Hospitality

Cheaper UberEATS delivery fees could be on the way, but local businesses are asking customers to avoid the service

Dominic Powell /

Uber Deliveroo

Source: shopblocks/Flickr

A wave of significant changes to the pricing model of food delivery service UberEATS are set to roll out this week in the US, but local Australian businesses are still concerned the service is draining money from small restaurants and cafes.

CNET reports that all users in US cities with access to the UberEATS platform will now see a new spate of options when it comes to delivery, with the company ditching the flat $5 delivery fee for a sliding scale of delivery costs, spanning between $2 and $8.

This new pricing tool has been in the works for a while and was under a trial period, but the company has now taken the wraps off. Users ordering from restaurants will now see delivery fees adjusted for how close or far away the business is, with the closest restaurants costing just $2 for delivery.

Users will also be able to filter restaurants by the amount they wish to pay, excluding those that are more expensive or giving the green light to restaurants further away with higher delivery fees, potentially providing more business for SMEs as their delivery ranges could expand.

Speaking to CNET, product manager for UberEATS in the US Ben Dreier touted the changes as mainly user-centric, wanting to make delivery an “an everyday thing” in people’s lives.

“We’ve been talking to eaters to better understand what are the barriers. What became obvious was that we needed to change something about our core fee feature,” he told CNET.

There’s no indication currently as to when the delivery changes will roll out in Australia, and Uber has also not revealed how the fees will affect business’ cuts from their deliveries.

At a surface level, it would seem these changes could benefit SMEs, as the opportunity for higher delivery fees means businesses further away from users could unlock new customers.

UberEATS issues still plague businesses

However, issues with UberEATS’ fees have been a regular pain point for businesses selling through the platform. Numerous businesses have spoken to SmartCompany over the past year, lamenting the service’s commission of up to 35% on each order, which they say is not sustainable.

Pizza Religion director Matt Hunter told SmartCompany late last year the company’s commission had jumped from 30% to 35%, and he was leaving the platform due to the high costs and poor customer service.

“We get many calls from our customers complaining about the level of service from UberEATS and we can’t rectify it for them, which is very frustrating,” he said at the time.

Similarly, Caitlin Craufurd, co-owner of Marrickville cafe Petty Cash told SmartCompany Uber had stopped taking full responsibility for orders during delivery, opening up businesses to further liability which the business owner called “incredibly exploitative”.

Fairfax reports Melbourne institution Marios Cafe recently asked customers to stop using food delivery platforms such as UberEATS, Foodora and Deliveroo, calling them “parasites” in a fiery Facebook post.

“Do not order from any of the delivery groups call the restaurant direct and make sure they have their own delivery, or otherwise get of [sic] your ass and go and pick it up or better still eat it there,” the owners wrote.

Speaking to Fairfax, co-founder Mario Maccarone said he and his co-founder Mario de Pasquale had been approached by numerous delivery companies but had chosen to avoid them.

“We’ve been approached by all of the platforms  but with those huge big plastic backpacks, well, there’s a certain ugliness about it,” he said.

“It’s a thing that may work brilliantly for some, but we’re not interested in buying into it.”

Food delivery in Australia has had a rocky past with numerous entries, exits, mergers and acquisitions. Most recently, German food delivery company Foodora announced it would be leaving the Australian market by August 20, saying it was seeking other markets with “higher potential for growth”.

SmartCompany has contacted Uber Australia for comment.

NOW READ: Food delivery company Foodora facing “unquestionably significant” legal action over alleged sham contracting

Passionate about the state of Australian small business? Join the Smarts Collective and be a part of the conversation.

Advertisement
Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

We Recommend

FROM AROUND THE WEB