As people in ‘essential services’ these people have to go to work so that we can stay at home. However, the situation doesn’t seem as rosy for some.
At a time when everyone is supposed to dine at home, deliveries and takeaways are usually the only option for those who don’t cook. However, while companies like Deliveroo, Foodpanda, and GrabFood make it easy for us to order and get our food delivered to our doorstep, a number of articles out there have highlighted the plight of many F&B outlets who are struggling to earn a living because of the high commissions these delivery companies charge the restaurants.
What restaurants are paying
Representing over 500 restaurants in Singapore, Wearefnbsg.com, posted an open letter to the delivery platforms with the message: “We watched in frustration as your commission increased steadily from 20 percent to 30 percent.”
To illustrate why 20-30% is too much for some:
To mitigate the situation, most restaurants, and some hawkers, have started to engage private drivers or deliver the food themselves. Of course, the delivery (usually from $3) cost will be borne by the consumers and the amount paid for the food goes straight to the F&B owners. While this has been a good initiative, the delivery charges for some operators – up to $25 in some cases – have drawn flak from consumers.
These restaurants aren’t the only ones feeling the pinch: hawkers aren’t traditionally on these delivery platforms in the first place. Since dine-ins have been forbidden, and they don’t have any means of getting the world out – most hawkers are not digitally savvy – they’re losing out on the delivery market.
If you want to help, you can order directly from these F&B providers.
From the delivery platform
Delivery platforms aren’t the problem – they’re also running a business. Removing these players from the equation isn’t an option especially at a time like this. They sustain the livelihood of numerous personnel, from delivery drivers to support staff, and bring much-needed exposure to various F&B businesses too.
An article from Vulcan Post revealed what Grab charges to restaurants and where the money goes to. Apparently most of it goes to the riders.
Merchant commissions range between 25% and 30%, and an average order in Singapore is around $18. This breaks down to:
- Total order: $18.00
- Delivery fee: $3.40
- Platform fee: $0.20
- Total paid by a consumer: $21.60
This means that for a $21.60 order, Grab only takes $1, and the riders take home an average of $8 ($4.60+$3.40) per order. This $1 needs to go towards not just their support staff, but also their tech and marketing.
What about the delivery people?
Amid a surge of demands however, an article from Straits Times reveals that food deliverers aren’t seeing returns. For 47 out of 58 riders told The New Paper that they are earning less now than before.
The reason? These riders are facing more competition with the influx of new riders during the coronavirus outbreak. As a result, some riders are seeing a reduction of up to 80% of their usual intake.
Their competition seems to come from more people made redundant during this period, as well as those in the private-hire industry coming on board. Both foodpanda and Deliveroo saw a huge rise in rider applications since March 16 compared with a normal week.
However, it seems that not all delivery riders are having it bad. According to Deliveroo, its top-earning rider for the month of March 2020 earned a whopping S$7,095 – he used to earn an average of S$4,200 per month by clocking around 400 to 500 trips.
While there is no good solution to everyone’s woes, we can support each entity by spreading the love: juggle your orders between delivery platforms and directly from outlets.