Uber has defended the controversial high commissions it charges to restaurants using its Uber Eats platform, saying the company helps to drive business back to the restaurants via marketing and other support.
Speaking as part of The Australian Financial Review‘s Future Briefing on Tuesday, Uber community operations director for Australia and New Zealand and North Asia, Mark Capps, indicated that there were no plans to further lower its 30 per cent commission rate, having dropped it by 5 percentage points earlier this year.
Mr Capps, who has worked for Uber for 5½ years, said delivery services like Uber Eats had been critical in enabling hard-hit restaurants to continue trading through the COVID-19 pandemic.
“We’re always working with restaurants in partnership to make sure that the money we take from them we’re using to invest in making that business successful,” he said.
“We use the money from the service fee … to help support reliable delivery and to make sure we have safe and reliable delivery available for all our food.
“It’s also to make sure that we’re marketing the services as widely as possible to drive demand through the crisis. We took steps to ensure we supported our restaurant partners, for example … reducing the commission fee to zero on orders that are picked up in-store.”
The comments from Mr Capps came after restaurants across Australia united in speaking out against food delivery platforms like Uber Eats and Deliveroo earlier this year for charging such high commissions.
Even with the reduced commission, restaurants like Abacus Bar & Kitchen in Melbourne’s Chapel Street have previously told the Financial Review they still lost money on orders made through Uber Eats.
Deliveries offset rideshare falls
But despite Uber Eats taking a 30 per cent cut of orders, a growing number of restaurants have had to rely on it during the pandemic.
At the height of the COVID-19 restrictions globally, Mr Capps said its rides business fell by about 70 per cent, but this was partially offset by a huge take-up of its food delivery service.
“Research shows that prior to COVID, food delivery apps accounted for only 5 per cent or 6 per cent of a restaurant’s trade,” Mr Capps said.
“At the height of the COVID restrictions this became almost 100 per cent for some restaurants.”
Locally, the biggest drop-off in Uber rides occurred following an in-app Uber notification on March 20, asking Australians to socially distance. That weekend, trips fell 50 per cent on the weekend before.
When cases began to rise in Melbourne as part of the second wave, Mr Capps said Uber data showed more Sydneysiders opted to stay home, taking it upon themselves to isolate.
Throughout the pandemic the company has accelerated the rollout of various product development initiatives, including introducing an option for people to send goods to each other via Uber, and formed partnerships with the likes of Dettol to provide hand sanitiser and disinfectants to drivers at no cost.
But while it forced the company to accelerate its product road map in some areas, the pandemic has also caused delays to other projects, including its ambitious Uber Air program.
Melbourne has been chosen as the first city outside of the US for trials of Uber’s flying vehicles as part of Uber Air, but the timeline on when these trials (which were slated for 2023) will occur now looks uncertain.
Because Uber does not own the vehicles being manufactured, Mr Capps said it was hamstrung by manufacturing slowdowns being experienced by its partners including Aurora Flight Sciences (a subsidiary of Boeing), Pipistrel Aircraft and Embraer.
“We have seen those timelines changing. We’ll see the first demonstrations of Uber Air flights in the US over the coming years and of course … [we’re] committed to Melbourne being the first city outside of the US to see that service over time,” he said.
“Safety is absolutely table stakes for Uber, so when we look at this that’ll be the absolute first priority.”
This story originally appeared in the Australian Financial Review. Read the original story here.
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