Zomato to show separate restaurant ratings for delivery and dining

Food aggregator Zomato said on Thursday that it has revised its rating system for restaurants on the app, and will now show separate ratings for delivery and dine-in.
The firm also declared its ratings algorithm its "most precious intellectual property" and will not disclose it to anyone.
The delivery ratings will be visible in red while dine-in ratings will show as black stars.
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"You will now see two ratings on the restaurant page telling you how users have rated food ordering and dining-in experience with the chosen restaurant. The colour scheme of black and red is retained throughout our app for ease of identification. The ratings will be contextual, that is, when you are browsing restaurants to order food, you will only see the delivery rating indicated by red stars; similarly when you are planning to go out, you will only see the dining rating indicated by black stars," said Riddhi Jain, global head for new products at Zomato.
The change will be visible to users in all of Zomato's food delivery markets - India, UAE and Lebanon.
The firm will also focus on weeding out fake or paid reviews for restaurants. Using machine-learning algorithms, Zomato is figuring out if any restaurant has indulged in practices like offering users free meals in return for five-star reviews, approached popular Zomato users to write positive reviews for restaurants or used PR agencies to farm reviews.

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Zomato is identifying all such "bad actors" retrospectively. "If a restaurant has engaged in review solicitation of any kind in the past, they will see a negative impact on their ratings with immediate effect," said Jain.
A "suspicious reviews" banner will also be added to restaurants who are found to have indulged in manipulating their ratings through any of these means.

Zomato enters video-streaming space, to bundle content with ads on platform

Come September 16, one can watch 3-to-15-minute long videos on the Zomato app, with the country’s oldest online food aggregator announcing a foray into over-the-top (OTT) space, starting with 18 original shows.
These short-format videos, which will be based on food, will be launched over a period of three months. The company has hired stand-up comedians and celebrity chefs like Sanjeev Kapoor, among others, for the shows.

The food delivery platform’s OTT foray comes at a time when online marketplace Amazon is going big with Prime Video and Flipkart is working on its own content vertical.
According to sources in the company, Zomato, which has been trying hard to sell its video advertisements to restaurants, cloud kitchens, and other clients on the platform, believes that entertainment content would help it bring in more restaurants.
“The plan is to weave in content with the advertisements, something what YouTube does on its platform. A video advertisement of a restaurant might play before or in-between the starting of the show,” said a source close to the company.
After listings, Zomato hopes to sell video advertisements to restaurants on its platform. Having content will encourage restaurants to place video ads as the probability of them getting watched by people is higher.
“Available in an all-new videos tab in the Zomato app, these will be categorised by genre letting users watch 3-15 minute videos across shows, recipes, and sneak peek restaurant stories. The Zomato video experience will launch with 2,000-plus videos that include Zomato Originals, which will be available to stream in India, while sneak peek and recipe videos can be accessed anywhere in the world,” the company said.
“We are constantly looking for new ways to engage our users around food. Most of our users visit our app several times a week. This presents us with an opportunity to further delight our users using Zomato Originals” Deepinder Goyal, CEO & founder
Zomato Original shows are centred around food. “We are constantly looking for new ways to engage our users around food. Most of our users visit our app several times a week. This presents us with an opportunity to further delight our users using Zomato Originals,” said Deepinder Goyal, chief executive officer and founder, Zomato.
Infinity Dining off the table
On Friday, the food delivery platform took its Infinity Dining offer of the app amid a battle with restaurants protesting against deep discounting. The programme allowed Zomato Gold subscribers to order unlimited food and drinks for a set price from the menu of the restaurant for a period of time.
Zomato has of late been in the news for all the wrong reasons. Over the past two months, the food aggregator has given pink slips to 601 employees, terming it a move to correct ‘redundancies’. This is more than 10 per cent of its total workforce.
While a record number of 541 employees were laid off on Saturday, 60 were let go last month.
This is not the first time the firm has carried out layoffs, but the number of people let go this year
is the highest.

