Oyo, Zomato, Amazon, and Flipkart are chasing growth but the very foundation is shaking

  • The CAIT is seeking probe and has alleged that Amazon and Flipkart are avoiding a tax liability.
  • Meanwhile, OYO’s troubles continue with hotel owners alleging unethical practices followed by the company.
  • Following the NRAI’s path, the Indian Hotel and Restaurant Association (AHAR), which has 8,000 members nationally is also claiming to have logged out of Zomato.
India’s biggest startups have been solving its systemic problems to build businesses. But the system has now started revolting and it could be another trouble that they have to solve.

Startups like Oyo, Zomato, Amazon, Flipkart which have all disrupted traditional setup are now facing challenges that come with overtaking a market.

Here’s a look at how trouble is brewing for the companies.

Amazon and Flipkart

Amazon and Flipkart are united in a rare case – where they both are facing a protest from the Confederation Of All India Traders (CAIT).

While trader protests have been a part of the e-commerce journey so far in India, it has intensified with the CAIT now seeking a probe against Amazon and Flipkart.

The CAIT alleged that Amazon and Flipkart are evading tax. It said that the companies are selling products for much lower than their fair price value, thus avoiding a larger GST cost.

“Since FDI is governed by the FEMA and the Reserve Bank of India, it is demanded that an another enquiry may also be initiated on pattern of receivable funding and its disbursement," CAIT said.

Earlier, the CAIT also organised a nationwide protest against the deep discounting of products on Amazon and Flipkart.

OYO

OYO brought Indian budget hotels online and shot to fame thanks to its many customers. But hotel owners who they work with are alleging that OYO’s practices are unethical.

Recently, a Bengaluru hotelier filed a cheating case against Agarwal and six others claiming that the OYO hasn’t paid him his dues. According to the complaint, OYO was supposed to pay ₹7 lakh a month for room bookings but failed to do so since May 2019.

OYO responded stating that it would fight back with a complaint against the hotelier for "using improper legal means to sensationalise a civil dispute and get attention".

“This matter is currently sub-judice, and we are not at the liberty of commenting on specifics. Having said that, we strongly refute the claims made in the complaint that has been wrongfully filed against our founder and six other office bearers, based on false allegations and exaggeration on a regular commercial dispute,” the company said in a statement.

The case of the Bengaluru hotelier is not isolated. Similar reports have surfaced from across the country against OYO.

Zomato

Indian foodtech unicorn has had a rough few months thanks to one of its bestselling features – Zomato Gold. The National Restaurant Association of India protested against the feature saying that Zomato advertised the ‘elite’ feature which turned out to be a mass product. This resulted in thousands of restaurateurs logging out of Zomato.

The foodtech aggregator had shut down the logout movement by not offering discounts for its gold membership. However, it also extended the service for home delivery, where users could avail the 1+1 and 2+2 offers.

Now, following the NRAI’s path, the Indian Hotel and Restaurant Association (AHAR), which has 8,000 members nationally is also claiming to have logged out of Zomato because of Gold on delivery and other issues like unavailability of delivery executives.
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