Hospitality, Startup News & Analysis

This Melbourne pizza business is breaking up with UberEATS, following customer complaints and rising fees

Emma Koehn /

pizza religion

A Pizza Religion Pizza. Source: Supplied.

A Melbourne pizza business says it will stop using the UberEATS platform this week because the commission of up to 35% that the ride-sharing platform takes on delivery orders is not sustainable.

Meanwhile, the business says dealing with customer complaints about the UberEATS service also take up too much of its time.

Pizza Religion has five outlets across Melbourne and Geelong, and director Matt Hunter says his business is parting ways with UberEATS one year after its Hawthorn, Malvern and Armadale stores joined the platform.

“We’ve been with UberEATS for 12 months and we basically looked at it [initially] because with our current deliveries, we were so busy,” Hunter tells SmartCompany.

Initially the offer was that Uber would take a 22% flat rate on the value of Pizza Religion orders placed through the site, meaning that for a delivery order of $100, UberEATS would take $22, Hunter says.

“They’ve now raised it to 30% and recently asked for 35%,” he says.

Hunter says Pizza Religion processes a large volume of orders across all its stores, but the company will now evaluate new options for delivery services, deciding the deal on offer from UberEATS is not worth it for the business overall. The business has previously offered its own delivery service.

Along with the cut that Uber takes on orders, Hunter says his business also has to deal with complaints from their customers about UberEATS drivers and the delivery experience.

He says this is a time-consuming task, given Pizza Religion has no control over what happens to an order once it leaves the store.

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

He believes others in the hospitality sector also have concerns about the standard of service through the food delivery platform.

“There is a lot of talk in the industry about the poor level of service and we simply want our product delivered in the best possible way,” Hunter says.

Delivery platform terms vary

SmartCompany asked Uber to confirm how it determines what businesses are charged through its UberEATS platform, and what support is available for things like customer complaints.

The company declined to provide details of the rates that it offers partner restaurants. However, it said hospitality businesses are paying fees to Uber that go beyond a simple listing on its platform.

Restaurant fees help contribute to delivery partner payments, 24/7 customer support, app development and marketing campaigns,” an Uber Australia spokesperson told SmartCompany.  

There are no shortage of food delivery platforms in Australia and UberEATS says it has partnered with more than 5000 restaurants since launching in Australia in 2016, where it started with the Melbourne and Sydney markets before expanding into smaller markets like Canberra this year.

UberEATS says its strategy is to provide the most “rewarding experience” to restaurants when compared with its competitors.

SmartCompany asked some of those competitors what terms small businesses could expect when signing up to their platforms, however, a number of them indicated that small businesses are only informed of the exact terms of an agreement upon starting the sign-up process with their platform.

Menulog was the only company to confirm its standard commission rate, which is 12% plus a two percent processing fee, or 14% of the overall value of an order placed on the platform.

Foodora declined to reveal its standard commission rate, instead telling SmartCompany the rate “is established on a case by case basis depending on the venue type”. 

Deliveroo confirmed it charges according to a “performance-based model” where a small percentage of each order flows back to the delivery platform, but declined to reveal how this rate is calculated.

Each platform also has its own tools for supporting hospitality businesses with things like complaints, but these vary between each company.

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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Emma Koehn

Emma Koehn is SmartCompany's senior journalist.

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  • Industry Travel Asia

    We don’t deliver pizza. At https://Future.Travel we deliver airline tickets and the associated flights. We discovered early on that a pet hate of customers, poor service, was able to be mitigated by eliminating that which we could not directly control or influence through the supply chain. So we don’t offer many of the 100’s of the discount airlines. They simply have deaf ears, poor customer (B-C, B-B) support and are generally the cause for tears in the breakdown of major problems being reported. So we are selective in our offerings. We offer a premium service at a self service price point by eliminating the friction points.

    Congratulations on Pizza Religion for listening to the public and removing the friction point. Your staff will be happier, your customers will be happier, your brand will be happier, your accountants will be happier, and your pizza will taste better. They always do taste better when you don’t start with a bitter customer experience taste in your mouth upon delivery.

  • UberEats really needs to lift its game in some respects (and lower commissions if it wants to be sustainable). It’s just not good enough to allow orders to be dispatched on bicycles and to arrive stone cold and soggy. It gives the restaurant a bad reputation. What I will say is that, as a customer, I’ve found UberEats to follow up rapidly and fairly, but I’m not sure if the refund they provided was expected to be paid by the restaurant.

  • Chris Taylor

    Unfortunately UberEats business model is not at the same expectations of it targeted consumers restaurants and delivery people , let start at the production end the gross profit of a gourmet pizza at current price levels cant sustain 35% uber delivery cut and the next big killer to any internet based business in 2017 real time feedback by the ever fussy consumer finally the last kink in this doomed road the poor delivery person treated like disposable nappies by uber attitude lets just get another poor sucker to do low paid deliveries most of these poor workers have to wait for every taxable paid dollar to hit their bank account, the only winner here you guessed right BLOODY UBEREATS Unfortunately what works in third world countries doesnt work in good old AUSSIE

  • Level380

    Anything with the ‘Uber’ name attached to it, means that all parties delivering the service are getting screwed over.

    Uber does this to UberX drivers, it does it to the UberEATS drivers, and its doing it to its UberEATS ‘partners’ supplying the food.

    The company screws each party so the only one that can remotely make money is Uber and even then, they are losing money hand over fist!

    So for $100 worth of food, the restaurant ‘partner’ only sees $65, out of that they have to supply the food, cover all costs of having REAL local staff and business, oh and they have to pay GST on the $100!, so they really only get $56 dollars after the GST part, as Uber is a overseas scum company that doesn’t have GST included in its ‘commission’ charged.

    Uber gets $35 and it has to do what? Next to nothing, has overseas $1/hr staff answering the questions, the app is used world wide, so costs are low etc, doesn’t pay GST.

    Guess who the suckers are?