Food and beverage (F&B) business owner beseeched fellow operators to do a pickup or hire drivers instead of relying on the food delivery platforms such as GrabFood, foodpanda, and Deliveroo due to the high commission rates.
Mr Anthony Yeoh, who is the owner of Summer Hill bistro, posted on Facebook earlier today (15 April) that he decided to turn off the GrabFood terminal for his bistro food delivery and started to use couriers instead.
He also uploaded a screenshot of his email conversations with the GrabFood in his Facebook post. In the email, he asked GrabFood if the commission rate will be revised due to the current situation in Singapore, in which GrabFood replied “Nope, but there will be 5% rebate by the Government and 0% for self-pickup.”
“To put it into perspective, could or would any other industry allow another company to take 30%-35% commission of their revenue just for transporting their product? Imagine if shipping companies suddenly told factories they were going to take a commission like that off their sales,” said Mr Yeoh.
Noting that the restaurants have to pay the cost for the delivery deals and discounts, he indicated restaurants are currently “bleeding into the ground”.
“Maybe it works for some businesses with the scale or margins or a certain magic model that can survive these killer commissions? I know it kills most of the small independent ones I’ve talked to,” he added.
On that note, Mr Yeoh called local F&B business owners to do a pickup or deliver the food directly to the customers instead of relying heavily on the food delivery platforms.
“Diners, wanna support your local F&B restaurants? Do a pickup. (Call ahead to help prevent crowds and keep everyone safe) or have them deliver directly, as many of us have now started to do. It is going to be harder to seek them out without the convenience of an app. But the reality is you’re going to see a lot less of them in the coming months as the walls close in on many businesses,” he suggested.
Mr Yeoh noted that other restauranteurs, as well as his own Summer Hill bistro, have started using couriers or hire drivers directly to fulfill orders in the neighborhood.
“There’s a new ESG grant providing support for this too. More importantly, there are plenty out there who need the work. It’s an opportunity to support others who’ve been affected. And provide work, a little dignity and hope at this time,” he remarked.
However, he hopes that the three food delivery platforms–GrabFood, Deliveroo, and foodpanda–will evolve as partners who will support the restaurant community as important stakeholders in their business.
Earlier on 4 April, Enterprise Singapore (ESG) rolled out a Food Delivery Booster Package to support F&B businesses to meet the needs of digitally-connected consumers amid the imposition of the “circuit breaker” measures in Singapore.
The package helps to reduce the business costs of selling on three key food delivery platforms–Deliveroo, foodpanda and GrabFood–by funding five percentage points of the commission cost charged by the above three delivery platforms from 7 April to 4 May 2020.
As such, if the commission rate is 25 per cent of the total food delivery transaction value, the cost will be lowered to 20 per cent.
In terms of the three food delivery platforms’ commission rates, The Business Times reported that the platforms charge a commission in the range of 20 to 40 per cent for regular deliveries, and between 10 to 20 per cent for self pick-up orders.
ESG expanded support for F&B businesses leveraging third-party logistics partners for deliveries
Meanwhile, F&B businesses who are not using the three major delivery platforms – Deliveroo, Foodpanda, and GrabFood – but are fulfilling food delivery orders through third-party logistics partners will be funded 20% for the delivery cost, ESG announced on 9 April.
“This will be valid for orders made between 7 April to 4 May 2020. Funding will be disbursed through eligible third-party logistics partners, such as Lalamove and Zeek,” ESG noted.
To be eligible for the delivery funding, ESG stated that F&B businesses must have a food shop or food stall license issued by the Singapore Food Agency (SFA), and sell food that is prepared on the premise for immediate consumption.
Logistics players who are keen to be part of the effort can apply at [email protected] which opens until 15 April 2020.