Australia markets closed

Deliveroo will allow customers to directly tip restaurants but refuses calls to cut its commission

Sharon Masige

Deliveroo has announced more measures to support restaurants struggling during the coronavirus pandemic.

The delivery platform is launching a new feature from next week where users can choose to add a tip to their bill. The funds will go straight to the restaurants and won't be subject to any commission.

"Many Australians in the food and hospitality industry have been hurt by the COVID-19 crisis and our focus is on how best we can support our restaurant partners to adapt quickly during this time," Deliveroo Australia CEO Ed McManus said in a statement.

Deliveroo will also match the first 10,000 customer tips, which will also go restaurants, but there's a catch. The delivery giant will only match up to a quarter of the order value. If you order $12 worth of food, for example, Deliveroo won't match your tip past the $3 mark.

It comes after the government ordered the shutdown of restaurants – save for delivery and takeaway – to prevent the spread of the coronavirus. Restaurants have been pivoting to delivery, with Deliveroo pointing out more than 2,000 restaurants have joined the platform.

In addition to the tipping feature, Deliveroo has also created a free guidebook to help restaurants switch to delivery and takeout. The guidebook has financial resources and best practice advice for delivery and social media techniques. Restaurants can also opt to be paid daily, instead of weekly, with Deliveroo covering the increased banking charges for faster payments.

Melbourne burger chain Royal Stacks founder Dani Zeini said in a statement the new measures are a "great way" to help the hospitality industry.

"I'm so grateful to our customers who are helping us keep going and this tipping functionality is a useful way for them to show their support," Zeini said. "The guide has already helped us build a better understanding of how to engage with our customers and understand the tools and resources that are available to help me keep my team employed and get through this time."

However, the measures won't go far enough for some restaurant owners who would prefer food delivery apps simply cut down their 30% commission fees.

"These are incredibly difficult times for restaurants and cafes,” Melbourne food writer Dani Valent told Business Insider Australia in March, after starting a petition demanding just that.

"But it is a time when delivery is likely to play a very important role for not only people who are stuck at home but also for businesses who aren’t able to have perhaps any or as many customers in their venues."

Deliveroo has however defended its commission, indicating it is largely used to pay delivery riders and would not be reduced.

"The commission rate is scaled according to the degree of service and support that Deliveroo provides its restaurant partners for each order type," a company spokesperson Business Insider Australia.

In lieu of a lower commission, restaurants look like they will just have to take what they can get.

Uber Eats is also launching a tipping feature

Uber is also launching a new feature on its Uber Eats app that lets users tip restaurants. The tipping amount is $3, with Uber matching each tip up to $1 million.

"Uber Eats is making up to a million dollars available as part of a tipping pool to match individual tips for restaurant staff, dollar for dollar," an Uber Eats spokesperson said in a statement. "For every $3 tipped Uber Eats will pass on $6 to the restaurant."

READ MORE:

Nearly 1,700 new restaurants have signed up for Deliveroo in the last month, as coronavirus restrictions lead more businesses to shut their doors

Apps like Menulog are reporting a surge in restaurants signing up for delivery – as a petition circulates demanding platform fees be slashed

Struggling Aussie restaurants and cafes pivoted to groceries to survive the coronavirus outbreak. Then Deliveroo 'ate their lunch'.

Uber Eats is starting a $5 million fund for Australian restaurants so they can continue to deliver food through the coronavirus crisis