Calls for slashing platform fees as restaurants across Australia rush for food delivery apps

Food delivery apps report a surge in the number of restaurants signing up for delivery as restaurants across Australia become delivery and takeaway only

While restaurants are scrambling to signing up to delivery platforms as restaurants and cafes across the country become delivery and takeaway only, some are calling for the platform commission fees to be reduced.

Food delivery company Menulog told Business Insider Australia it has received “a high volume” of requests to join its platform.

Requests are coming from restaurants and cafes, as well as grocery, convenience stores and more, a Menulog spokesperson told Business Insider Australia via email. We have boosted resources to be able to meet the demand from these businesses as quickly as possible to ensure they can continue to operate.

Fellow delivery service Deliveroo said its orders have been steady. Deliveroo Head of Corporate Affairs Joanne Woo told Business Insider Australia via email deliveries have kept at their usual pace during this time period, with the most popular companies being fast food chains KFC, McDonalds, Guzman y Gomez, Oporto and Subway.

Menulog, along with other delivery platforms like Uber Eats, DoorDash and Deliveroo, have also implemented a range of measures to support both their drivers and restaurants on their platform, such as offering contactless delivery.

The services have also announced changes to some of their fee structures.

Menulog halved all commission on pickup orders until further notice and is waiving all activation fees for restaurants aiming to join the platform. On top of that, Menulog will invest $3 million to promote local restaurants open for pickup and delivery.

DoorDash removed delivery fees on orders from restaurants and waived commission on all pickup orders placed through its platform. Plus, new restaurants that sign up to the platform can sign up for free and don’t have to pay a commission for 30 days.

Uber Eats on the other hand, announced $5 million in funding to help restaurants in Australia and New Zealand attract more customers. Restaurants now have the option of receiving daily instead of weekly payments during the coronavirus pandemic, and won’t have to pay a service fee on pickup orders until June 30. Plus, Uber Eats is waiving activation fees for new restaurants that want to sign up.

For Deliveroo, its focus is ensuring riders can continue to work safely and restaurants can keep trading.

During these challenging times, our focus is on ensuring restaurants can continue to trade and that the Australian public can still order from local restaurants – supporting the local economy and assisting those that are in self-isolation, she said.

Deliveroo is also working with caterers and fine dining restaurants.

We are also actively working with small businesses who traditionally have not operated on food delivery platforms, such as caterers and fine dining restaurants, to help them pivot their business to the online channel so that they can continue to trade.

Despite the measures delivery companies have implemented to support restaurants, some are calling for them to reduce or eliminate their commission fees altogether.

Melbourne food writer Dani Valent started an online petition calling for Uber Eats and Deliveroo to reduce the up to 30% commission fees they charge to restaurants.

These are incredibly difficult times for restaurants and cafes, she said. But it is a time when delivery is likely to play a very important role for not only people who are stuck at home, but also for businesses who aren’t able to have perhaps any or as many customers in their venues.

Valent highlighted that she wanted to see these delivery services give restaurants “a better chance of survival through this crisis.”

Paul Schulte, director and partner in the Prince of York, a wine bar and restaurant in Sydney, told Business Insider Australia he has both signed up to Uber Eats and signed Valent’s petition.

He explained that he joined Uber Eats because “we don’t have a choice” but agrees that the commission fees are too high.

We can’t pay 35%, he said. We all work on tiny margins and we’re trying to do what we can.

In the midst of these increasingly uncertain times, Schulte has personally worked to make sure he supports his staff. He said he insured their cars to keep them in a job and allow them to deliver packages themselves.

It’s better to try and keep my staff and look after them than pay big companies 35%, he said.

With Scott Morrison’s order to shut down restaurants and cafes except for takeaway and delivery, the industry faces a tougher challenge.

Schulte said the impact of the coronavirus has already caused a “dire” situation in the city.

The biggest issue is just the unknown, he said. You can’t budget for it, you can’t figure out how long you need to lose money for. If this is going on for six months, what reopens will be very minimal.

On her Facebook page, Valent described what restaurant owners said following initial social distancing requirements.

A lot of restaurateurs are saying that’s the nail in the coffin, they’ll have to close, she said.

She added that many restaurants are scrambling to pivot to the delivery business model, but for some it would be a significant challenge.

It’s not a comfortable place for many of them, she said. Delivery looks like it’s going to be the only lifeline for a lot of these businesses.

Steven Premutico, founder of restaurant payment platform me&u, told Business Insider Australia the hospitality industry is “truly on its knees”.

It’s not a crisis, it’s a breaking point, he said.

Premutico is also supporting the online petition that calls for delivery companies to reduce their commission fees.

We need to fight together to try and help the industry that is hospitality, he said. What we’re seeing is that operators are closing their doors day by day now. The delivery guys can help. We need them to come to the table. And I’m not saying forever but help the operators.

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