High commission rates charged by delivery giants Uber Eats, JustEat and Deliveroo are making local restaurants untenable, a British Bangladeshi business representative has said.
In an exclusive interview, the British Bangladeshi Caterers Association President, Salim Chowdhury told BritShish, “There’s two types, some of the [delivery] platforms, where if you have your own driver, they charge anything between 15-18%, if it’s their driver they’re charging up to 30-35%. Now there are very few businesses I would say who actually make 30% profit margins. If you take all your expenses into account, your rent, rates, your staffing, your net profit wouldn’t be that much, so those businesses would not be able to sustain. If your margin is not there it does not matter how much business you are doing, there is no profit left because the margin you had is being taken by these platforms.”
Mr Chowdhury added that despite extensive support from the government and plans to gradually ease the coronavirus lockdown, many restaurants and takeaways are not out of the woods yet.
“We are extremely grateful to the government for having the furlough, and also having the grant and there’s holiday periods for your VAT, but obviously you have to be aware that this is all going to gradually come to an end, and even having all that support there are businesses that can’t cope.
“Also with social distancing, there’s a lot of other measures, you have to take precautions. So there are businesses that are suffering substantially. The reason being, the furlough will come to an end, a lot of people will have the build-up of the VAT which they’ve got a holiday period [for], but what you have to remember is the VAT is still due, you pay later but you still have to pay. The grant will have been used up and also even once you’re allowed to open, people are not going to rush to a restaurant, a lot of people will be cautious and hesitant, and for social distancing your capacity will be reduced hugely some up to 50%, so if you had a 100 seater restaurant it becomes a 50 seater, if you had a 50 seater restaurant, it becomes 25, so is it feasible? So, it’s tough times ahead.”
The business leader also made pleas to large delivery companies, local restaurant and takeaway owners and their customers, saying, “To the delivery companies, we appreciate the platform that you provide, but to be fair please reduce your commission as much you can. To the people [entrepreneurs] like myself, if I have my own client-base, then I’m not having to give my commission to the platform that’s providing me the service. I would create my own database, create my own platform then you’re not sharing your little bit of profit with anyone, it’s yours to keep.
“To the local customers, when you find a restaurant, I know the typical thing we do is when we have a certain platform, certain delivery company, we have the app on our phone, we go there. But if you go directly to the businesses, you’re supporting a local business and they get to keep that little margin they have, that’ll help them immensely so please support your local businesses, go direct to them.”
You can support your favourite local restaurants and takeaways by ordering your food with cafes and restaurants directly — and avoiding Deliveroo, Just Eat and Uber Eats. Get the message out by posting on social media with the hashtag #DropTheApp.