A Fitzroy bourbon bar is the latest hospitality business to publicly announce its breakup with UberEats, with the general manager saying he was told by the platform algorithm issues and “the weather” had limited his business to a smaller delivery radius than its competitors.
The Kodiak Club told its Facebook followers it was leaving the food delivery platform last week, sharing the story of fellow Melbourne business Pizza Religion, which last year told SmartCompany the high commissions taken by the platform were not sustainable.
Kodiak Club’s general manager told SmartCompany he and his business partner inherited the UberEats account for the business when they took over operations six months ago.
About a month into taking orders, it became apparent there were only a few orders coming through each night and the venue was only showing up as an option for UberEats users in the immediate suburbs of Fitzroy and Carlton.
This is despite other venues in the same strip as the Kodiak Club, on Melbourne’s busy Brunswick Street, having listings that show up for users in more distant suburbs, including the Melbourne CBD, he says.
The general manager knew this was the case because he tested it a number of times. He says they opened the UberEats app on his own device when in locations like Southbank and could see their Brunswick Street competitors listed as available to users in that area, but not the Kodiak Club.
The business contacted UberEats for an explanation, which the general manager says was far from satisfactory.
“They basically said that our radius was set by some algorithm to do with the weather and the availability of drivers,” he says.
With no offers from the delivery platform to improve the company’s listing, the Kodiak Club decided enough was enough.
The manager says this was the final straw after a range of other concerns the business had about UberEats, including the 30% commission Uber was taking on orders, as well as late drivers and even one incident where an Uber driver took off with an order clearly marked as a Foodora delivery.
“My partner also plenty of times got in the car [with an Uber Eats order] so that we could just do the delivery ourselves,” he says.
The Kodiak Club is currently examining the possibility of doing all its delivery in house, planning a “Kodiak Catering” model that would see it have complete control over logistics.
The general manager says the business was also concerned about the amount of cash UberEats drivers make on each order, saying it views the UberEats model means drivers are paid “so poorly”.
In a Facebook post, the business called for other venues to also leave the platform, saying they should “take a stand for integrity and service”.
SmartCompany contacted UberEats for comment on how its algorithm affects the delivery radius of a venue.
The company would not comment on individual cases, but said the delivery radius companies have on the platform is “dynamic” and change due to factors like rain or during busy periods.
You can help keep SmartCompany free for everyone to read
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany Supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.
And it’s not all one-way traffic either. SmartCompany Super Supporters get to dial into our monthly editor’s meeting and attend a monthly, invite-only webinar with a big-name entrepreneur.