In the delivery wars, this small business owner says UberEATS is their best bet


Concerns have been raised about the fees and complaints resolution offered by UberEATS, but one small business owner says that for the little guy, the food delivery platform is an essential tool to capture customers who demand food on their terms.

On Monday, Melbourne business Pizza Religion told SmartCompany it was leaving the UberEATS platform, citing the 35% commission charge and time taken up by dealing with customer complaints about the service as reasons for breaking up with the platform for good.

Director Matt Hunter said “there is a lot of talk in the [hospitality] industry about the poor level of service”, explaining that 12 months into the UberEATS experience, his business had not benefited from the platform enough to keep paying for it.

However, one Sydney small business owner, who runs a food business as a pop-up within another establishment, says that without UberEATS he simply couldn’t offer delivery to customers in the area.

“I operate out of a bowling club, and I do functions and home delivery as well as takeaway,” he tells SmartCompany.

“I don’t have a retail frontage, and it works quite well for me because I don’t have to employ a delivery driver.”

The business owner, who wishes to remain anonymous, pays the same 35% commission charge to Uber on orders via the UberEATS platform, but has a tiny team and often operates essentially as a one-man show.

As a result, he says he wouldn’t be able to capture the crowd of punters who want his product delivered to their homes if he didn’t use UberEATS.

There are a range of food delivery services for a business of this size to choose from, but not all of these offer the personnel to complete the deliveries.

On Monday, Menulog confirmed to SmartCompany that it charges a 14% commission on orders placed through its platform — but the service requires that businesses supply their own drivers, which isn’t feasible for all operators, says the Sydney business owner.

Despite concerns being raised about the time taken up when customers complain to venues about poor UberEATS service, the Sydney operator says he has had few issues with drivers.

Only once has he had a customer put a serious complaint to him about service — and in that case, there were questions raised about the driver from the beginning.

“This driver was very, very slack, and he actually arrived on a Deliveroo bike [for an UberEATS order],” he says.

“Initially I thought, well, this guy is a bit entrepreneurial, but then he picked up the order and he was so late [delivering it to the customers].”

Whether food delivery platforms present the best deal for individual businesses or not, the numbers suggest diners expect meal deliveries to be available across all venues.

Recent IBISWorld research suggests UberEATS, Foodora, Menulog and Deliveroo now control more than 75% of all online delivery orders, with customers using these instead of ordering direct through restaurants.

Food delivery services are said to have contributed a 2% increase in restaurant revenue over the past year, according to IBISWorld analysts.

Australia’s fast food sector, which is projected to grow by 1.5% a year over the next five years, is also predicted to see a shift away from company-operated ordering systems to options that integrate the most seamlessly into customer’s smartphones, the research suggests.

For businesses thinking about signing up to a service, the advice from owners is to research whether the service matches your needs.

For Hunter’s Pizza Religion, he says the payoff is not enough with UberEATS to keep the platform going across all stores.

However, the Sydney business owner says while he wishes the commission was lower, it’s still “the most cost-effective way” for his business to feed customers who expect delivery.

Does your business use UberEATS or another delivery platform? Do you have a story to share about the service? Email us at [email protected]

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Jan Deane
Jan Deane
3 years ago

Apparently some of these food delivery services pay their delivery staff on the basis of being “contractors” when they are actually employees who work rostered shifts and paid an hourly rate (around $18 according to the article I read), but no causal loadings, penalty rates etc. Their business models are based on the staff being paid as contractors – it will be interesting to see what happens if the FWC follows through with this case.

3 years ago
Reply to  Jan Deane

Deliveroo and Foodora have rostered hours, set locations, hourly guarantees and even branded clothing and delivery bags. Which is clear on their online sign up page. They clearly have worker-boss relationship, but dont follow employment law (holidays, minimum wage etc.)
However, UBEREATS dont do anything of that. So far, EATS has made an honest attempt at a sub contractor relationship with their drivers.