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Food delivery riders caught in the middle, as F&B outlets and delivery platforms tussle over commissions

SINGAPORE — As the Covid-19 crisis unfolded, Rey’s earnings as a GrabFood delivery rider have sunk by 25 per cent, but now he fears his meagre income may be squeezed even more.

Food delivery riders caught in the middle, as F&B outlets and delivery platforms tussle over commissions

Some delivery riders are concerned that their already-depleted incomes will be eroded further if food delivery firms agree to lower the commissions they charge food-and-beverage outlets.

SINGAPORE — As the Covid-19 crisis unfolded, Rey’s earnings as a GrabFood delivery rider have sunk by 25 per cent, but now he fears his meagre income may be squeezed even more.

The reason? The owners of struggling food-and-beverage (F&B) places are campaigning to pay lower commissions to platforms such as GrabFood.

And as those F&B commissions help put money in the 31-year-old’s pocket, he worries that he could soon be earning even less — even though riders like Rey provide a vital service delivering meals to many Singaporeans stuck at home during the circuit breaker period meant to slow the spread of Covid-19.

Rey, who did not want to reveal his last name, told TODAY that while he still delivers about the same number of orders a day, he earns about S$1 less per delivery, and claims that his weekly incentives — where riders get a bonus sum for a certain number of orders — have also fallen.

Where he used to earn a maximum of S$200 fulfilling 30 orders a day, he said he now earns S$150 at best during the circuit breaker period for the same number of orders.

While he is willing to “suck up” the drop in his income, any cut to rider incentives resulting from possible lower commissions paid by F&B firms will be a tougher blow to Rey, who supports his mother and sister.

These concerns stem from an online petition started on Wednesday (April 15) by an informal F&B group #savefnbsg — formed by more than 600 restaurants — seeking lower commissions.

The petitioners said food delivery providers GrabFood, Foodpanda and Deliveroo have stuck with high commissions of about 30 per cent during the circuit breaker period as restaurants “fight for survival”. Doing so “literally robs restaurants of every potential to earn their keep”, they added.

On Facebook, there have also been posts by merchants and consumers — some of which have garnered thousands of shares — urging the public to boycott these delivery applications. 

When TODAY asked the three companies for their response to the petition, none indicated that they had made a decision about whether to give in to the demands.

This did not reassure delivery riders interviewed by TODAY. Many said they had families to feed and could not bear to see their earnings drop further.

Mr Kevin Yan, a part-time delivery rider with GrabFood, understood why the restaurants want the food delivery platforms to take lower commissions.

But he said delivery riders were at a disadvantage because they were “the lowest in the food chain”. “We will be the ones being squeezed more at the end of the day,” said the 44-year-old.

Other riders argued that a “sudden influx of riders” meant that even if there were more delivery orders online, these orders would be spread more thinly among a larger pool of riders.

Another GrabFood delivery rider, who wanted to be known only as Ms Iqah, said that she was afraid that any slide in commissions would mean lower incentives for her.

“If the commission (rates for F&B merchants) stay the same, it would be better,” said the single mother of three.  

While the 29-year-old used to make S$80 a day before the circuit breaker measures kicked in, she now earns about S$50, with orders harder to come by.

“Now there are too many riders on PMD (personal mobility devices), bicycle, e-bike (electric bicycles), motorbike… (maybe) they lost their job, so many applied (to be a delivery rider),” she said.

While the calls for a boycott may result in the delivery platforms losing some customers and merchants, food delivery riders are divided on whether this would affect them.

Mr Ke Weiliang, who is a delivery walker with GrabFood after losing his income as an arts and cultural worker, said that an “overnight boycott” of delivery services may result in “thousands of deliverymen on the ground losing our income”.

The 27-year-old is urging merchants and consumers to “carefully consider the implications that a boycott would have on the livelihoods of deliverymen… and avoid reacting to this situation in a knee-jerk manner”.

But some delivery riders believe that a boycott would not put a dent on the already-overwhelming demand for delivery services.

“I can go to so many restaurants to look for food delivery orders,” said Ms Siti Khasy, a Deliveroo rider. She said food delivery platforms now feature more F&B outlets, as dining in is barred during the circuit breaker period.

