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Editor's Note

Why the disruptive economy needs regulation

Former US President Barack Obama had once said – I am a strong believer in the free market. I am a strong believer in capitalism. But, I am also a strong believer that there are certain common goods – our air, our water, making sure that people are safe – that require to have some regulation.

These days, seems like it should include our food too. The last few weeks have seen Zomato and NRAI in a tug fest that has apparently put the FSA on the wrong side of the restaurant industry. In the storm that followed the Log Out campaign, Zomato man Deepinder Goyal tweeted, “It’s not about aggregators vs restaurant; this is about a small restaurant owner vs the large restaurant owner – and we are being painted as bullies.” But Anurag Katriar, the new man at the helm in NRAI, is very clear that he has nothing against the FSAs. In our exclusive interview with him in his office, he reiterates that Log Out has clearly proven that right now being unregulated, the industry is prey to very predatory actions on the part of the aggregators. He stresses the need for a more robust e-commerce policy and says, “e-commerce is the way ahead. We want to be part of it, but on equitable terms.”

The recent GST development of rationalisation of taxes on room tariffs is a very positive sign and we hope it will push occupancies in a market weighed down by the economic slowdown

Another disruptor Oyo Hotels & Homes has said it’s raising US$ 1.5 billion in fresh financing, with founder Ritesh Agarwal investing US$ 700 million into the SoftBank-backed company. This news comes even as some hotel operators have alleged that the startup often ends up taking half or more of revenues through fees that were not initially disclosed, according to a Reuters report. Again pointing to the need for a regulatory mechanism that can resolve such issues and pave the way for more efficient and dynamic markets.

The recent GST development of rationalisation of taxes on room tariffs is a very positive sign and we hope it will push occupancies in a market weighed down by the economic slowdown. This phase will require established companies to push their boundaries and innovate to become their own disruptors. VITS Kamats founder, Vikram Kamat is launching his Purple Beds brand soon – comfortable limited service hotels that offer all the basic amenities that customers expect from a hotel in a comfortable budget. We expect it to create a new dynamism in the market much like IHCL did with Ginger many eons ago.

STEENA JOY
Editor, Express Food & Hospitality
[email protected]

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