Commission fee structure of food delivery firms 'needs to evolve' to attract hawkers: Amy Khor

Commission fee structure of food delivery firms 'needs to evolve' to attract hawkers: Amy Khor

lau pa sat during singapore's circuit breaker period (1)
Lau Pa Sat hawker stall operators waiting for customers. (Photo: Jeremy Long)

SINGAPORE: The authorities will work with food delivery companies to see how they can adjust their operating models to better suit hawkers, Senior Minister of State for the Environment and Water Resources Amy Khor said in Parliament on Tuesday (May 5).

"In fact we are already engaging them to see how they can actually adapt their model for the hawker centre context," she said. 

“This will potentially lower costs for the hawkers, not just on the circuit breaker period but beyond."

Dr Khor was responding to questions from Member of Parliament Melvin Yong, who asked about the number of hawkers who have turned to food delivery options and who have tapped support from schemes by Enterprise Singapore and the National Environment Agency (NEA).

Dr Khor recognised that the model for food delivery services, including the commission structures, would "need to evolve" to be attractive to hawkers.

“These models must strike a balance among all parties in the food delivery services ecosystem, including hawker, delivery person and platform operator,” she added.

With dining-in banned as part of COVID-19 "circuit breaker" measures, hawkers and many others in the food and beverage business have increasingly relied on meal delivery services.

There have been concerns about steep commission fees by some delivery platforms, with at least two MPs speaking on the issue recently. 

READ: As COVID-19 hits F&B sector, calls emerge for delivery apps to lower commission fees

In Parliament on Tuesday, Dr Khor noted that there have been ground-up initiatives such as Hawkers United and SG Dabao which have helped hawkers advertise their food for delivery or takeaway.

"There are also smaller operators with newer models that allow users to aggregate orders within a hawker centre and do not impose direct commissions on the hawker food," she said. 

In a supplementary question, Mr Yong said that while Facebook groups like Hawkers United "sound rudimentary", it is a sign that more help needs to be provided to hawkers. He asked if more can be done to support such ground-up initiatives.  

Dr Khor said that the Ministry of Environment and Water Resources (MEWR) will be providing hawkers with an information package that includes a list of the various food delivery platforms and “newer models that allow aggregation of orders within a hawker centre”.

This will give hawkers a better idea of the type of platforms available. 

Some of these operators charge delivery fees to the patrons instead of the businesses, Dr Khor noted. “Some will charge a lower commission, like 10 per cent, and co-fund the delivery charges.” 

“I encourage other established companies to review their business models to see how hawker food delivery can be a complementary and integral part of their broader suite of services.” 

READ: 'It’s about trying until our last breath': New F&B players cook up survival plans for COVID-19 crisis

SOME HAWKERS SUSPEND OPERATIONS

Since the start of circuit breaker, about 20 to 30 per cent of cooked food stallholders have chosen not to operate their stalls, said Dr Khor.

“Some stallholders, particularly those in the central business district, have chosen not to operate their stalls as the office crowd has thinned and business has fallen,” she added.

“Others like older stallholders have also temporarily closed their stalls.” 

This is in spite of support for hawkers in the form of a three-month rental waiver and a one-month subsidy to defray the costs of table-cleaning and centralised dishwashing services by NEA. About 14,000 stallholders are expected to benefit from the rental waiver.

Dr Khor told the House that NEA's one-time assistance of S$500 to help hawkers with the cost of engaging food delivery services will be extended by a month to the end of June.

About 600 applications for the funding have been received as of Apr 27, she added.

"We encourage more hawkers to make full use of this funding to set up an additional revenue stream during this challenging period," said Dr Khor.

She also noted the Food Delivery Booster Package by Enterprise Singapore, which was introduced at the start of the circuit breaker period.

To help lower business costs from delivery and takeaway operations for F&B businesses, Enterprise Singapore will fund five percentage points of the commission cost charged by Deliveroo, foodpanda and GrabFood. 

"But above all, I would like to encourage all Singaporeans to support our hawkers by patronising them," said Dr Khor.

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Source: CNA/ct(gs)

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