DIT chews on regulations to lower food delivery service fees

After pressure from the Department of Internal Trade, food delivery services in Thailand will lower their rates to aid struggling food vendors during Covid-19. Restaurants have been complaining about the high commissions that food delivery services like Food Panda, Gojek, Grab, and Line Man charge restaurants, typically taking a 30% bite out of profits. The DIT has requested that food delivery services lower their slice of the pie to 15%.

When Covid-19 first swept the world, many countries including Thailand went into lockdown. Restaurants were closed, dining in was forbidden. Often restaurants were kept afloat by the increased online ordering from people staying home to avoid Covid-19, and for many restaurants, food delivery services became their bread and butter. But as the pandemic months stretch on and the economy and tourism are still flat as a pancake, restaurants are in a pickle struggling to survive when so many of their orders are via costly delivery services.

It is rumoured that the DIT is pushing for a regulating law that sets a cap on the commission these food delivery services can charge, but last month they called a meeting with the companies to butter them up into voluntarily lowering their rates. A California law that limits online food delivery commissions to a maximum of 15% during Covid-19 was served up as food for thought.

Gojek has agreed to discount rates, but at a rate that might be small potatoes compared to the DIT’s 15% request. They are allowing food vendors to either receive a 5% discount on fees or pass it along as a saving to their customers to sweeten the deal and boost sales. The special runs for the whole month of June and Gojeck are offering 15-20% discounts on orders for vendors who register before May 30.

Line Man food delivery service has offered the same 5% discount, but only for food vendors in Bangkok, Nontha Buri, Pathum Thani, and Samut Prakan who sign up by June 1. Grab Thailand, whose food delivery services have become a gravy train while rideshares are down due to the pandemic, also announced plans to work with the DIT to make a similar discount program in June for local merchants paying over 25% commission.

While none of the food delivery vendors matched the DIT’s 15% discount request, the small crumbs of 5% discounts can still help small food vendors bring home the bacon, at least until official regulations are drafted and implemented.

SOURCE: Bangkok Times