Not long after we wrote about Singaporeans scrutinizing food delivery business profits during the COVID-19 crisis, local restaurants issued a call for lower commission rates from the three major food delivery companies.
Under the name Savefnbsg, hundreds of restaurant owners published an open letter yesterday calling on the government to “mandate that delivery platforms lower their commission by at least 15%.” It also publicized an online directory of restaurants that offer direct ordering.
“Nobody has ever liked the rates imposed on us but we tolerated them because in the not-so-distant past, the money from your sales didn’t form a core pillar of our revenue streams. We watched in frustration as your commission increased steadily from 20% to 30%,” the letter read. “You call yourselves our ‘partners’ but we truly wonder if you know what that means.”
Savefnbsg says more than 500 restaurants have joined its coalition.
Restaurants that largely depended on dine-in services for revenues have had to switch to delivery due to the shutdown of most businesses to slow the spread of COVID-19, which has infected 3,699 people as of this morning. The coalition argued that the high commissions paid to food delivery companies, usually around 30%, are worsening the situation.
There was no immediate response from Enterprise Singapore. The government has taken recent action on the matter – by awarding a subsidy to the delivery services to lower their commissions. An email circulated from GrabFood indicates it has done so, but only by up to 5%.
More than a thousand people so far have signed an online petition calling for food delivery commissions to be lowered.
“In a climate such as this, delivery partners should be working together with restaurants to streamline delivery, smoothen logistics, increase infrastructural support instead of profiting against the backdrop of our nation’s circuit breaker,” the Change.org petition reads.
Several F&B operators including Burger Labo and the owner of Blue Lotus restaurants have been reposting since yesterday an infographic illustrating how the commissions charged by Foodpanda, Deliveroo, and GrabFood are unsustainable.
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When reached for comment yesterday by Coconuts Singapore, none of the three food delivery companies addressed their commission rates.
Foodpanda’s website says that high commissions rates are required to “improve our services, technology, and operations for vendors and customers alike.” Last month, it said that business was up as much as 20-fold in some markets where it operates compared to the same period last year.
Commission rates are based on factors including the quantity and location of outlets, types of cuisine, average numbers of items sold at a time, the site indicates.
Deliveroo said earlier this month it was paying its restaurant partners weekly rather than at the end of the month to help them with cash-flow issues during the economic crisis. In a recent update to its Australian partners, the company said it could not provide commission relief as the outbreak has been “challenging for all businesses and we’re providing assistance where we can.”
Thinking of ordering directly from local food establishments? Others have also put together information on where and how to do so.