Uber Eats may have reduced some fees it charges struggling local restaurants but is this concession to Australia’s hospitality sector too little, too late?
Uber Eats, Deliveroo and Menulog continued to maintain their delivery charges after social distancing rules forced restaurants and cafes to shut their doors to dine-in customers in March.
The Franchise Council of Australia criticised the delivery firms whose businesses were booming as the restaurant sector struggled to stay alive.
Last month, FCA CEO Mary Aldred singled out Uber Eats, which has an 80 per cent market share.
“Of all the delivery networks, UberEats in particular will be experiencing a huge lift in volumes should share in some of the sacrifices being made by the food retail and hospitality groups.”
Now, according to a company blog post, Uber Eats is to permanently reduce its commission by five percentage points to 30 per cent.
From 18 May restaurants have been able to use their own staff to deliver Uber Eats orders received via the app and the delivery platform will temporarily waive its commission for customer self pick up orders until July before reverting to the usual 13 per cent.
However, the news comes as many still-trading hospitality businesses have taken matters into their own hands and developed their own delivery systems.
Restaurants launch own delivery systems
Sweet treat chain San Churro has adopted a new initiative from local hospitality tech company Redcat which provides a simple way to introduce deliveries.
“Redcat has given our restaurants the opportunity to rapidly get online to deliver to our loyal customers. The challenges of bringing this to market quickly have been dealt with professionally and the technology works seamlessly,” said Mark Attard, San Churro CMO.
Redcat’s low-cost platform Stellar provides three key solutions: third-party delivery, online ordering, and ordering food through Google Search and Google Maps.
Stellar charges customers a flat delivery fee, and a minimal online ordering fee (3% + credit card processing excluding GST) and the platform can be set up in less than 48 hours using a browser.
“While the hospitality industry is hurting, home delivery demand is skyrocketing. We want to help by offering a customer-branded alternative – now you can deliver in your own name” said Jeff Lamb, Redcat CEO.
“This is a game-changer for the industry, allowing businesses that otherwise could not afford to, or didn’t have the technology to meet customer demand..”
Stellar creates the business’ menu online. When a customer searches for a venue or cuisine on Google Search and Maps, they’ll see “Order Takeaway” and “Order Delivery” buttons for participating restaurants, enabling them to place their order directly through Google.
Stellar will then organise third-party delivery services through the Redcat Delivery Engine, or businesses can choose to use their own drivers.
Online orders rise by 250%
Another entrepreneur Ankur Sehgal, the owner of a chain of 11 Asian fusion restaurants, P’Nut Noodles, is poised to franchise the brand and is launching a home delivery service.
Speaking to Inside Franchise Business Sehgal said the chain was already using aggregators Menulog and Uber Eats and recently started working with DoorDash.
However, COVID-19 was the catalyst for bringing the delivery service in-house.
Sehgal saw the opportunity to use existing staff to undertake deliveries and set in motion an ordering app which will launch at the end of the month.
“To assist staff we kept some restaurants open. Luckily for us, sales started to go up and our delivery is a big percentage.”
Sehgal saw online ordering rise almost 250 percent.
“From a margin perspective, it’s almost the same costs [as an aggregator] about 22-25 per cent unless you have huge volume. But it gives you control. You need to have multi-channels.”
However Sehgal hasn’t dismissed the aggregators just yet. “I think the market will become quite interesting You have to find a way of working with them.”
7-Eleven joins delivery ranks
Convenience giant 7-Eleven is an example of a non-hospitality business spotting the opportunity to move into delivery on its own terms.
Last month the mega franchise dipped its toes into delivery of essential items while stay home restrictions were at their peak.
The initiative harnesses the capabilities of the 7-Eleven Group’s 2018 acquisition, Tipple.
CEO Angus McKay said it took about two weeks to develop and implement the new essential goods delivery service.
“We are rolling this out in Melbourne for most suburbs and will look at other states in the coming months,” he said.
