Uber Eats is hurting restaurants in South Africa, say owners

Uber Eats has admitted to not paying the money owed to Cape Town restaurant Yindees Thai for months, putting the business at risk and nearly forcing the owner to close his establishment.

Yindees Thai Restaurant owner Nirun Kotkong took to social media in desperation to get paid.

“Uber Eats was a good customer. However, since before lockdown they have not paid me one cent and they owe me so much,” he said.

Kotkong said he needed this payment from Uber Eats, which exceeded R100,000, to pay rent, pay salaries, and cover his overheads.

“I have tried to call their call centre in India. I have emailed their head office in Canada; they keep making promises but do nothing,” he said.

An Uber spokesperson told MyBroadband they are aware of an issue regarding payment to one of their restaurant partners and have been investigating this with a matter of urgency.

“We reached out to the owner as soon as we were made aware of the social media post and have since identified and rectified the error,” Uber said.

“We are providing additional assistance to the restaurant partner to ensure this doesn’t happen again.”

Uber Eats implied that Yindees Thai loaded incorrect details and this caused the problem, saying businesses should make sure their “details are loaded correctly onto the Uber Eats platform”.

Kotkong, however, dismissed this implication, saying he was previously paid in March, which clearly shows Uber Eats had the correct details to make payments.

MyBroadband asked Uber Eats how many other South African restaurants are currently not getting paid, but the company did not answer this question.

It also did not state whether it has any systems in place to ensure restaurants are being paid.

High service fee for restaurants

When Uber Eats offered to waive its usual 30% (excluding VAT) service fee to Yindees Thai Restaurant for its mistake, Kotkong had another suggestion.

He said a much better solution was to reduce its normal 30% service fee to 20% during the lockdown to help struggling restaurants.

This view was echoed by other restaurant owners, who told eNCA that Uber Eats’ high fees make it difficult to survive.

Woodlands Eatery owner Matteo Santini said Uber Eats accounts for a large part of their revenue, especially with sit-down clients disappearing.

Toni Silva, who owns Toni’s Restaurant, said Uber Eats’ high service fees means they are not even breaking even.

Uber responds

Uber told MyBroadband it charges a service fee up to 30% and allows restaurants to be part of the Uber Eats marketplace, which includes visibility, promotions, and marketing activities.

Uber Eats said it is a three-sided marketplace:

  1. It offers consumers quick and reliable food and essentials delivery.
  2. It offers restaurants and stores access to new customers.
  3. It offers delivery people flexible economic opportunities.

“Our service fee is required to sustain our operations and ensure that we can provide a stable platform connecting restaurants to a safe and reliable source of delivery people who bring orders to customers in under 30 minutes,” an Uber spokesperson said.

“We are absolutely committed to supporting restaurant partners during this time,” Uber said.

“To sustainably support our partners in this evolving crisis, we considered a number of options, and decided to focus on driving demand.”

Uber said during the lockdown they have implemented some of the following measures:

  • Introduced a daily pay-out feature (instead of weekly) to help restaurant cash flows.
  • It is investing in marketing efforts to support local restaurants and small businesses which included waiving the delivery fee in May, and its is currently running other promotional and marketing activities.
  • It has waived activation fees for new restaurants and is making it quicker and easier for new restaurants to join Uber Eats.
  • It waives commissions on all pickup orders facilitated by Uber Eats (0% on pickup).
  • It has accelerated our plans for essential items and convenience deliveries on Uber Eats and we are also pursuing new services to provide on-demand and scheduled delivery solutions to consumers and businesses.

“We believe the success of every restaurant depends on customer demand, which is why we have put the majority of our efforts into driving orders towards restaurant owners and operators on Eats,” it said.

“We will continue to invest in measures that are sustainable for all, and that will help restaurant partners to attract customers and increase order volumes while ensuring earning opportunities for delivery people using our app.”

Interviews with restaurant owners

Now read: Uber South Africa silent on job cuts

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Uber Eats is hurting restaurants in South Africa, say owners