Delivery services drive eateries down road to ruin
FOOD delivery services are being accused of running restaurants into the ground, as their high fees make venues unprofitable and dramas with delivery drivers irreparably damage eateries’ reputations.
Almost a third of the restaurant industry is using food delivery services, according to Restaurant & Catering Australia, paying between 30 and 35 per cent of revenue from delivery orders to the likes of UberEats and Deliveroo, on top of rising costs for rent, electricity, wages and food.
R&CA chief executive Wes Lambert said the delivery services were the final nail in the coffin for many businesses, forcing them to close as they simply couldn’t turn a profit using a system that was designed for the American and UK markets, where hospitality labour costs were only a tenth of those in Australia.
“Those economies can support high-commission delivery because their wages in the hospitality industry are some of the lowest in the world. But it’s difficult in Australia with a high-wage economy to support that,” he said.
Mr Lambert said since the introduction of UberEats and Deliveroo Down Under, profits in the restaurant and cafe sector had dropped. “The majority of our members are telling us that bums on seats have diminished while their delivery has increased, which is much less profitable,” he said.
For the first time, R&CA expects the sector to experience more exits than entries in the next financial year, as venues hit the wall in record numbers.
An UberEats spokesperson said delivery drivers were expected to comply with community guidelines and the fact more than 16,000 restaurants used the platform was “a testament to the positive results”.