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SG consumer watchdog drops GrabFood and Deliveroo investigation

SG consumer watchdog drops GrabFood and Deliveroo investigation

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GrabFood and Deliveroo have started supplying their online food delivery services to F&B operators for food preparation from Smart City Kitchens, which already have access to foodpanda's online food delivery service. GrabFood and Deliveroo had initially refused to supply online food delivery services to F&B operators using Smart City Kitchens' virtual kitchens, resulting in the Competition and Consumer Commission of Singapore (CCCS) launching an investigation last September.

However, CCCS has decided to cease its investigation after noting that the conduct which involved the refusal to supply online food delivery services to competing virtual kitchens has ceased. With GrabFood and Deliveroo supplying their online food delivery services, CCCS said F&B operators using virtual kitchens now have the choice of using multiple online food delivery providers to expand their consumer reach. "There is greater competition in the virtual kitchen sector, and consumers are also able to enjoy a greater choice of food ordered online. With greater competition, businesses are incentivised to innovate to cater more efficiently to the evolving needs and preferences of their customers," CCCS said in a statement.

It also noted that competition in the virtual kitchen sector "remains dynamic", with players entering and competing for market share. Although the investigation has ceased, CCCS said it will continue to monitor market practices and take necessary enforcement actions against any anti-competitive conduct in these sectors.

Smart City Kitchens operates shared kitchens in Singapore and does not operate any online food delivery service. As such, it would need to rely on the main online food delivery service providers to fulfill deliveries for the F&B operations that operate out of its virtual kitchens. 

Virtual kitchens are integrated and optimised commercial kitchen spaces provided to F&B operators for food preparation, predominantly for online food delivery services. According to CCCS, virtual kitchens provide another channel for F&B operators to start small and gradually expand their business through online food deliveries, without the costs associated with running a dine-in restaurant. It added that virtual kitchens also allow consumers to enjoy a wider and better choice of food for delivery.

Separately, CCCS is seeking public feedback concerning Grab Singapore's recent application to impose a SG$0.30 (SG$0.32 with GST) platform fee on each ride. According to Grab, the SG$0.30 platform fee per ride will enable it to “maintain and enhance the various safety measures and cover the relevant operating costs”. A third of the funds collected through the platform fee will be committed towards providing benefits for driver welfare, the company said. Grab also told CCCS in its application that this is a practice that is in line with ride-hailing industry norm, citing Gojek which has implemented a SG$0.70 platform fee.

Related articles:
SG competition watchdog seeks feedback as Grab aims to impose SG$0.30 GST
Australian competition watchdog proposes possible Google and Facebook boycott by media
Indonesian competition watchdog not in favour of Gojek-Grab merger
Competition watchdog: Grab-Uber merger 'lessened competition' in ride-hailing

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