Food aggregators can’t just get away with substandard deliveries in India anymore

Multi-million dollar funding rounds aside, food-delivery startups are facing regulatory heat in India—but no one’s really complaining.

On Dec. 29, the Food Safety and Standards Authority of India (FSSAI) issued a new set of guidelines for them. They mandate:

• Acquiring a licence from the central licencing authority
• Making provisions for arbitrary quality checks by the regulator during any time in the delivery process
• Only selling products with a remaining shelf life of either 30% or 45 days before expiry at the time of delivery
• Signing deal stating sellers’ compliance with food-safety rules, liability rests with food-business operators
• Food establishments have to now mention their FSSAI licence registration and hygiene grading
• Provide the actual image of the dish on their platforms so that consumers can recognise the product
• Before purchase, consumers to be provided information in the Food Safety and Standards (FSS) Act
• Trained personnel to ensure last-mile delivery, product safety must not compromised at the time of delivery

So far, startups such as Swiggy and Zomato operate only as a conduit between the consumer and restaurants, picking up orders and delivering them. The government is now clearly putting the onus on the conduits.

The FSSAI has already been auditing food-delivery apps to ensure compliance on the safety and hygiene fronts.

“Aggregators must begin to use some of their resources in training and capacity building of restaurants for improving food safety and hygiene rather than focusing only on deep discounts and aggressive marketing..,” Pawan Agarwal, CEO of FSSAI, had said in a statement on Aug. 02.

Under the radar

Following a series of complaints against the aggregators for listing sub-standard restaurants and for delivering low-quality food, the FSSAI in July asked 10 such companies, including Swiggy, Zomato, Uber Eats, Foodpanda, and Lime Tray, to delist unlicenced restaurants by July 31.

Despite the directive, licences and registrations of up to 40% of the restaurants listed by the platforms were not verified, according to an FSSAI audit revealed on Aug. 02. By October, though, they had de-listed over 5,000 restaurants.

In December, a video of a Zomato delivery personnel eating food from delivery boxes went viral on social media and caught the company unaware. Zomato identified the executive and suspended him, calling it an “unusual and rare case.” Nevertheless, it triggered a tirade on food-safety concerns.

Therefore, analysts, in general, believe the FSSAI’s move to tighten the industry standards is in the right direction though it can add to the aggregators’ overheads.

“The guidelines are to improve efficiency and quality of service in food delivery. The companies should ensure compliance with the amended regulations,” said Varsha S, associate partner at law firm Dhir & Dhir Associates.

The companies themselves are taking the development positively it seems.

Coping with the change

While Swiggy did not share its specific plans for compliance with the FSSAI norms, it expressed broad agreement with the authority’s initiative.

“In full compliance of Food Safety and Standards Act and Rules, all unregistered restaurants were disabled from Swiggy. We are working with FSSAI to bring the necessary confidence and control in last-mile delivery and safety of food,” Swiggy said in an e-mail response to Quartz’s queries.

Zomato said it recently introduced initiatives like training sessions for restaurant partners to educate them on the subject and to obtain certification.

“We have also tied up with third parties to set up a helpline for restaurants to meet compliance. The DIY kit is also circulated to our restaurant partners to further ease the process. We have also tied up with third parties to help us validate the FSSAI licences of all our restaurant partners,” Zomato said in an e-mail response.

The company also has a supply platform, HyperPure, which helps it source fresh ingredients for the restaurants. The company launched hygiene-rating services for restaurants in late 2017 and has already conducted audits at over 6,000 restaurants in India.

“While we are already compliant with the mandatory directives in the FSS Act, we will work with FSSAI on any measures required to drive the development in the ecosystem,” Zomato said.

Grofers, a grocery delivery startup, said it works closely with its merchant partners to ensure compliance of food safety and hygiene standards.

“But there is some ambiguity. It is not clear what mandatory food information must the aggregators provide to their consumers, or what kind of standards will determine the quality training of personnel,” said Varsha S.