Brisbane restaurants to cut UberEats, Menulog delivery due to high fees

A Brisbane restaurateur is warning eateries will close if customers don’t start doing one simple thing to support them.

The National Retailers Association has called on Uber Eats to drop its fees from 35 per cent to 25 per cent.

A BRISBANE restaurateur will launch a new delivery service and switch off apps like Uber Eats and Menulog as the fee charges cut deep into his businesses’ bottom line.

Phil Calcutt is a director of Bluegrass Barbecue, which runs Hudson’s Corner in Albion, The Smoke Barbecue in New Farm and Bluegrass Barbecue in Eaton’s Hill.

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Mr Calcutt is asking customers to order direct from his eateries, so that he does not lose up to 35 per cent of every order to delivery apps.

He said Bluegrass Barbecue had used delivery apps, like Uber Eats, Menulog and Deliveroo, for years but were preparing to disable them due to unsustainable fees in unprecedented times.

He said the company was working on launching an in-house delivery process, including a mini-app, to keep his staff employed and the fees in the businesses’ coffers.

“Now, they can order exactly the same menu and I’ll deliver it,” he said.

There are about 50 staff employed across the three eateries, and he said most were working very close to their regular shifts, with only one person let go.

He said when sales through the apps were on top of his break-even point, the platforms were a helpful service and worked well, but the pandemic had changed that.

As coronavirus forced dine-in bans, the number of sales via the platforms has climbed from 22 per cent to 38 per cent and he expected it to make up more than half in the coming weeks.

“If that continues it would almost make more sense to close my doors, because I’d lose less money,” he said.

“There’ll be more restaurants closing permanently or going into hibernation if the delivery apps continue on this path and I’d see it happening in the next two or four weeks maximum.”

Mr Calcutt said the businesses were making good sales but were paying about $6000 in delivery commissions every week, and his attempts to negotiate the fees down were refused.

Hi guys. We’d like to ask your advice. As you might know we’ve been delivering to you via Apps like UberEats and...

Posted by Hudson Corner on Saturday, 11 April 2020

Mr Calcutt said if a customer orders direct from his business for pick-up or delivery, it makes 90 cents out of a dollar but on orders via a delivery apss they can make as little as 55 cents.

“People are just unaware, they’re thinking ‘I’m supporting the restaurant’, but if you have a conversation with people, within two minutes they decide ‘Oh, I’ll order from you’,” he said.

“There’s definitely a place for delivery platforms, it’s the way of the future, but it needs to be sustainable for both parties.

“I’ve probably told people over the last five years they’re a necessary evil, but they did have benefits for my business.

“Now, as they’re getting more and more customers with the virus, and their fees are still so high, they’ve just become evil.”

Dominique Lamb, CEO of the National Retail Association. Photographer: Liam Kidston

National Retailers Association chief executive office Dominique Lamb said it had written to Uber Eats on behalf of members asking for the fee to be reduced to 25 per cent.

“Really, what we want to see is that Uber significantly reduces this rate rather than profiteering from a bad situation,” she said.

She said while fees were a concern across meal delivery apps, Uber Eats had by far the biggest market share and was the target of the NRA’s campaign to reduce fees.

It is understood that Uber Eats is not considering lowering its delivery fee for businesses.

An Uber Eats spokesman said the company wanted to do “what we can to help our restaurant sector make it through these unprecedented times”.

He said the company had focused on driving demand to independent local restaurants.

“This includes making up to $5 million in funding available for promotions on Uber Eats, introducing a new opt-in program for restaurants to receive daily payments to ease cash flow concerns, waiving service fees on pick up orders for all restaurants as well as waiving sign on fees for new restaurants coming onto the platform, including caterers,” he said.

He said Uber Eats had introduced a feature to allow customers to tip staff at restaurants, and had promised to match tips dollar for dollar.

Deliveroo was contacted for comment.