Many restaurants will go out of business while delivery aggregators continue to charge “extortionate” fees, according to The Tashas Group managing director Natasha Sideris.
Having been forced to look into using delivery platforms because of the ongoing coronavirus pandemic, Sideris told Caterer Middle East she was shocked to discover the 30% commission charged by aggregators.
“Restaurants run on very tight profit margins, as all of our expenses are going up in terms of labour and overall operations, our profit margin is constantly being eroded,” said Sideris. “This commission means that we need to raise our prices to the customer in order to squeeze out even the tiniest margin in order to justify running deliveries.”
With restaurants being unable to make money from dine-in for the past month and being forced to rely solely on delivery, Sideris said the current model is “completely unsustainable” and drives up prices for customers.
Sideris said: “So the only winners are the aggregators. They say that they position themselves as technology companies and justify the commission to cover their overheads however their current rates are extortionate.”
With restaurants slowly being able to open again under severe restrictions, Sideris said she doesn’t intend to continue on with the delivery model as it stands once things return to normal. She told Caterer it is vital that aggregators change their model to ensure restaurants don’t go out of business.
“Ideally, I would like to see a 0% commission and kilometre rate for delivery. There is no justification for taking an added amount based on our cost of goods. They should take it upon themselves to voluntarily and immediately move to dramatically reduce commissions during the current shut down.
“If this is not possible, then there needs to be a law passed that caps the percentage they are allowed to charge, that lies somewhere between 10% and 15%. For example, San Francisco has enforced a cap of 15% during the current state of emergency and New York City has put into motion a law that would cap all fees going forward to 10%. This is an international issue – not just a regional one.”