'Tide turning' against Uber Eats as fees mount

Restaurants – including a food truck owned by AFL star Max Gawn – are mounting a campaign for the US tech giant to slash its fees amid the COVID-19 crisis.

Max Gawn, his two brothers, Todd. (hat) and Adam (beanie) .The Bearded Jaffle van and 'Bear' (horse) at Flemington. Picture: Tim Carrafa

Uber Eats is coming under increasing pressure to slash the fee its charges restaurants, with multiple businesses – including one owned by AFL footballer Max Gawn – telling The Australian they've had enough.

Uber charges around 30 to 35 per cent to restaurants, who are under immense stress as the COVID-19 pandemic continues to bite. Many of them feel they're forced to stick with the tech giant, however, given social distancing measures has forced customers to stay home.

The Bearded Jaffle, a coffee and jaffle food truck from Melbourne Football Club Max Gawn and his two brothers, Todd and Adam, has been running since 2017.

Todd Gawn, who has run venues including The Continental Hotel in Sorrento and Riva in St Kilda, told The Australian that dealing with Uber Eats had become a nightmare.

"This whole crisis has taken 10 years off my life," he said. "Before coronavirus hit, Uber was a necessary evil, but now we, and the whole industry, are reliant on them.

"None of us set out for UberEats and other delivery apps to be our sole source of revenue, we had Uber as a thing on the side to turn over stock."

Mr Gawn said he called, emailed and commented on Uber Eats' Facebook page until the company blocked him, in a bid to get The Bearded Jaffles' fees reduced from over 46 per cent, to their more typical rate of 35 per cent.

"I think considering we are paying through the nose with Uber, there’s no call centre, no response to problems, and we are getting less support than usual would, I just find it even more abhorrent," he said.

He has now turned to rival platform Mr Yum, a Melbourne-based online ordering platform that takes a 4.5 per cent cut of transactions.

"What we can make on 3-4 $50 orders on Mr Yum in one day, that’s the equivalent for us of 20 orders on Uber," Mr Gawn said.

"Restaurants and food trucks are in dire straits, but the tide is turning against Uber and with any hope customers will become aware of what they are doing to the industry and they can get kicked to the kerb, or start doing something to help."

Kristian Klein, director at Melbourne-based Japanese restaurant Mr. Miyagi, said his company's revenue is down significantly and has had to transition to becoming a 'fast food' store.

"We’ve had to rethink our menu, kitchen processes, how we speed up cooking and delivery, our marketing, how we get our food out to our customers, all that on a shoestring budget compared to our usual revenue," Mr Klein said.

"To survive, we’re really relying on online, we have pushed a lot of marketing to our own website, and we are now almost solely reliant on partners to facilitate orders and revenue but the larger delivery apps take so much margin, it almost renders them useless," he said.

"We don’t think the customers understand the fees, so we’re trying to educate on ordering direct, and for us that means using Mr Yum via our website, taking direct orders through to our kitchen.

"The 30-35 per cent take that the larger delivery apps charge, in simple terms, is the ability for us to be able to employ or not employ many of our staff."

Two petitions have also popped up calling on Uber to reduce its cut, with Melbourne-based food writer Dani Valent launching a change.org petition and Ben Fordham kicking off a campaign.

Mr Yum chief executive Kim Teo told The Australian that the silver lining of COVID-19 for restaurants was that they can be creative and come up with new revenue streams, and eventually be less reliant on delivery apps.

Mr Yum CEO Kim Teo. Source: Supplied.

She said she can keep her fees at 4.5 per cent given her app allows the restaurants to use their own staff as delivery drivers.

"Australians are starting to realise the Uber fees are super high," she said. "Most Australians wouldn't have known that before. I'm not confident Uber will reduce its fees, given how expensive their business model is."

She added that the only way the dynamic will change is if consumers vote with their wallets.

"More people are going out of their way to drive down to local restaurants and order ahead rather than using a delivery app, and that's really encouraging," she said.

An Uber Eats spokesman said the company last month announced a series of measures designed to help its restaurant partners.

"These are unprecedented times and the window of this pandemic is unclear, but we believe a holistic support package for restaurants and delivery partners will be the most sustainable solution," the spokesman said.

"We've partnered with Restaurant & Catering Australia to help expand the support we can offer Australians working in the sector at this time, this will go beyond the more than 20 thousand restaurants already on our platform.

"Of course it isn’t just the food sector that needs help during this pandemic, which is why Uber has also announced a global commitment to provide 10 million free rides and deliveries to healthcare workers, seniors and other people in need.

"We know there are more challenges to come as this pandemic continues and we will work with our partners to mobilise further support in the weeks and months that follow.”