ing in the short term.

Food­panda isn’t the only com­pany in this space that has be­gun splurg­ing money. Ben­galuru-based Swiggy, af­ter rais­ing $100 mil­lion in fresh fund­ing in Fe­bru­ary from lead in­vestor Naspers and Chi­nese on­line-to-off­line plat­form Meituan-Dian­ping, has scaled up pro­mo­tions on its plat­form. Its ri­val Zo­mato too has be­gun spend­ing heav­ily on mar­ket­ing and dis­count­ing fol­low­ing a $150 mil­lion in­vest­ment from Alibaba af­fil­i­ate Ant Fi­nan­cial.

Food­panda was ac­quired by ride hail­ing giant Ola in De­cem­ber last year in an all-stock deal valu­ing the ail­ing food or­der­ing busi­ness at close to $30 mil­lion.

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