Food delivery services need tweaking to attract hawkers wary of paying commissions: Amy Khor

SINGAPORE — The model for food delivery services, including commission structures, must be tweaked in the longer term to be more attractive to hawkers, Dr Amy Khor said on Tuesday (May 5).

The Senior Minister of State for the Environment and Water Resources also told Parliament that 20 to 30 per cent of hawker-stall holders had chosen not to operate since the circuit breaker began on April 7.

Some of them, in the Central Business District, had done so as the office crowd thinned out. Older hawker-stall operators islandwide had also temporarily closed, she said.

Dr Khor was responding to questions from Tanjong Pagar Group Representation Constituency Member of Parliament Melvin Yong.

Food delivery services are a good way for hawkers to boost their income, especially during the circuit breaker. But some are unfamiliar with the options, may be resistant to adopting technology, or put off by the commissions charged, Dr Khor said.

The National Environment Agency (NEA) and trade agency Enterprise Singapore (ESG) had been encouraging hawkers to take up these food delivery services, including through a one-off S$500 payment to hawkers who adopt food delivery services.

To date, 600 applications have been received for this scheme, which will be extended till the end of June, Dr Khor said. 

She noted, however, that food delivery service business models must strike a balance among all parties, including the hawker, the delivery person and the platform operator.

She said the Government is engaging food delivery companies to adapt their model to fit the context of hawker centres and potentially lower costs for hawkers beyond the circuit breaker.

“We are heartened that ground-up initiatives such as Hawkers United and SG Dabao have emerged in recent weeks; these help hawkers to advertise their food for delivery or pick-up,” she said.

“There are also smaller operators with newer models that allow users to aggregate orders within a hawker centre and do not impose direct commissions on the hawker food.”

Last month, TODAY reported that owners of struggling food-and-beverage (F&B) places were campaigning against high commissions charged by delivery platforms.

An online petition was started by an informal group — formed by more than 600 restaurants — seeking lower commissions from food delivery providers GrabFood, Foodpanda and Deliveroo, which the group claimed have stuck with high commissions of about 30 per cent during the circuit breaker as restaurants fight for survival.

On top of the grants provided by the Government, such as three months of rental waivers and one month of subsidies to defray table-cleaning and centralised dishwashing costs, NEA and ESG have launched initiatives to support hawkers in adopting food delivery services, Dr Khor said.

One example is the Food Delivery Booster Package, introduced at the start of the circuit breaker so that F&B establishments and hawkers can enjoy 5 per cent off commission rates charged by the major food delivery platforms and 20 per cent lower delivery costs if they engage third-party logistics players.