Zomato lays off 600 employees, says technology had created redundancies

The country’s oldest food aggregation and delivery platform Zomato has given pink slips to 601 employees, shedding its workforce by more than 10 per cent. The Deepinder Goyal-led company has said the move is meant to correct “redundancies”.
While this is not the first time that Zomato has carried out mass layoffs, this is being seen as the biggest so far. As many as 541 employees were laid off on Saturday, after 60 had to leave last month. Earlier, in 2015, some 300 employees were told to go. In a statement, Zomato has put the number of employees after the layoffs at around 5,000.
The company, which has been in the news recently for all the wrong reasons, maintains that it was forced to rationalise the staff strength as improvements in technology resulted in certain redundancies in customer, merchant and delivery partner support teams. Goyal and restaurant owners as well as industry bodies such as the National Restaurant Association of India (NRAI) have been at loggerheads over Gold, Zomato’s much criticised premium membership plan.
“Over the past few months, we have seen our technology products and platforms evolve and improve significantly. While the business has continued to grow consistently, this has led to an overall reduction in direct order-related support queries. We have dramatically improved the speed of service resolution, such that now only 7.5 per cent of our orders need support (down from 15 per cent in March),” said a company spokesperson in a statement.
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“Unfortunately, the culmination of these factors has also led to certain redundancies across our customer, merchant and delivery partner support teams. Today, we let go of 541 people (10 per cent of Zomato’s strength) across these support teams,” the company spokesperson added.

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Calling it a painful decision, Zomato said it had extended a severance pay of two to four months, based on tenure. Family health insurance cover will remain till end of January 2020.
Zomato claimed it had hired 1,200 persons across functions (not inclusive of last-mile delivery fleet) and another 400 in off-rolls positions this year. “We are currently hiring in our technology, product and data sciences teams. Zomato continues to remain a net job creator in the ecosystem by creating tens of thousands of delivery partner jobs, as well as multiple times more indirectly through our partners across various verticals,” it said.
Among the earliest unicorns and now valued at $4 billion, Zomato has been fighting a battle for supremacy with its biggest rival Swiggy. Zomato has been on a lookout for funds to sustain this battle but has not been able to so far.
In a series of recent tweets, Goyal admitted the company had made mistakes with its premium membership plan. “Somewhere, we have made mistakes and things haven’t gone as planned. This is a wakeup call that we need to do, 100x more for our restaurant partners than we have done before,” Goyal tweeted, referring to an ongoing protest called #Logout, urging restaurant owners to fight the deal-based schemes offered by players such as Zomato, EazyDiner and dineout.
While the company has made changes to its product, many of the high-end premium restaurants are still staying away from Gold as they believe it is just a deep discounting tool.

Zomato says restaurant prez offers the same discounts he campaigns against

Amid an escalating face-off between restaurants and aggregators, online food ordering platform Zomato on Thursday took a dig at restaurant association head Rahul Singh saying he was offering discounts at his own The Beer Cafe chain of outlets, proving that he was not against such policies.
Singh, who heads 1the National Restaurant Association of India (NRAI), hit back, saying "brokers cannot enjoy the same right as owners!"
In a series of tweets, Zomato founder Deepinder Goyal said: "I welcome the NRAI president, Rahul Singh embracing the Gold standard at his own restaurants. Welcome to Gold, Rahul! @NRAI_India".
Singh is the chief protagonist behind the #logout campaign against aggregators providing "deep discounts" on their platforms and hurting the restaurant industry. The Beer Cafe's app was also offering a 'Gold' scheme.
"This proves that Rahul Singh, is not really against deep discounts, as these discounts are being offered on his own brand, on his own app," Goyal tweeted, attaching a statement. "This logout campaign as it seems now is driven by Rahul Singh, along with the participation of a few large restaurant owners, to use the NRAI platform to sabotage aggregators and benefit themselves."

