Hidden costs: Tough restaurant conditions prompt delivery warning

Businesses have been warned to crunch the numbers on their food delivery costs in the face of tightening margins and rising insolvency in the hospitality sector with business owners complaining of hidden costs on the platforms.

Owner of Melbourne business Burger Love, Steve Agi, said he has a “love-hate relationship” with startups like Uber Eats and Deliveroo. He’s had to employ a part-time staff member just to review and manage cases where customers have requested a refund or reported an issue via a food delivery app.

…Restaurants said they often get blamed for issues with food delivery even if it’s not their fault.

…At the same time, insolvency practitioners warn companies must make tough decisions about whether to use these platforms, as margins in the hospitality sector are tightening.

“The question really is, are restaurants layering on further costs in order to service the delivery market?” Jirsch Sutherland partner Andrew Spring said.

Mr Spring warned this week that restaurants are facing a potent cocktail of high rents, increased competition and labor costs. Brand differentiation and cost tracking is key to surviving in this environment, he said.

… Over the past two years the commissions charged by food delivery platforms has been a key point of contention for small businesses. The startups have argued that it’s worth it for businesses because of order volumes.

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