Uber Eats caps commission fees
Uber Eats will cap commission fees to 30 per cent and allow businesses to deliver through the app, but drivers are nervous this will mean fewer jobs for them.
After facing a backlash over its commission fees, which ranged from 30-35 per cent, Uber Eats had dropped fees to a flat 30 per cent permanently, the company said.
From May 18 restaurants will be able to use their staff to deliver orders made through the Uber Eats app, paying an 8 per cent commission rate. From August 1, this commission rate would increase to 16 per cent.
Uber Eats New Zealand general manager Jodie Auster said the changes to its fees were part of pre-Covid-19 plans to be more transparent.
‘‘Right now businesses are doing it tough, so giving them that choice and control is super important.’’
When the Restaurant Association asked for the Government to intervene on Uber Eats’ high commission fees, Prime Minister Jacinda Ardern encouraged Kiwis to eat local and use restaurants that did their own deliveries under alert level three.
Auster said the ‘‘support local’’ message was ‘‘well aligned’’ with its business.
‘‘The app is exactly connecting people in their neighbourhood to restaurants in their neighbourhood. The backlash comes from people not understanding how the app works and where the marketplace fees goes to.’’
Restaurant Association chief executive Marisa Bidois said 30 per cent was still high, but it was a ‘‘step in the right direction’’.
Auster said it would not be sustainable for the business to reduce its fees any further than 30 per cent as the fees supported drivers, its own operations and promotional funding for restaurant owners.
She said the commission fees went into Uber Eats’ customer service and marketing for small businesses that typically relied on foot traffic to be noticed.
But Mexicali franchisee Richard Murray used the Uber Eats platform for his Christchurch business and said Uber Eats’ $5 million promotional fund was not the support businesses were after.
Murray said the 30 per cent commission rate was a significant cost to a small business. ‘‘It comes straight off the top line and you’ve got additional costs, so there’s not much left at the end of the day. Ideally you’d have more people coming to your business, but it’s going to be a while before we see that bounce back.’’
In March, Uber Eats introduced free pickups until July 31. From then on businesses would be charged 13 per cent commission.
Auster said in the first week of level three, Uber Eats trips were the highest they had ever been in New Zealand, with 13,000 sign ups. Uber Eats drivers told Stuff they were being impacted by the free pickup service on the app which was available under level three.
Wellington driver Sanjesh Lallu said before the lockdown Uber Eats drivers typically earned about $20 an hour.
He said because customers were doing pickups from popular food chains on Uber Eats like McDonald’s and Burger King, he made as little as $5 in an hour.
Lallu said the self-delivery option would be a ‘‘big loss’’ for drivers.