Claiming that aggregator platforms were being "painted as bullies", Goyal said Zomato will stand by the changes made to its own 'Gold' programme as they are in the supreme interest of its restaurant partners and members.
When contacted, Singh, in his capacity as Beer Cafe founder and CEO, said the company understands the importance of loyalty "as it has to be earned, not purchased".
"It's for our top 500 'BeerOcrats', a privilege. Our loyalty program has been up since 2014 and has 3.5 lakh downloads when Zomato was a director app. As a brand owner, we have the right to provide privileges to our loyalists. Brokers cannot enjoy the same right as owners!" he asserted.
Zomato, which initially claimed that the logout campaign was driven by vested interests, had on Wednesday made sweeping changes to its Gold programme.
Over 2,000 restaurants in several major cities have reportedly delisted themselves from the dine-in programmes of services across aggregator platforms over "unsustainable" deep discounting offered by the aggregators. Zomato has lost 65 restaurants, which is 1 per cent of its restaurant partner base of Gold.
"On a democratised platform like Zomato, large restaurant owners have to compete with independent restaurants on a hyperlocal basis, and are not able to leverage their large presence to pull more distribution/profits," Goyal said. "An aggregator's most important job is to level the playing field for everyone. This is about aggregators vs restaurants; this is about the small restaurant owner vs the large restaurant owner - and we are being painted as bullies."
He said Zomato stands by the changes it is making to Gold, saying they were in "supreme interest" of restaurant partners and valued members. "It helps everyone win," he said.
Refusing to budge on its stand on discounting schemes, NRAI had on Wednesday stated that the restructuring of the Zomato Gold scheme would not resolve the key issue of deep discounts and that its members will continue to stay logged out.
Restaurants in Delhi, Mumbai, Bengaluru, Kolkata, Goa, Pune, Gurgaon and Vadodra have exited platforms including Zomato, EazyDiner, Nearbuy, MagicPin and Gourmet Passport under a #Logout campaign, claiming that "unsustainable" deep discounting offered by the aggregators and table reservation services was hurting their business models.

Zomato to invest Rs 56 crore to set up 20 warehouses by 2020

Online restaurant guide and food ordering firm Zomato Monday said it will invest around Rs 56 crore to set up 20 more warehouses across the country by the end of 2020 under its B2B platform, Hyperpure.
The company currently has two warehouses -- one each in Bengaluru and Delhi -- with a combined capacity of 9,000 metric ton (MT) per month.

"We will be adding 20 more warehouses by end of 2020 across the country. To set up a hyperpure warehouse, the approximate investment is USD 400,000 (about Rs 2.8 crore). There is a separate cost for operationalising and scaling up," Zomato Co-founder and COO Gaurav Gupta told PTI.
With Hyperpure, the company has been able to disintermediate the supply chain, providing restaurateurs access to fresh, clean, fully-traceable food ingredients, he added.
The company Wednesday launched its 40,000-sq ft warehouse in Delhi which is designed to supply 5,000 MT capacity per month and is equipped to serve 3,000 restaurants every day.
With setting up of 20 more warehouses across 18 cities, the company is targeting a combined capacity of 90,000 MT and 700,000 sq ft, Hyperpure founder Dhruv Sawhney said.
The warehouses would be set up in Delhi, Bengaluru, Mumbai, Pune, Chennai, Hyderabad, Kolkata, Jaipur, Ahmedabad, Chandigarh, Nagpur, Lucknow, Vadodara, Coimbatore, Kochi, Agra, Goa and Surat, he added.
Zomato is also planning to launch its warehouses in international markets, he added.
When asked about the timeline and the countries earmarked for launch of international operations, Sawhney said: "It would be in the markets Zomato is present." He, however, did not provide any timeline or the name of the country for the international foray.
Previously know as WOTU, Hyperpure was launched in August 2018 to supply fresh ingredients to restaurants. It is a B2B platform for supplying food ingredients to hotels, restaurants and caterers.
Hyperpure works directly with a large network of farmers, mills, producers and processors, and builds and monitors relationships with the source of each of its products.
Founded by Deepinder Goyal, Zomato is a restaurant review, restaurant discovery, food delivery and dining out transactions platform providing information for over 1.4 million restaurants across 24 countries.

The Zomato boomerang: To spit or to swallow - that is the question

It must have been the biggest nightmare to have a live video of one of your delivery boys actually opening up a food pack, partaking of its contents, re-arranging them, and closing the food pack again for delivery to an unsuspecting customer. Zomato took the hit right on the chin — with an explosive impact. Within minutes, social media was ablaze. So enormous was the inferno of disgust and hate that Zomato was forced to put out a statement on its blog against food tampering saying:
“Last night, we came across a video of a delivery executive in a Zomato t-shirt, carrying a Zomato delivery bag, eating food out of boxed orders and replacing each one after resealing them, back into the delivery bag. The video suggests that he consumed some of the food meant for delivery to users, on his way to the drop points.

