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Written reply to PQ on commissions charged by food delivery platforms

Written reply to PQ on commissions charged by food delivery platforms

Question

Mr Darryl David: To ask the Minister for Trade and Industry whether regulations can be made to require food delivery platforms to lower commissions charged to food and beverage establishments every time dining restrictions are tightened as such establishments are suffering losses with dining-in capped at two diners and delivery is an important channel of revenue.

Written Answer by Minister for Trade and Industry Gan Kim Yong

1. Many F&B establishments have adapted to changing consumer preferences and the safe management measures on dining in by making food delivery a regular part of their business operations.

2. Last April, Enterprise Singapore introduced the Food Delivery Booster Package to encourage F&B businesses to offer food delivery services, by defraying commission and delivery costs. To date, more than 10,000 F&B establishments have benefitted from the package. Apart from support for food delivery costs, F&B businesses also received enhanced levels of wage support under the Jobs Support Scheme during periods of tightened restrictions.

3. The food delivery platform market is a relatively competitive one. F&B establishments can choose from a range of food delivery platforms and third-party logistics providers, with different business models and commission fee structures. Some food delivery platforms have, at times, removed onboarding fees or commissions to attract more F&B businesses.

4. Regulating the commission rates of food delivery platforms at this point will not be helpful. The price mechanism reflects the demand and supply of food delivery services. Keeping the commission rates artificially low could result in longer delivery times, reduce earnings for food delivery personnel and inadvertently hurt F&B establishments through reduced business.

5. Nonetheless, I would like to assure the Member that the Competition and Consumer Commission of Singapore will continue to monitor the food delivery sector for any anti-competitive practices.

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