Some eateries charging more for meal deliveries

Delivery service providers said that menu prices are not under their purview, and that the commissions they charge restaurants are necessary to cover costs.
Delivery service providers said that menu prices are not under their purview, and that the commissions they charge restaurants are necessary to cover costs.PHOTO: REUTERS

They need to cover cost of packaging and commission to delivery firms, some say

Ordering in for dinner? You could be paying more than you bargained for.

Some restaurants are charging higher prices for menu items on delivery service platforms such as Deliveroo and Foodpanda, with increases varying from 20 cents to several dollars.

A Straits Times check of 50 restaurants found nine that had higher menu prices on these platforms compared to in-house menus.

Among them are major chains Crystal Jade Kitchen, Crystal Jade La Mian Xiao Long Bao, Nando's and NamNam Noodle Bar.

Rochor Thai, NamNam Noodle Bar and Verve Pizza said the mark-ups were necessary to cover packaging and commissions paid to the delivery services, which are as high as 37 per cent per order.

Rochor Thai, which is partnered with Deliveroo, Foodpanda and UberEats, charges an extra 20 cents for deliveries.

NamNam's four outlets on Deliveroo include mark-ups ranging from an average of $1.50 to $10.90 for one of its pho items.

Verve Pizza, which has three outlets - in Clarke Quay, Bukit Merah and Marina Bay - switched from doing its own delivery to partnering with Deliveroo a month ago, said Ms Karen Coldman, director and owner of parent company Verve Holdings.

While some of its thin-crust pizzas are costlier by up to $2 to cover extra costs, "entry-level pizzas" are kept low to attract new customers.

"We are competitively priced, and one of the cheaper ones out there," said Ms Coldman, 39.

Crystal Jade and Nando's declined to comment when queried on the price discrepancies.

PS Cafe, which was one of the earliest to sign on with Deliveroo when it launched here last year, does not mark up prices for deliveries.

Said the group's director of operations, Mr Michael Di Palma: "Overheads are a lot less for deliveries compared with dine-in guests, and we've always done takeaway so that cost has been built in for a long time."

Its eight cafes and Chop Suey outlets fulfil about 1,000 orders a week through Deliveroo.

Delivery service providers said that menu prices are not under their purview, and that the commissions they charge restaurants are necessary to cover costs.

UberEats said restaurants retain the bulk of what they charge customers for their menu items.

Said a spokesman for Deliveroo, which has over 2,000 restaurant partners in Singapore: "The overwhelming majority of our restaurant partners offer the same prices on Deliveroo as they do in their restaurants, and we strongly encourage them to do so.

"In a few exceptional cases, some restaurants decide to marginally increase prices to make up for the customary service charge that is added to the bill for on-site consumption."

To avoid confusion for customers, Foodpanda said it is updating all prices on its platform to include GST and will absorb the GST for its deliveries.

This will bring it in line with competitors Deliveroo and UberEats, which include GST charges in menu items and exclude the $3 delivery fee from GST.

Singapore Polytechnic marketing and retail lecturer Amos Tan said that with the increasing popularity and accessibility of food delivery services, restaurants must be careful not to damage their brands with inconsistent pricing.

"From a consumer's point of view, whatever deal a restaurant has with a service provider is not relevant to me. If they are going to charge more, they'd better give me back in value, such as with vouchers."

While the issue does not appear to be widespread, "if it escalates, not only will brands suffer, but service providers may lose the trust of customers", said Mr Tan.

Art therapist Caitlyn Sarkar, who orders from Deliveroo and Foodpanda at least once a week, said she was surprised to learn of the price difference.

"I don't mind paying the delivery fee, but if restaurants want to pass on costs to customers, they should be upfront because consumers assume they're paying the same price as in the restaurant," said Ms Sarkar, 33.

She said: "If it's hidden, it's kind of tricking customers."

A version of this article appeared in the print edition of The Straits Times on December 05, 2016, with the headline 'Some eateries charging more for meal deliveries'. Print Edition | Subscribe