Getting onto food delivery platforms eats into already-thin profit margins, say hawkers

The commission cost can be about 30 per cent of a total food order.
The commission cost can be about 30 per cent of a total food order.ST PHOTO: KELVIN CHNG

SINGAPORE - Food delivery platforms may not be the easy answer to solve the current woes faced by hawkers amid the Covid-19 pandemic.

Many are worried that the costs of hopping onto food delivery platforms would eat into their already-thin profit margins.

Onboarding charges and commission fees could force them to choose between keeping their food affordable and marking up prices to tide over tightened restrictions, hawkers told The Straits Times. The commission cost can be about 30 per cent of a total food order.

But the Government will be giving more help to get hawkers onto delivery platforms.

Minister of State for Communications and Information and National Development Tan Kiat How has been tasked with helping hawkers get onto these platforms.

Senior Minister of State for Sustainability and the Environment Amy Khor will work with him to recruit partners.

So far, the Government has been offering incentives for hawkers to adopt food delivery services. For instance, more than 1,300 hawkers have taken up the National Environment Agency's one-time grant of $500 to do so.

Some food delivery firms are also chipping in during this period of heightened alert.

Foodpanda has waived its onboarding fee for new vendors, as well as commission on delivery orders from hawkers operating in NEA-managed centres.

Grab too, is extending full commission rebates on food orders to its partners in hawker centres managed by the NEA and town councils.

Yet hawkers here are concerned about the sustainability of help schemes.

Mr Lee Syafiq, owner of burger chain Ashes Burnnit, said around 60 per cent of his customers now order through delivery platforms, up from 30 per cent previously.

However, even the increase in delivery orders cannot make up for the drop in walk-ins across his three outlets. "This presents a huge loss to us hawkers, as our revenue still mainly comes in from the walk-in crowd," he said.

Mr Sherwin Lim, who co-owns hot-plate and western grill hawker stall Daburu at Pasir Ris Central Hawker Centre, believes government subsidies may not help in the long run, as commission rates are still high. The stall is on Deliveroo.

Mr Lim, 32, said: "If the intent is to help hawkers, perhaps we can tilt the scale a little and explore models where, for example, there is greatly reduced or no commission charged to hawkers, or other stakeholders such as consumers pay slightly more."

He also suggested enabling group buys where customers order large quantities so the volume makes up for low margins.

Hawker champions said that unlike restaurants, hawkers have thin profit margins.

Mr Melvin Chew, 43, founder of Facebook group Hawkers United - Dabao 2020, said after paying off the commission and other costs, hawkers could earn as little as 50 cents for a $3 to $4 dish.

"If you mark up the price, then it is up to the customers on whether they still want to support you," said Mr Chew, who runs Jin Ji Teochew Braised Duck & Kway Chap stall in Chinatown Complex Food Centre.

Mr K.F. Seetoh, founder of food guide Makansutra, said hawkers would be selling at a loss if they considered all these costs.

"As the whole of Singapore is being herded to go digital, there are people like hawkers and small retailers who cannot go digital for reasons such as viability, and they will be left behind," said Mr Seetoh, adding that one-off grants will not help much because the problem will persist.

He, too, suggested that the Government work with the community to organise group buys that would benefit both consumers and hawkers.

Meanwhile, some hawkers here are still drawing a strong crowd during mealtimes and are reluctant to get on food delivery platforms.

The Hong Kong Soya Sauce Chicken Noodle Rice stall at Beauty World Food Centre, for instance, is not on any delivery platform.

"We won't be able to cope if we do delivery too. We don't want customers to wait," said stall owner Annie Cheong, 69.

The popular Mizzy Corner Nasi Lemak, which has two stalls at Changi Village and Tampines, still sees steady queues. It only uses online ordering system Oddle because of the significantly lower charges.

The stall's second-generation co-owner Iskandar Abu Nazir, 31, believes hawkers have less leeway to adjust prices upwards.

"If the price is not right, customers would turn to other options," he said. "We can't charge them too high for hawker food."

Customers interviewed are willing to pay more for the convenience of having hawker fare delivered. When asked how much more, most gave the range of between $2 and $4.

"If the difference is small, I don't not mind," said administrative manager Gordon Sim, 33, who orders food online five times a week. "But I wouldn't pay $10 for a plate of chicken rice. It just isn't wallet-friendly for hawker fare."

Where to order food from

KopiRun app

People on a coffee or grocery run can organise a group buy on an app, so that others can add in their orders for a delivery fee.

WhyQ app

A food delivery service app that offers delivery of hawker food at a low price.

Users can also place orders from multiple stalls at the same hawker centre.

Help Our Hawkers Map

To support hawkers who are digitally disadvantaged, such as those who are elderly or illiterate, a list of over 200 hawker stalls on a Google map has been created by users on Reddit.

This can help people who want to support digitally disadvantaged hawkers located near them.

People can also contribute new stalls to the map.

Go to this link

Bungkus SG

A delivery platform for food establishments that are halal-certified or 100 per cent Muslim-owned. The initiative was started to support the Muslim community, as many of their favourite restaurants did not previously offer islandwide delivery.

Deliveries are from 9.30am to 9.30pm, with a minimum order of $7.

Instagram account @wheretodapao

An Instagram page is dedicated to raising awareness of food stalls run by elderly hawkers, to give their business a boost amid phase two (heightened alert), which began on May 16.

Each post features a hawker stall with a description of the stall owners and the type of food that they sell.

Some posts are contributed by fans of the stalls.