There is no question that the hospitality industry has been left in disarray as a result of the current COVID-19 pandemic. One major factor that could balance the scales is a change in the 35% commission rate that UberEats, Deliveroo and Menulog are currently charging. One entrepreneur is paving the way for change, urging these delivery giants to also cut their rates in order to save the hospitality industry.
Stevan Premutico is one of Australia’s leading tech entrepreneurs. In 2007, he conceptualised Dimmi Online Restaurant Reservations on the back of a napkin. This went on to revolutionise our national restaurant industry and a few years later his start up was acquired by one of the great tech businesses of our time, TripAdvisor. In addition, he is the founder of me&u – a smart app that allows foodies and restaurant-goers to order and pay for their meal easily at an eatery.
Recently, Stevan announced that me&u has paused all commissions for the foreseeable future in a bid to assist the hospitality industry. As a start up business, it is a decision that will affect revenue. However, Stevan feels that it is the right thing to do, and notes that if me&u can make the change, then so too can the Delivery Giants.
“I love this industry, and the people in it, and I believe now is a time of crisis and we all need to bond together. The crazy high commission rates charged by UberEats, Deliveroo and Menulog at this time will absolutely cripple the hospitality industry and force many to close. We all need to step up and do what we can to help during a time of crisis. There is something like 1 million Aussies connected to this industry. If businesses fold, if staff lose their jobs, Australia goes into recession, faster.”
Restaurateurs are also struggling due to the pandemic, as a direct result of the restrictions put in place by the government recently.
Executive Sous Chef at Mindil Beach Casino Resort in Darwin, John Ross, has seen a major downturn in business as of late.
“Around 20% of our customers during the Wet Season are tourists. Dry Season is a different story, the number easily doubles. So, we have understandably been hit hard. In Darwin we rely on the cruise ships for additional revenue and business. So, due to the current international cruise ship bans in Australia, we are experiencing the effect of their absence.”
“Our business has dropped by 60% this week. I am shutting one restaurant soon, for the unforeseeable future. No buffets either – breakfast lunch or dinner, along with all banqueting conventions ceased. We encourage our local Territorians to continue to support their local venues.” Like Stevan, John too is also disappointed with the major Delivery Giants. “It’s a disgrace that they aren’t dropping their commissions. More needs to be done.”
Another factor set to make an impact on cash flow and patron numbers is the new limit on organised gatherings imposed by the Australian Government’s Department of Health. There is now an internal gathering limit with a maximum of 100 people in an indoor space at a time, including restaurants, pubs and cafes. With an additional social distancing practice of 1.5 metre distances recommended, it is evident that even though each of these measures are necessary to limit the spread of COVID-19, their consequence for hospitality workers and employers is irrefutable.
“As someone who loves this industry, I am calling on all delivery platforms to do what is right and bring down their rates, urgently,” Stevan concluded.