We want our users, restaurant partners and all stakeholders to know that...
1. We take these kinds of reports extremely seriously and upon thorough investigation, we’ve found that the video was shot in Madurai. The person in the video happened to be a delivery partner on our fleet. We have spoken to him at length – and while we understand that this was a human error in judgement, we have taken him off our platform.
2. We would like to iterate that given our multiple communication channels with users, who expect the highest standards from Zomato and highlight the smallest of deviations to us as soon as they receive their orders, this is highly unusual and a rare case.
3. Unfortunately, this also highlights a real possibility for tampering with the food on the way to delivery from a restaurant. We take this very seriously and will soon introduce tamper-proof tapes, and other precautionary measures to ensure we add an extra layer of safeguard against such behaviour. Additionally, we will educate our delivery fleet of over 150,000 partners to highlight or escalate any such deviations to us, while also encouraging our users — the custodians of our platform — to highlight the smallest of anomalies to us.
4. And finally, our delivery partners are the face of our brand, and the heart of our success in growing to become the largest food delivery platform in the country. Our food delivery business has grown immensely over the last year on the back of our large delivery partner fleet that work very hard to ensure that Zomato translates to a high quality food experience. We thank them and the strong support and trust from our restaurant partners, consumers and investors.
Zomato maintains a zero tolerance policy for tampering of food. This particular incident, while unfortunate, only makes our commitment to fleet training, scheduling and process even stronger. We stand behind our extensive fleet who do the right thing across many hours of the day.”
The reason I have reproduced above the entire Zomato perspective is because it raises a number of pertinent issues for debate.
1. The Zomato statement starts with a very ambiguous description of ‘a delivery executive in a Zomato t-shirt, carrying a Zomato delivery bag’ but does not acknowledge straight upfront that the video is filmed on a Zomato delivery person. Wonder why? The statement does go on later to confirm that ‘the video was shot in Madurai. The person in the video happened to be a delivery partner on our fleet.’ Why the dilly-dallying? Happened to be? Why the circumventing?
2. The act of opening up food packets meant for delivery, and the delivery boy partaking of its contents has been termed as ‘a human error in judgement’(sic). Is that description too polite? Too politically correct? Was this not just pure cheating? Unethical behaviour? Well, social media has been abuzz both in protesting the tampering, and then in supporting the delivery boy because he was so very hungry. Even at the cost of being politically incorrect, hunger or no hunger, the behaviour of the delivery boy is inexcusable as far as I am concerned. For a large part of this country, the food had been made jootha, which has both connotations of bad hygiene and elements of wronged religious beliefs.
3. Zomato says, ‘users … expect the highest standards from Zomato and highlight the smallest of deviations to us as soon as they receive their orders’. Well, the user cannot be expected to know that the food packet has been pilfered unless a video like the present one surfaces and creates doubts. So, the onus of keeping up standards is on Zomato, and not the customer.
4. The proactive positive part of the Zomato statement is the promise that they ‘will soon introduce tamper-proof tapes’ and ‘educate our delivery fleet of over 150,000 partners to highlight or escalate any such deviations’. This is really the action part of the statement and could have been stated with even more sincerity, and heart-and-soul, to assure customers that prompt remedial action has been taken, and Zomato is alive to the issue. But stating that there are 150,000 partners also focuses on the magnitude of the education that will be required in terms of training, and values/ethics sensitisation, to a group of individuals who have perhaps no other visible skills apart from the ability to drive a two-wheeler at break-neck speed.
5. It is the bit in the statement about, ‘Our food delivery business has grown immensely over the last year on the back of our large delivery partner fleet that work very hard’ that has actually boomeranged on Zomato. While Zomato was flooded with brickbats when the tampering video first went live on social media, the news of the sacking of the delivery boy was soon met with a lot of derision and denouncement in the very same forums as it was felt by many that the delivery boys live a life in hell, with no time (perhaps no money) to eat despite delivering food to customers 24x7. The ‘work very hard’ bit actually came back to bite Zomato. The temptation to fork out a bit of the contents from delivery boxes was seen as nothing but normal human behaviour when faced with acute hunger after long, long hours of work. Somehow, after the initial revulsion, social media started to support the delivery boy, sympathising with the long and ceaseless hours that these companies drive their so-called ‘delivery partners’, so much so that there are repeated references to slave-driving on social media. That of course is debatable but the tsunami of support for the delivery boy has surprised everyone, and I am sure Zomato, too.
Coincidently, Zomato’s rival Swiggy has been running a new campaign over the past few weeks. After its very successful IPL campaign with the old man eating the gulab-jamun, Swiggy for some reason decided to focus its new communication on its delivery partners and how they need recognition. This was of course well before the Zomato controversy.

