Restaurants likely to develop and use their own delivery services due to high commission fees
PICTURE: UNSPLASH
Restaurants likely to develop and use their own delivery services due to high commission fees PICTURE: UNSPLASH

Restaurants likely to develop and use their own delivery services due to high commission fees

By Buhle Mbonambi and Lutho Pasiya Time of article published May 1, 2020

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Restaurants are balking at the 30% commission by food delivery services. It is simply too pricey for some restaurants and this has led to the industry now looking for cheaper options or planning to do their own delivery.

While this is good news for many restaurateurs who are looking to resume their business, even though they can only open for deliveries, they now have another issue- the high commission by third party delivery companies, like UberEats. 

Restaurant pick-ups will only become available at level 2, and in-store dining will only be permitted at level 1.

Restaurateurs have cried foul at the steep commission price by delivery services and are now looking for other options. 

Wendy Alberts, CEO of the Restaurant Association of South Africa (RASA), says that while it may be stressful for restaurants, it is an opportunity for innovation in the industry.

 “The evolution of our industry has been exponential and restaurants are looking to supplement (they own delivery service) as a solution to the problem,” Alberts says.

“One of the good things that has happened is our restaurants are looking at bringing their delivery services in house. There has indeed been a movement in the sector for other operators to come in and help the industry.” 

Restaurants likely to develop and use their own delivery services due to high commission fees PICTURE: Unsplash

Bolt Food will be charging restaurants 15% commission, which is half of what UberEats will be charging restaurants for deliveries. In a presentation shared on social media, Bolt Food will be charging restaurants the commission for Level 4 and Level 3. “Thereafter a reasonable commission rate will be negotiated.” 

Responding to the backlash, MrD Food CEO, Devin Sinclair, said they will be now introducing a commission relief scheme. 

“We will also be implementing initiatives to support the restaurant industry as they reopen. As a first step, we are introducing a commission relief scheme which reduces the commission rates for the vast majority of our restaurant partners. We have also allocated marketing funds to drive promotional initiatives to generate orders and revenue for neighborhood restaurants," Sinclair says in a statement released by the company.

“Lastly, we will be launching a new feature in the Mr D Food app that will allow customers to support their favourite restaurants, by making a COVID-19 contribution directly to the restaurant when placing a delivery order. We believe that by working together with the industry we can help give restaurants a chance to begin to recover from the financial effects of the lockdown." 

Many restaurants are still to confirm if they are reopening during Level 4 and what service they will use to deliver orders. With May 1 being a public holiday, some are using the weekend to make sure the restaurant and kitchens are hygienic before they resume services on Monday. 

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