Are we hurting our restaurants?
A few weeks ago, an Instagram post stopped me in my tracks.
The post showed the cost breakdown of a Deliveroo order from a restaurant called Miss Kuku, in Melbourne.
It was big order. $220 worth.
But from that $220 order, the restaurant pocketed just $103.
Less than half!
Once you take into account the Deliveroo fee (in this case, 33%), and then subtract the 20% discount the restaurant was offering to help attract customers, they were left with just 47% of the original price.
You can read more about it from Paul Kasteel, owner of Hoo Haa bar and Miss Kuku restaurant.
This totally blew my mind.
How was this allowed to happen!?
And then it hit me; I might actually be a little bit to blame.
I thought back to all those times I’d opened the fridge door, looked at the sad, single bag of carrots staring up at me, took a deep breath in and said proudly to my cat, “Tonight I #supportlocal!”
And so I’d heroically reach for my phone, and tap the app; the bringer of delicious treats.
We’ve all done it.
Uber Eats, Deliveroo, Door Dash, Menulog. They’re just a thump tap away. So easy!
And we’re ‘supporting local’. So, you know, I really shouldn’t be cooking at home…ever. Right?
Turns out I might be wrong (not the ‘not cooking again’ bit - thank goodness - but the way we’ve gone about avoiding the stove. )
While we may have the best of intentions, it turns out we might actually be doing more harm than good.
So I did some digging to find out more.
Source: Restaurant & Catering Industry Association of Australia
Back in 2019, the SMH Business section reported this.
The article, which includes a study of 656 respondents shows that only 2% of restaurants are actually making revenue AND profit from the Uber Eats platform.
While a huge 53.9% reported an increase in revenue but a decrease in profit.
If the last 8 weeks or so of isolation have shown me anything, it’s just how precarious it is for local businesses.
And if you have skimmed the news in the last few weeks, you’ll see the tide is slowwwwlyyyy turning in the wave of public outrage and lobbying.
(Back in March 2GB radio host Ben Fordman started a petition that is still growing by the day, urging delivery services to cut their commission during the pandamic).
So Uber Eats agreed to cut their commission from 35% to 30% (still a hefty fee).
Deliveroo has temporarily waived their fee on pick up services (where you use their app to order and pick it up yourself), and have also reduced their fee for the restaurant to use their own drivers, to 5%. Until June 5th.
But once everything starts getting back to normal we’ll no doubt fees also ‘going back to normal.’
What can we do to help?
It’s as easy as exercising our thumbs and opening our wallets.
In under a minute you can genuinely #supportlocal by finding out how you can support your local restaurant.
Give them a call, scroll their Instagram, check their website.
Maybe you can pick up your order?
Go for a walk. Stretch your legs.
Maybe they have their own delivery service?
Tap into that.
Book a table to dine in.
You can also use The Sauce.
The Sauce - a super easy directory showing who in your local area (Eastern Suburbs currently) is offering:
pick up
direct delivery (ie their own delivery service)
dine in
Of course if our restaurants are still using delivery partners like Uber Eats, we’ve got that covered too.
We want to help in any way we can.
We’re all about supporting local community.
Nearly 500 restaurants, cafes, pubs and bars listed… and growing daily.
The app is free, and available from the Apple store, or for Android click here.
Necessity is the mother of invention.
While this time has certainly been difficult for any restaurant owner, there have been a few positives born out of this madness.
Many restaurants have made significant changes which could mean lasting positive outcomes:
Strengthening (in some cases creating) their online presence
‘Getting their house in order’ with pick up and their own delivery services
Creating new delivery alternatives that serve the local community (see below)
So coming out of this weird glitch situation of the 20th Century, they are empowered.
“The majors’ fees were crippling, which I simply couldn’t justify. That’s when i decided to pivot and form Love Local, a localised delivery platform.” Hamilton Kings, Honka Bar + Eats
As the hospitality scene starts to turn back to what they, and we do best (putting on fancy clothes, sitting INSIDE a restaurant, eating food we didn’t cook ourselves), let’s carry this knowledge through into our ‘new normal’.
Delivery businesses doing cool things
There’s a new wave of innovative businesses popping up during COVID times.
Kloopr. Based in Melbourne. Offering easy, yummy & value-for-money deals, Kloopr let you see the orders requested in your area so you can potentially pick up the request too. Charging low commission fees, and also giving back a portion of every order to Foodbank.
Love Local. A localised delivery platform designed to deliver meals from local favourites to their customers. Founded by Sydney restaurateur Hamilton Kings. Needing to deliver meals for his restaurant Honkas Bar + Eats during lock down, he was unable to justify the pricing of delivery services in operation. Potts Point, Darlinghurst, Surry Hills in Sydney, and expanding.
We’d love to hear your thoughts!
Email Lou hello@the-sauce.com.au