The latest effort from Swiggy centres around how hundreds of thousands of Indians interact with Swiggy’s delivery ‘partners’ each day. These ‘partners’ (delivery boys) take unknown turns to reach unknown lanes to meet strangers with a smile on their face but remain unknown to consumers who just refer to them as ‘Swiggy’. Through the #WhatsInAName video, Swiggy endeavours to change consumer behaviour and bring more dignity to the job of its ‘hunger saviours’ by urging consumers to call the boys by their names. As I said before all of this was conceived, ideated and aired much before the Zomato episode.
I had my reservations about Swiggy’s new communication even when it first aired. I had written in a recent piece for The New Indian Express that I didn’t quite agree with Swiggy trying to use the ‘naming’ of the delivery boys as an advertising idea. Companies spend infinite amounts of monies to bring about standardisation in their product offering and their brand. The Swiggy delivery boy is part of that standardisation, in looks, in feel, in service. Getting to know him is really not important for the customer, unless of course Swiggy converts each delivery boy into a relationship manager wherein only that delivery boy will service that specific customer time and over again. Since every Swiggy delivery is randomly executed by a different delivery boy, just knowing that the Swiggy guy represents everything the company or brand stands for — infinite choice, timely delivery, and polite 24/7 service — is all that matters to the customer. Whether the boy is called Umesh or Umaid should not come into the equation.
Doing that is actually calling for trouble. There have been past reports on how Uber and Ola customers have for example objected to drivers from another religion and/or community driving them around. Similarly, memory is still fresh on how an Airtel customer refused service from a Muslim representative demanding instead to be catered by a Hindu.
To me the name of the Swiggy boy is an irrelevant detail. In fact, if you were to go by the experience of customer service centres and call centres of various brands globally, the service executives rarely, if ever, use their real names. They instead put out anglicised names like Peter or Tom or Jane to customers who ask. The brand they represent is all that matters in the conversation, not the identity of the agent.
The Zomato controversy has many lessons. First and foremost, with the explosive growth that the digital food service industry has had in the past few years, there are no standards, no guidelines on how the industry must train, certify and handle its workforce, especially the delivery boys. In fact, 99% of delivery boys across food service brands do not wear helmets and, through their rash driving, are actually responsible for a number of road accidents. We won’t even go so far as the education for ethical behaviour; I think classes in driving/bike riding and road safety are an even higher priority for these ‘delivery partners’.
Second, there have to be proper norms and proper tracking and proper auditing of the work hours and work conditions of these hunger saviours. Social media is full of stories of food delivered at 1:45 am to a customer with the delivery boy yet to make another couple of delivery stops before he can go home and have his dinner.
Three, while a lot of love and concern has been voiced by many on social media for these delivery boys, fact is not very many customers actually leave a tip for the same delivery boy while booking an order online, or physically hand him a few rupees while receiving their package. In the US, tipping is an intrinsic part of the service process and the service provider looks forward to that crucial income from his endeavours. In fact, working at a restaurant or bar is very, very common for students, purely because the tips are good and help pay their way through college. So, in India, all the social media noise-makers need to put their money where their mouth is — literally so.
Last, has the Zomato brand taken a hit? Well, yes and no. This controversy will be forgotten in the next few days. That we all know. Some customers may remember the Zomato promise of tamper-proof packing, some may not. But for the likes of Zomato or Swiggy or Foodpanda or similar others, the customer has been sensitised for all times to the perils of the food pack being pilfered. An important matter of trust has been exposed. And that really has been the biggest downer of this entire episode. Trust lost at infinite brand cost.
The author writes on a wide variety of marketing subjects
Disclaimer: Views expressed are personal. They do not reflect the view/s of Business Standard.