F&B operators say it’s hard to survive with 30% cut by delivery platforms, wants govt to step in
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Claiming steep commission charges, food and beverage (F&B) operators want Putrajaya to intercede with the country’s two main delivery providers for lower fees.
In a joint press conference held on Wednesday, several organisations from the industry said the current situation is a “duopoly” and said the charges imposed by the two companies are making it difficult for many restaurants to financially survive during the COVID-19 pandemic.
Vice-president of the Restaurant and Bistro Owners Association (PPRB), Jeremy Lim, said the “big two” currently demand a commission rate of 30 per cent or upwards from restaurants, due to their large customer base.
“We seek the government’s immediate intervention to engage and regulate the two largest food delivery platforms, and request for these platforms to offer a rebate, lowering their exorbitant commission rates to 15 per cent from now until January 2022.
“The reduction in commission rates can be made up from the influx of users and orders that these platforms get.
“It must also be ensured that the welfare of the delivery riders are guarded, the review to lower their commission rates should not affect the rider’s abilities to earn a living,” he said in the news conference without naming the “big two” platforms.
Lim added that the delivery commission rates coupled with the dine-in ban currently imposed by the government, has forced many businesses to “review and reorganise” their manpower as there is currently little need for waiters, hostesses and bartenders.
“Even kitchen crews are not spared due to the significantly reduced orders.
“Yes, our industry is allowed to ‘operate’ but you impose a dine-in ban without consultation or consideration of the stakeholders,” he said.
He said that restaurants were not built for a delivery-only business model and invested sizeable amounts into location, ambience and staffing.
“During this extended dine-in ban, we still incur monthly overheads such as rent, staffing costs and utilities but the revenue generated is less than 10 per cent.
“How is this sustainable with very little government aid or subsidies?” he asked.
Lim also said that he believes the federal government does not realise how significantly the dine-in ban impacts the entire F&B “ecosystem”.
“Farmers, fisheries, suppliers, distributors and many more businesses that make up a diverse ecosystem,” he said.
Lim later told Malay Mail when contacted that he was referring to Foodpanda and Grab when speaking about the two biggest food delivery companies.
“We prefer to not name them directly, but the whole market knows the big two are referring to Foodpanda and Grab.
“When dine-in was allowed, the commission rates were okay even if we were making a loss on the deliveries, as this was covered by dine-in orders,” he said.
Industries Unite co-founder Datuk David Gurupatham said allowing F&B operators to open but shutting down related businesses was akin to “wanting your pizza to be delivered, but the factories making the boxes are asked to close”.
HAPA Group founder and chief executive officer Jennifer Ong added that the affected F&B operators are not only independent restaurants, but also include those in hotels and food courts.
Currently, under the National Recovery Plan, dining inside restaurants is banned, even for states under Phase Two such as Kelantan, Pahang, Perlis, Perak, Terengganu and Sarawak.
However, the Sabah government has veered away from the federal regulation and allowed dine-in a week before it entered Phase Two on July 10. — Malay Mail