Honestbee to stop food delivery in Singapore, suspend laundry service from May 20; 400 riders affected

The headcount of Honestbee employees in Singapore will not be affected.
The headcount of Honestbee employees in Singapore will not be affected.ST PHOTO: KELVIN CHNG

SINGAPORE - Troubled grocery and delivery start-up Honestbee will be ceasing its food delivery service here as part of the firm’s ongoing strategic review, it announced on Wednesday (May 15).

Its food delivery arm, which has about 1,200 restaurant partners, will stop on Monday, while its laundry service will also be temporarily suspended, Honestbee said in a statement. 

Its food Takeaway service, launched in February to allow users of the Honestbee app to order from partner restaurants for self-collection, will also be shut.

Honestbee announced last month that it would be suspending some of its overseas operations and cutting about 10 per cent of its global headcount amid reports that it was facing financial trouble and looking to sell.

It said it would be stopping its services in Hong Kong and Indonesia, and its food business in Thailand, as well as temporarily suspending its operations in Japan and the Philippines, though it had indicated that Singapore operations would not be affected.

Honestbee’s chief executive and co-founder Joel Sng resigned from the company earlier this month, while Mr Brian Koo, whose family controls electronics giant LG, has taken the reins.

Earlier on Wednesday morning, The Business Times reported that investors were approached earlier this month about raising at least $20 million for Honestbee, and that before its leadership transition, it has eyed growth avenues including finance and insurance partnerships.

In its latest statement on Wednesday, Honestbee said about 400 delivery riders, many of whom are part-timers, will be affected by the closure of its food delivery service and suspension of its laundry service, and the firm is committed to assisting them.

“The decision was made to optimise the business structure, and to drive better focus and alignment with Honestbee’s current strategic priorities,” the statement said.

It will meanwhile continue to operate its grocery delivery service and its cashless and automated supermarket called habitat, which was opened in October last year.

The firm’s headcount in Singapore will also remain unaffected, it said.

 

Experts have pointed to habitat, which occupies 60,000 sq ft in an industrial building in Pasir Panjang, as a way for Honestbee to grow its profits. 

Honestbee employees were reportedly told at a town hall last month that habitat was profitable.

“The newly appointed executive team is working on future plans to stay relevant and sustainable in today’s rapidly changing business environment. This will help to put Honestbee in the best possible position to support the business in Singapore and other geographies going forward,” the statement said.

According to an e-mail to delivery riders seen by The Straits Times, Honestbee said no food delivery slots will be released from this week onward, and that riders will receive payment according to the regular payout schedule. 

Deposits for delivery bags will also be refunded following their return, the e-mail said.

Underutilisation of Honestbee’s food delivery service, which faces stiff competition from the likes of Deliveroo, Foodpanda and GrabFood, may be behind its demise.

Honestbee food delivery rider Glenc Soh, 20, said he was not surprised to hear the news.

The amount of orders had “dropped very drastically” over the last year, he said.

During an average five-hour evening shift, for example, the number or orders he fulfilled dropped from about 12 to two. 

While he is still a registered Honestbee rider, he has since switched to making deliveries for Deliveroo.

“I’ve seen more and more of my Honestbee colleagues changing to GrabFood and Deliveroo... Some merchants also told me that they would sometimes get only one or two orders a week from Honestbee,” he said.