Food delivery operators cut commissions

Food delivery operators cut commissions

A food delivery man waits for his customer's meal at a shopping centre in Samut Prakan province. (Photo: Somchai Poomlard)
A food delivery man waits for his customer's meal at a shopping centre in Samut Prakan province. (Photo: Somchai Poomlard)

Food delivery platforms have begun to lower the commissions they charge food vendors after the government pressured them into assisting restaurants struggling to make ends meet amid the pandemic.

Many restaurants who rely on online delivery services have cried foul about gross profit (GP) shares of about 30% collected from food vendors, which they say erode their earnings during this difficult time.

Early this month, the Department of Internal Trade (DIT) held a meeting with representatives from food delivery platforms to discuss the vendors' concerns.

A source at a food delivery company who requested anonymity said the DIT is seeking a regulation to limit the GP share while calling on food delivery platforms to voluntarily lower GP.

"The government is asking online food delivery platforms to lower their GP rate to 15%," said the source.

The DIT pointed out a California regulation that caps the GP rate for online food delivery during the pandemic at 15% to assist local restaurants, the source added.

Online food delivery platforms in Thailand have recently begun to lower GP fees for the first time.

Gojek has announced new initiatives under its GoStronger campaign to support food vendors and users during the pandemic.

Vendors can choose either to receive a discount on their commission -- 25% instead of 30% -- or apply their commission reduction towards discounts for customers in order to increase sales, according to Shri Chakravarthy, Gojek Thailand’s country general manager.

The commission rate reduction runs from June 1-30.

Gojek will offer 15-20% discounts on all orders from participating merchant partners throughout the one-month period.

Interested merchants can register via an online form from May 24-30, 2021.

Yod Chinsuspakul, chief executive of Line Man Wongai, the operator of food delivery service Line Man, said his company is also offering to reduce its GP rate from 30% to 25% for merchant partners.  

The offer applies only to merchants located in Bangkok, Samut Prakan, Nonthaburi and Pathum Thani, however. They can apply until June 1.

Grab Thailand has come up with two assistance options for food vendor partners who pay over 25% commission rate.

First, Grab will offer commission rebates to them for the first 100 orders during a one-month programme, which starts on June 1.

Another choice is that Grab will offer a 50-baht discount code to users when ordering food a minimum of 200 baht per order from the participating merchant partners, with a total 10,000 redemption per day.

Interested merchants must make a registration to be eligible for the assistance programme from May 26 to June 4 by choosing either of these options.

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