“I hear so many weird restaurant names (I’ve never seen on the app previously), if one restaurant (decides to boycott), there are so many more to choose from,” said the 21-year-old.

WHAT FOOD DELIVERY COMPANIES SAY

The three food delivery firms told TODAY that they were working to help F&B merchants and their food delivery partners get through this “unprecedented time”.

A Grab spokesperson said: “On a platform where all four parties, including Grab, are interdependent, we want to be fair to all users. Any new changes to be introduced in favour of one party are not to be taken lightly as it will inevitably affect the other three parties in the ecosystem.” The four parties are the platform, the F&B outlet, the rider and the customer.

Grab said it has not increased its service fees or commissions during this period, and that most commissions are used to pay its delivery partners “on top and above the delivery fees they receive”, and to cover operating costs such as insurance.

“Grab does not ‘earn’ the full amount of commission received,” its spokesperson clarified. GrabFood also shared the breakdown of the commissions on its Facebook page on Friday.

Grab added that while food deliveries will not be able to offset all its merchants’ overheads including rent, it has been “working closely with them to come up with solutions to mitigate the situation”.

Initiatives include islandwide deliveries, which have helped merchants achieve 30 per cent growth in their orders, Grab said. It does not charge a commission on orders made on its app where customers pick up the food from the F&B outlet themselves.

Deliveroo said that the commissions it charges go “towards paying our riders fairly and keeping them safe on the roads, as well as covering the full spectrum of running a food delivery platform that delivers 24/7, from credit card fees to customer care to tech support and service improvements”.

It added that it is working with government agency Enterprise Singapore, which supports local businesses, to help restaurants transit from dine-in to delivery-only by waiving up to S$360 of its usual restaurant onboarding fee and providing free product photography to market their menus.

Deliveroo is also making payments to restaurants every week, rather than the usual two, to improve their cashflow.

When asked about the petition, Foodpanda said: “We appreciate feedback from our partners and customers, and recognise that it is important to reflect and continually examine the ways in which businesses are affected and what more could be done to support each other.”

Foodpanda said it has also partnered Enterprise Singapore to waive fees for merchants to join the app. For new sign-ups, it will not charge a commission for food delivery orders for a month.

It has also worked with hawker-food delivery platform WhyQ to offer discounts of up to 35 per cent on hawker food in support of local hawkers. The discount is borne by the two platforms.

Grab added on its website that “100 per cent of the delivery fee goes to our delivery partner”, with extra incentives that come from the merchant commission.

Foodpanda added that it has not received feedback relating to lost earnings from its food delivery partners.

Deliveroo said that it has added 180 restaurants and 1,000 new riders, but has done so “sensibly and sustainably, so it benefits us all in the long term”.

NOT ALL F&B OWNERS AGAINST FOOD DELIVERY PLATFORMS

The online petition for food delivery companies to lower commissions had garnered more than 3,300 signatures by 7.30pm on Friday.

But before the petition gathered steam, Mr Colin Chen, 36, had on Tuesday made a post on Facebook appearing to criticise food delivery platforms.

The post — on how a S$30 delivery order is split between the merchant and food delivery firm — was widely shared, with many commenters berating the delivery platforms for keeping commission rates constant and leaving merchants with a slim cut.

But Mr Chen, who owns The Refinery, a restaurant at King George's Ave, said that many had misunderstood his intention.

He told TODAY that he has “nothing against the system”, and wrote the post only to educate consumers on what they are paying for when ordering food, rather than to criticise delivery firms.

“If there’s something good to come out of this other than this whole negativity, it is that it opens up the market with a bit more transparency, and consumers will stand to gain and companies will try to be more understanding.”

He added that the food delivery companies hire thousands of people and have to sustain their business model.

“I do not think it is right for us to say: ‘Oh, you should waive your commission’... There is a perfect balance that has to be reached.”

Agreeing, 39-year-old Christie Tang, owner of Nom Bistro & Bakery at MacPherson Community Club, said that the delivery companies have been in the market for a while, and it is up to merchants to adjust to their business model to factor in all the costs — including the delivery process.

“Would delivery riders want to be delivering food for free? They have families. They do have to feed someone as well,” she said.

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food delivery delivery riders commission Covid-19

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