Foodpanda is working to weed out fake restaurants and those vendors on its network that were gaming the system and getting paid for orders that were never placed or delivered to customers.
The company is part of the Rocket Internet-owned brand that has a presence in 40 countries. A recent report highlighted lack of oversight in the top management of the company that resulted in the app taking orders from restaurants that either don’t exist or have closed down. A physical verification of the businesses would have resolved the problem but that was not done.
“It would be an anomaly to say our database is 100% clean now. We are 99% clean,” said Saurabh Kochhar, CEO of FoodPanda, in a Economic Times report. Kochhar had joined the company after its acquisition of TastyKhana in November last year and was appointed CEO in March. Rohit Chaddha, who was heading the company before that, resigned in August.
Kochhar said that Foodpanda is removing 500-1000 restaurants every month to clean up its roster. Taking orders from fake restaurants meant that the company was paying for food that was never delivered or was offering select customers, who knew that the restaurant was closed, a different choice of restaurant for free. “There is always 1% of vendors, sellers, restaurants and drivers in e-commerce industry who try and game the system,” Kocchar was quoted as saying in the report.
Unlike Zomato, which has managed to tackle the issue by providing iPads to restaurants that get an order through its app, Foodpanda woke up late to the issue. It has now got systems in place to detect IP addresses and locations of restaurants on its network. It has got enough funding — $310 million — to be able to deal with the losses.
Foodpanda’s competition in the space has heated up with a host of apps such Zomato’s Order, TinyOwl, Swiggy and Dazo, all of which raised venture capital funding and are competing in India’s $10-billion food delivery market.