Regulations for F&B Establishments to be Charged Less by Food Delivery Platforms to Cope with Reduced Dine-in Business
Ministry of Trade and IndustrySpeakers
Summary
This question concerns whether regulations can be made to require food delivery platforms to lower commission rates for food and beverage establishments during periods of tightened dining restrictions. Mr Darryl David raised this inquiry as delivery is a vital revenue channel for businesses suffering losses due to caps on dining-in. Minister Gan Kim Yong responded that regulating commissions would be unhelpful as artificially low rates could lead to longer delivery times and reduced earnings for delivery personnel. He highlighted existing government support such as the Food Delivery Booster Package and Jobs Support Scheme, while noting that the food delivery market remains competitive. Finally, he assured that the Competition and Consumer Commission of Singapore will continue to monitor the sector for anti-competitive practices to protect the interests of all stakeholders.
Transcript
95 Mr Darryl David asked 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.
Mr Gan Kim Yong: 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.
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 benefited 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.
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.
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.
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.