The All Pakistan Restaurant Association has announced to boycott Foodpanda in Karachi for three days due to a hike in commission.
All Pakistan Restaurant Association (APRA) has temporarily suspended its services with Foodpanda over repeated complaints made by restaurants across the country. The boycott starting September 15 may affect food delivery services for some restaurants.
According to APRA, Foodpanda is indulging into an anti-competitive business practice and asking restaurants to work with it exclusively, this is something APRA has warned to challenge in the Competition Commission of Pakistan (CCP).
In a letter directed to CEO Foodpanda, Numan Sikander Mirza, APRA has stated that Foodpanda was initially started as a third-party vendor delivery service, but now it is coercing restaurants to shut down their own delivery services in a bid to expand its operations.
This will not only affect the delivery personnel to get unemployed, but will disconnect many restaurants from their customers. Therefore, APRA has called on Foodpanda to allow vendor delivery services of all restaurants to be operational regardless of their size.
APRA chief Muhammad Naeem Siddiqui, in a letter of complaint to the CEO of the company, mentioned:
“Foodpanda repeatedly pressed for increase in its commission from 18% to 35%. In case of non-compliance, Foodpanda threatens to take down the restaurant’s profile from its portal.”
APRA has demanded Foodpanda to immediately forsake unethical methods of siphoning money off restaurants. APRA will permanently stop working with Foodpanda if grievances of its members are not addressed, Siddiqui said.
A majority of APRA members are being pressurized to increase commission despite the fact that the industry runs on low margins, according to the APRA chief. It’s impossible to pay 25-35% commission to Foodpanda.
Consequently, APRA has announced to immediately suspend its services with Foodpanda in Karachi for the time being.
Not only this, APRA has warned to permanently terminate its services with Foodpanda across Pakistan in case the issues mentioned above remain unresolved.
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