High Delivery App Fees In Covid-19 Like Watching "World Burn", Says Summer Hill Chef

The Grab rep’s response to chef Anthony’s query on possible subsidies for delivery app commissions during the Covid-19 downturn.

Photo: Anthony Yeoh /Facebook

About a third of your total bill goes to the delivery platforms. “To put it into perspective, could or would any other industry allow another company to take 30% to 35% commission of their revenue just for transporting their product?” writes Anthony in his FB post. “Imagine if shipping companies suddenly told factories they were going to take a commission like that off their sales.” Since his post, a group of restaurateurs who banded together to start the #savefnbsg movement (which chef Anthony is a part of) have also come up with a pizza pie chart that allows any math idiot to understand where their money goes. The chart has gone viral. “Now, 100% of our business comes from deliveries or takeaways. The chunk that the food platforms get is even bigger,” says Anthony. “It's not sustainable for us and leaves zero room/budget for mistakes.”

Some might argue that the delivery platforms offer not just delivery, but serve as an online marketplace of sorts, and also give restaurants online presence. It is thus fair that they take that commission, no? But Anthony feels that the larger point is this: in a crisis, the delivery platforms are the most ready and able to help restaurants survive. “Yet they've been silent and unmoved,” he says to 8 DAYS. “There are small independent [restaurant] owners, new owners, people who are in a panic and have absolutely no idea how to deal with the magnitude of the situation. You can't just watch the world burn at a time like this.”

While Anthony acknowledges that it is a free market – and that, without those platforms, it will be less convenient for diners to seek out establishments that deliver to their location – his beef is with the delivery platforms’ stance in this crisis. “This is about having a sense of humanity to guide you in a crisis. I hope one of the platforms steps up to engage, listen and work together with us for a sustainable, long-term solution,” he says.

“If they (the delivery platforms) won't support the industry, then it will move on, because other businesses will fulfil that need in better and more efficient ways,” opines Anthony. But first, the restaurants will have to survive this rough patch where almost every restaurant is reporting a steep decline in business. Summer Hill – which is located in the Sunset Way vicinity – has started using couriers or hiring drivers directly for orders within their neighbourhood: “We handle orders ourselves via Whatsapp to Summer Hill's phone number, and we've engaged drivers or third party couriers such as LalaMove to make the deliveries,” says Anthony, who also urges other restaurateurs to do the same. “There’s a new Enterprise Singapore grant providing support for this too,” he writes. “More importantly, there are plenty out there who need the work (by being delivery men). It’s an opportunity to support others who’ve been affected. And provide work, a little dignity and hope at this time.”

Photo: Summer Hill /Instagram

Many other restaurateurs have also started engaging delivery companies to move their orders. When Lolla, a small-plates restaurant situated on Ann Siang Hill, started offering a takeaway/delivery menu on 3 April, they got their orders dispatched by Lalamove. “We skipped the online food ordering platform option, so we can deliver more value to the customer,” says co-owner Thaddeus Yeo. “It's more work for us – cos taking phone orders (rather than having it collated over the delivery apps) is not easy! But it means we don't have to up our prices (note: if you haven’t realised by now, prices for the same food item is always higher via delivery platforms than at the restaurant), and the delivery people – whom many I think are private hire drivers (who're not getting much business now) – are still getting paid, making it a win-win.”

Photo: Lolla /Instagram

Konstantino Blokbergen, the chef-proprietor of bakehouse and restaurant Firebake, is in a unique position: his restaurant is on Grab and Deliveroo for customers near his Katong location, but also offers its own island-wide delivery services. “Previously, delivery was a supplementary source of income, contributing to less than 5% of our restaurant revenue. So, being on existing delivery platforms Deliveroo and GrabFood was a convenient way to tap into this market,” shares Konstantino. “With Covid-19, our main dine-in revenue had suddenly vanished. We had to quickly assess and test other options, including establishing our own direct delivery avenue. These efforts are still new to us, so we chose to stay on to Deliveroo and GrabFood in the meantime to support our business.”

Photo: John Heng

The restaurateurs (spearheaded by Loh Lik Peng of the Unlisted Collection and Beppe de Vito of the ilLido Group) behind #savefnbsg – a coalition of over 600 restaurants who have come together to in a bid to survive the COVID-19 crisis – have also written an open letter to delivery platforms. “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 writes. “You call yourselves our ‘partners’ but we truly wonder if you know what that means.”

Photo: #savefnbsg

Restaurateurs aren’t the only ones with grouses either. In the midst of tightening social-distancing measures, GrabFood introduced a “minimum basket value” of $8 for its deliveries on 13 March, and a platform fee of $0.20 for every GrabFood order was implemented on 27 March. Some users have also observed that the “service fees” for their Grab Food deliveries have increased since the Circuit Breaker commenced. An order that used to incur a service fee of $3 off peak and $4-5 during peak hours now comes up to more than $7. Cos… all hours are peak hours during lockdown? In New York, GrubHub, DoorDash, Postmates and Uber Eats were sued on 13 April by three consumers who said the platforms violated U.S. antitrust law by requiring that restaurants charge delivery customers and dine-in customers the same price, while imposing “exorbitant” fees of 10% to 40% of revenue to process delivery orders.

In their open letter, the restaurateurs behind #savefnbsg also appeal to the government for intervention, citing the emergency order San Francisco has issued for all food delivery apps to cap its fees to restaurants at 15%. In New York, law makers also introduced a legislation to limit food app commission fees to 10 percent per order. “If the Singapore government can do likewise and mandate that delivery platforms lower their commission by at least 15%, it will play a huge part in our survival,” says the open letter.

Since the Circuit Breaker, almost all F&B operations – from hawkers and ice cream uncles on tricycles to hipster cafes and Michelin-starred establishments – are in a mad scramble to stay afloat. (The only ones who are unscathed are those set up solely for delivery orders). “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,” writes Anthony. “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 [restaurants] in the coming months as the walls close in on many businesses.”

Photo: Anthony Yeoh /Instagram