Uber Eats trims restaurant charges

Uber has caved to mounting pressure to trim the fee it charges restaurants.

Uber Eats has cut its fee to restaurants

Uber has caved to mounting pressure to trim the fee it charges restaurants, cutting the maximum rate from 35 per cent to 30 per cent as the local hospitality industry struggles to survive amid the COVID-19 pandemic.

Multiple restaurants have spoken out against Uber Eats’ fee in recent weeks, with petitions from Melbourne-based food writer Dani Valent and Ben Fordham gaining thousands of signatures across the country.

Uber Eats Asia Pacific boss Jodie Auster told The Australian that the commission fees had been a key concern for restaurants, and that pressure to reduce them had intensified since the onset of COVID-19.

She said the fee cut from 35 per cent to 30 per cent would be a permanent change, and was an effort to help relieve pressure on restaurants’ bottom lines.

“We’re going to charge different levels of commission depending on the package that a restaurant goes for,” Ms Auster said. “If they take the full package, which is the standard delivery option that has been in market for some time, we’re introducing a 30 per cent cap for that, which is a 5 per cent reduction from the 35 per cent fee we were charging.

“We don’t have a business if restaurants don’t want to come online and partner with us every day.”

Uber Eats will also give restaurants the option to use their own delivery staff, and the company will then charge an 8 per cent commission fee. Another option is pick-up, and Uber said it will charge no commission on those orders until the end of July.

“We’re really making a step to be much more transparent around where the fee goes,” Ms Auster said.

“Restaurants are having a really hard time through the COVID-19 crisis and getting the prices right has taken us a lot of thought to make sure they’re sustainable for everyone and meaningful for partners. We’re trying to balance what we think a restaurant can bear in the long term, with how they choose to partner with us and their goals and the financial health of that business.”

The fee shift comes amid an intensifying battle for market among the food delivery majors, which has been spurred on by the pandemic.

According to Ms Auster, the fees charged by Uber Eats help cover the costs of enabling reliable and consistent earnings opportunities for delivery partners, generating demand for restaurants, and the revenue needed to support Uber’s business operations.

It’s somewhat a tale of two businesses for Uber globally, with its ride-sharing business shrinking but Uber Eats growing rapidly. The company shed about 14 per cent of its staff last week, alongside mixed first quarter 2020 financial results.

Ms Auster said Uber’s ridesharing business in particular had taken a hit from COVID-19, but that the business was robust overall and would weather the pandemic.

“Being able to offer the drivers an alternate source of work in food delivery, and therefore keep them engaged so that they’re there as the ride business recovers, we won’t be faced with the difficult expense of re-engaging people.”

As for the future of the service, Ms Auster said she wants to grow Uber Eats from a “Friday or Saturday night dinner option” to something much broader.

“We want Uber Eats to be a platform for any eating occasion, at any time of the day,” she said. “Whether the food is fully prepared from a restaurant, to raw ingredients from a grocery store, we want to be able to provide anything you need at any time for any eating occasion.”