Hospitality

“Incredibly exploitative”: Small business angst over UberEATS continues as venues told they will have to share the cost of error orders

Emma Koehn /

Another small business has said it will step off the UberEATS platform because it is impossible to turn a profit on orders, as Australian venues are told by the food delivery platform they will now have to help foot the cost of delivery errors.

Petty Cash cafe in Marrickville has received widespread support after informing customers via Facebook it was signing off from the food delivery platform from January 31, saying: “We feel UberEATS is incredibly exploitative of small business AND drivers”.

The business claims it is impossible to turn a profit after the ride sharing service started taking a 35% commission on orders.

However, the venue said it has also reevaluated its presence on the platform after being informed UberEATS “no longer takes full responsibility on delivery”, which could lead to excess costs for suppliers.

Speaking to SmartCompany this morning, Petty Cash co-owner Caitlin Craufurd said her business received an email from Uber that indicated that while the commission paid by eateries previously covered all costs associated with delivery concerns and complaints, it was no longer always going to cover the costs when there are issues with a delivery.

The business believes this means that venues and drivers will be footing more of the bill in future if there are complaints about a missed item or problematic order.

SmartCompany has seen an email from UberEATS to the business informing it that from next Monday, businesses “will be responsible for sharing the cost of order error refunds”.

As part of this change, the platform says businesses will now be issued with a weekly order activity summary that will give line-by-line details of customers reporting missing items, incorrect items and incorrect orders.

“We have measures in place to protect against fraudulent customer or delivery partner errors,” Uber said in the email.

Petty Cash says the only way a business can contact Uber to discuss the terms of being on the platform is via email and this makes it difficult to negotiate any changes.

SmartCompany has contacted Uber Australia for comment on the changes and clarification about who currently shoulders the cost of order errors, but has not received a response.

This is not the first time small businesses have spoken out about the UberEATS model not working for them.

In October, Melbourne business Pizza Religion broke up with the platform, telling SmartCompany at the time that aside from high commissions, the food delivery service was also prompting customer complaints that couldn’t be resolved.

“We get many calls form our customers complaining about the level of service from UberEATS and we can’t rectify it for them,” said Pizza Religion director Matt Hunter at the time.

However, SmartCompany has been told that in recent months, the Australian version of the app has allowed customers to report a “missing item” from their order and then have a new order placed immediately, at no cost to the customer.

Should missed orders should be covered by businesses?

Other small business owners say the UberEATS model still works well for them and they have not received communications from the platform that there will be changes to incorrect order charges.

Rod Polain, who lists his takeaway food business RBP’s Smokaroma on the platform and has experienced positive results, says to his knowledge Uber will still absorb the cost of any order errors.

He says in general, the platform has been quick to resolve any issues if they have arisen with orders.

However, he believes that if a business has genuinely missed an item or delivered an incorrect order through UberEATS, they should have to foot the bill for it.

“I have had that issue before, where I’ve missed an item. And if I’ve stuffed up, I’ve stuffed up,” he tells SmartCompany.

To his mind, other businesses may have complained about UberEATS in the past, but it comes down to making a choice on whether the platform actually suits your hospitality business.

“For me, it’s a convenience thing because I do not have to employ a driver,” he says.

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Emma Koehn

Emma Koehn is SmartCompany's senior journalist.

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