The downside of the booming food delivery business: Commission overkill

The booming food delivery business amid the Covid-19 pandemic in Thailand has led to a revenue explosion of delivery platforms such as Foodpanda, Grab, Gojek, Lineman and Robinhood, but also triggered a wave of complaints by participating restaurants and cookeries about what they perceive as inadequately high commissions for both ordering and delivery.

A number of persons have approached Investvine in Thailand to report about being met with a rant from chefs against the delivery platforms when picking up food, mainly related to the latter’s high sale share. Many recommended contacting them directly by phone to circumvent the commissions.

Furthermore, the discount policy of the delivery platforms, intended to attract and retain customers, is also a thorn in the flesh of many restaurant owners, Investvine has learnt.

One Indian chef in Bangkok said that combined discounts for pick-up and the many vouchers that can be applied on food purchases is reducing sales prices for their food by more than 50 per cent, which was not sustainable and many orders had to be cancelled, leaving them somehow in a limbo as dining-in is also drastically limited amid the current Covid-19 measures in the country.

Struggling to pay staff

Another restaurant owner said that some food delivery platforms have increased their commission in the recent past among a surge in orders, leaving him struggling to pay his staff accordingly.

All this has led the Thai commerce ministry to step in and get a clear picture of the situation. Controls on delivery services during the pandemic have been tightened to prevent operators from profiteering.

Wattanasak Sur-iam, director-general of the ministry’s internal trade department, said the commerce ministry has been monitoring delivery fees during the third wave in Thailand as more people work from home and has approached them to impose more reasonable charges in the current situation.

Commissions capped at 25 per cent

As a result, the platforms agreed to reduce their charge on restaurants from the usual 25 to 35 per cent to 25 per cent throughout the month of June in Bangkok, while food prices will be cut elsewhere in the country.

The ministry will also facilitate a match between 110,000 eatery outlets registered in Thailand and loan providing banks, with the target that soft loans will not have a need for collateral for the restaurant owners.

The two schemes will result in a loss of up to 350 million baht ($11.2 million) for food delivery platforms, observers noted.



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The booming food delivery business amid the Covid-19 pandemic in Thailand has led to a revenue explosion of delivery platforms such as Foodpanda, Grab, Gojek, Lineman and Robinhood, but also triggered a wave of complaints by participating restaurants and cookeries about what they perceive as inadequately high commissions for both ordering and delivery. A number of persons have approached Investvine in Thailand to report about being met with a rant from chefs against the delivery platforms when picking up food, mainly related to the latter’s high sale share. Many recommended contacting them directly by phone to circumvent the commissions. Furthermore,...

The booming food delivery business amid the Covid-19 pandemic in Thailand has led to a revenue explosion of delivery platforms such as Foodpanda, Grab, Gojek, Lineman and Robinhood, but also triggered a wave of complaints by participating restaurants and cookeries about what they perceive as inadequately high commissions for both ordering and delivery.

A number of persons have approached Investvine in Thailand to report about being met with a rant from chefs against the delivery platforms when picking up food, mainly related to the latter’s high sale share. Many recommended contacting them directly by phone to circumvent the commissions.

Furthermore, the discount policy of the delivery platforms, intended to attract and retain customers, is also a thorn in the flesh of many restaurant owners, Investvine has learnt.

One Indian chef in Bangkok said that combined discounts for pick-up and the many vouchers that can be applied on food purchases is reducing sales prices for their food by more than 50 per cent, which was not sustainable and many orders had to be cancelled, leaving them somehow in a limbo as dining-in is also drastically limited amid the current Covid-19 measures in the country.

Struggling to pay staff

Another restaurant owner said that some food delivery platforms have increased their commission in the recent past among a surge in orders, leaving him struggling to pay his staff accordingly.

All this has led the Thai commerce ministry to step in and get a clear picture of the situation. Controls on delivery services during the pandemic have been tightened to prevent operators from profiteering.

Wattanasak Sur-iam, director-general of the ministry’s internal trade department, said the commerce ministry has been monitoring delivery fees during the third wave in Thailand as more people work from home and has approached them to impose more reasonable charges in the current situation.

Commissions capped at 25 per cent

As a result, the platforms agreed to reduce their charge on restaurants from the usual 25 to 35 per cent to 25 per cent throughout the month of June in Bangkok, while food prices will be cut elsewhere in the country.

The ministry will also facilitate a match between 110,000 eatery outlets registered in Thailand and loan providing banks, with the target that soft loans will not have a need for collateral for the restaurant owners.

The two schemes will result in a loss of up to 350 million baht ($11.2 million) for food delivery platforms, observers noted.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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