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Petition called for delivery apps to lower commission rates for beleaguered F&B industry

Petition called for delivery apps to lower commission rates for beleaguered F&B industry

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The Restaurant Association of Singapore (RAS) has called for food delivery players to lower commission rates during the COVID-19 period and also in the future. According to a statement shared with Marketing, the RAS said these commission fees are between 25 to 32% for each order and described it very high given F&B's "razor-thin" margins. RAS was of the view that the food delivery companies are hampering the sustainability of F&B businesses who are largely impacted due to COVID-19. 

RAS told Marketing that it hopes that the delivery platforms will lower their commission rates, during the COVID-19 period and also in the longer run. Feedback from the market is that commission rates in the 12 -15% range would be more viable for F&B companies, it added. 

Whether it is the circuit breaker period or not, the rates are not sustainable for the businesses, given F&B's razor-thin margins.

Meanwhile RAS also said it encourages the industry to take advantage of the government's recent Food Delivery Booster Package to help F&B businesses. The package includes collaboration with three key food delivery platforms, Deliveroo, foodpanda and GrabFood. From 7 April to 4 May 2020, the Food Delivery Booster Package offers relief by funding five percentage points of the commission cost charged by the three food delivery platforms and there is no cap on the qualifying food delivery transaction value. 

Meanwhile in a statement to CNA Grab, foodpanda and Deliveroo did not comment on lowering commission rates for the long run.  Instead a Grab spokesperson said it was waiving commission fees for self pick-up orders and has also included a 'Loral Heroes' icon single outlet F&B places to get awareness.

Deliveroo then said that it will waive up to SG$360 of onboarding fees, and has introduced a weekly payment service that allows restaurants to gain quick access to the delivery revenue. Marketing has reached out to Grab and Deliveroo for comment. 

In a statement to Marketing, a foodpanda spokesperson said through its recent partnership with Enterprise Singapore, it is offering 0% commissions and has waived the on-boarding fee for new F&B partners joining under the Enterprise Singapore initiative. The food delivery company has also sped up the process for new suppliers and restaurants joining the platform, increased frequency of payouts to improve cash flow for partners among others.  

Currently, there is an online petition asking for food delivery companies to lower the commission rates. At the time of writing, about 3,000 have signed the petition and is looking to reach 5,000. 

Last month, Deputy Prime Minister Heng Swee Keat said the F&B firms will get a 50% wage offset for local employees, up from the initial 8% stated in February's Budget. The minister also noted that the sector has been "significantly affected" by the pandemic and as such the government was looking at “bolder and more aggressive moves” to ensure jobs can be saved.

While we ride this wave together, stay productive and join us for our newly launched webinar series covering a wide range of topics on business resilience.

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