Nearly 1,700 new restaurants have signed up for Deliveroo in the last month, as coronavirus restrictions lead more businesses to shut their doors

Business Insider Australia

More restaurants are signing up to delivery services. (Photo by Matthew Horwood, Getty Images)

  • Nearly 1,700 restaurants have signed up to delivery platform Deliveroo in the last month.
  • It comes as restaurants were ordered to close to prevent the spread of the coronavirus – but can still do takeaway and deliveries.
  • However, organisations like the Chapel Street Precinct Association says delivery companies like Deliveroo and Uber Eats should reduce their commission fees to support restaurants.
  • Visit Business Insider Australia’s homepage for more stories.

After the federal government announced the closure of pubs, clubs and restaurants to prevent the spread of the coronavirus, affected owners have turned to delivery services to sustain their businesses.

Deliveroo has seen nearly 1,700 new restaurants sign up to the platform in the last month. In the last week, it experienced a 435% increase in the number of restaurants signing up compared to the two-week period before that.

These new signups include large restaurant chains, local family restaurants, fine dining restaurants and caterers, many of which who didn’t do delivery before. They include eateries like Chin Chin, Soul Origin, TGI Fridays and Supernormal.

Deliveroo Australia CEO Ed McManus said in a statement the company is helping restaurants digitise their business so they can adapt quickly to this new reality.

“The strong message that we want to send to the public is that the Australian restaurant sector is still open for business,” he said. “Please support your local restaurants – this is the time when we all need to come together as a community to support each other.”

Deliveroo has also announced measures it is taking to support businesses, such as moving to daily payments and focusing marketing activities on local restaurants.

Restaurant and Catering Association (RCA) CEO Wes Lambert said in a statement the new restrictions from the government has forced businesses to focus on takeaway and delivery to survive.

“Seeing the surge in new restaurants signing up to platforms such as Deliveroo is proof that our industry doesn’t want to close, but find new and innovative ways to reach their customers to continue to provide the food they love,” he said.

“It is vital that the Australian dining public understand the restaurant industry isn’t shut and they need patronage now more than ever before. All their favourite locals are still cooking their favourite meals, all they have to do is open their phone and put in an order.”

Menulog is also reaching out to restaurants

Earlier this week, fellow delivery service Menulog told Business Insider Australia it has received a “high volume” of requests from restaurants, cafes, grocery and convenience stores to join its platform.

Now the company is working with local restaurants to redeploy workers as drivers to keep them in a job.

Through the company’s ‘self-delivery’ marketplace, restaurants, cafes and other hospitality businesses to redeploy their employees as drivers and use Menulog at a “significantly lower rate”.

Menulog Managing Director Morten Belling said in a statement, “Menulog was founded over 14 years ago on the premise of helping restaurants with their own delivery drivers to grow their customer base – and we are encouraging more restaurants to do so now.

“Our national delivery logistics service covers 87% of the addressable population and is available for those restaurants without drivers. If restaurants decide to redeploy their staff as drivers we can support these businesses with our self-delivery marketplace which offers Menulog’s online ordering and delivery integration technology.”

Menulog also rolled out initiatives to support restaurants such as halving commission fees on pickup orders and providing $3 million for marketing activities to promote restaurants.

Uber Eats has also announced steps it is taking to assist restaurants. The delivery service announced $5 million in funding to help restaurants in Australia and New Zealand attract more customers. It gave restaurants the option of receiving daily payments instead of weekly payments during the coronavirus pandemic, and they won’t have to pay a service fee on pickup orders until June 30.

Uver Eats is waiving activation fees for new restaurants which sign up.

Some people, however, are calling for delivery services to do better by restaurants

Melbourne food writer Dani Valent started an online petition which called for Uber Eats and Deliveroo to reduce the up to 30% commission fees they charge restaurants.

Affected businesses in Melbourne’s Chapel Street Precinct believe Uber Eats isn’t doing enough to support restaurants. It wants the company and other delivery platforms to “immediately slash their commission by at least 50%”.

“The company released a statement this morning, giving empty ‘pledges’ to help alleviate the immense financial stress haunting our Chapel Precinct restaurant and cafe owners,” Chapel Street Precinct Association (CSPA) General Manager, Chrissie Maus said in a statement.

“These appear to be well-intentioned offers dressed up as corporate social responsibility, but they benefit only Uber themselves. They (delivery giants) don’t understand we are haemorrhaging.”

Katherine Sampson, owner of Hello Sam Burger Bar in South Yarra, also called for more help from delivery services.

“With 80% of our sales now on UberEats and customer numbers down, our profits have diminished significantly,” she said.

“It seems Uber does not believe in the merit of true corporate social responsibility in protecting our restaurant owners and has seen this as an opportunity to make huge profits. If this doesn’t change, it won’t be worth us trading through as we will start losing money by being open. The only reason we are trading is to keep our staff in jobs.”

CSPA highlighted its response to Uber Eats’ measures to assist restaurants during the coronavirus pandemic, saying the company’s $5 million funding is “hardly beneficial if everyone is fighting for the same business”.

“This doesn’t cost UberEats a cent, but it does increase consumer spending on its platform,” the CSPA said.

The organisation added that Uber Eats’ payments should be done on a daily basis regardless of whether there is a pandemic, so restaurants can pay rent, wages and food costs.

When it came to Uber Eats waiving sign on fees for new restaurants, CSPA called it a “red herring”.

“The real money to be made is not in sign on fees, but the up to 35% commission UberEats strips from the restaurant’s bottom line on each order,” the organisation said. “Often this is larger than the profit the restaurant is making off each dish sold.”

Again, the CSPA described Uber Eats’ no service fees for restaurants on pickup orders a red herring as Prime Minister Scott Morrison told Australians not to leave the house unless it is absolutely necessary.

“People use Uber to get food delivered, not pick up,” the organisation said. “And often restaurants have to jack up their prices to accommodate UberEats’ exorbitant 35% commissions.

“You’d get a cheaper meal if you called the restaurant direct and ordered over the telephone, you have one less person handling your food, your food is fresher and hotter and you are helping a local business stay afloat and keep someone in a job.”

The CSPA added that the company’s “redeeming pledge” was its mission to deliver 25,000 free meals to frontline workers in Australia, but it would be “hardly felt” as there are more than 530,000 healthcare workers in the country.

Source: Business Insider Australia