'Tipping is not a great help': Australian restaurants weigh in on the new tipping features from Uber Eats and Deliveroo

Counting tips. Image: Getty
  • Both Deliveroo and Uber Eats rolled out features that let users tip restaurants.
  • The Chapel Street Precinct Association said while the tipping service launched by Deliveroo is something, it isn’t enough to support restaurants.
  • Aditya Bhargav, manager of The Farm Wholefoods, told Business Insider Australia “Tipping is not a great help.”
  • Visit Business Insider Australia’s homepage for more stories.

Food delivery platforms in Australia have added in tipping features to help restaurants through the coronavirus crisis – but the response from restaurant owners has been mixed.

Last week, delivery platform Deliveroo announced a new feature which lets users tip the restaurants they are ordering from, with all the funds going directly to the restaurant. Deliveroo will also match the first 10,000 customer tips, but only up to a quarter of the order value.

Uber Eats also announced a tipping feature. Users can tip restaurants $3, with the delivery giant matching these tips up to a cumulative total of $1 million.

Chrissie Maus, general manager of Melbourne’s Chapel Street Precinct Association (CSPA) told Business Insider Australia via email that tipping features won’t do enough to support restaurants. She also pointed out that tipping isn’t part of Australia’s culture.

“Giving tips is very American and not something Australians are used to,” she said, adding “a tip service is only going to skin the cat of a much larger problem.”

The CSPA represents more than 2000 commercial properties and businesses in Melbourne’s suburbs of South Yarra, Windsor and Prahran.

Maus conceded that the tipping feature was at least something, “be it very small”, to support local hospitality businesses and jobs. “Though we can agree this is something, it’s not much and it’s heavily relying on the customer to make a decision that during these tough times, many people won’t be able to afford – giving that extra tip,” she said.

But what the CSPA wanted to see was delivery companies charging restaurants lower commission fees.

“Businesses have been forced to pivot to home delivery to survive this pandemic period, but were reluctantly using the online delivery platforms which charged sky-high commissions,” she said. “Given the constraints – and the absolute crisis and heartbreaking nature of the street at the moment – we really need the likes of UberEats to at least slash their fees by 50%, if not more, because we’re haemorrhaging cash.”

Maus added that the best thing you can do is to call a restaurant directly and collect your order.

“By ordering directly you will be helping these businesses make it through and retain as many of the wonderful staff you’ve come to know and love.”

Melbourne food writer Dani Valent, who created a petition called for delivery companies like Uber Eats and Deliveroo to slash their fees, told Business Insider Australia by email “anything that supports restaurants is welcome”.

“I think food businesses welcome any avenue that brings in more revenue, especially in this extremely challenging time, so in that sense it’s a good initiative, particularly as Deliveroo is offering to match diner tips up to 25% of the value of any one order.”

However, Valent also mentioned that it doesn’t address the main stress point for restaurants: the commission fee.

“You have to wonder why it should be up to diners to support restaurants with discretionary extra spending when it’s in the power of the delivery companies to improve the bottom line for restaurants in the first instance,” she said.

Restaurants appreciate the tips but want the commissions to be reduced

Aditya Bhargav, manager of The Farm Wholefoods cafe in Potts Point, told Business Insider Australia his business uses both Deliveroo and Uber Eats. He said he has received only a few tips through Uber Eats.

“Tipping is not a great help,” he said. “If you get a tip [it’s] maybe once in three, four days. Like two, three dollars or something.”

He added that a reduction in commission would be more helpful.

Cedric Le Page, owner of Custom Cafe in Brookvale however, was appreciative of the tipping service. He told Business Insider Australia Custom Cafe got its first tip from Uber Eats today and considered it “very kind” of the customer.

“A dollar is better than no dollar really,” he said. “It’s such a nice gesture. We don’t advertise for it, we don’t ask for anything but people still do it. And we think it’s remarkable that Australians do these gestures.”

While Le Page also appreciated Uber Eats removing fees for pickup orders and providing funds for marketing, he also wanted to see a reduction in the platform’s high commission fees.

“For us, the biggest cost in deliveries are the 30-35% of the ticket that we pay out of that – the commission,” he said. He explained that his is able to afford it because it’s run by two owners and one staff member but many other businesses “will not be able to afford it because there’s no spare money for the business”.

“So if any of those delivery platforms would drop their fee down to 20% that would be amazing.”

READ MORE:

  • Deliveroo will allow customers to directly tip restaurants but refuses calls to cut its commission
  • Apps like Menulog are reporting a surge in restaurants signing up for delivery – as a petition circulates demanding platform fees be slashed
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