Just Eat tightens squeeze on restaurants with Europe-wide commission increase
I’ve worked in the technology sector my entire career. The way technology can level the playing field and create opportunities for the little guys inspires me every single day.
That’s why we created Flipdish: to help restaurants – no matter their size – compete with the food giants with million-dollar budgets.
But the little guys are currently facing a barrage of challenges. VAT rises, talent shortages and soaring inflation. That’s why I was disappointed to see that, at a time when things are already hard for small businesses, a food delivery aggregator has increased its commission rate in Europe by 1%.
Especially when the big industry players take as much as a 30% cut of total commission from restaurants that use their platforms already. Whilst big chains and larger restaurants might be able to foot this bill, for smaller restaurants it can price them out of the competition.
1% might not sound like a huge increase, but for thousands of small restaurants across Europe – and the many thousands they employ - it can be make-or-break. Most have a buffer zone of just 5% between when it comes to either making profit or recording a loss.
These numbers on paper have a very real impact. We’re hearing about the ongoing woes faced by small restaurants emerging from the pandemic, and our UK survey from April of this year found the financial squeeze had caused a rise in mental health issues for restaurant owners across the country, and we know it’s not confined just to one country.
We must also remember that for many of these restaurants, the impact of the pandemic is still being keenly felt - and these hiked commission percentages by JustEat, during a time of recovery, won’t help.
In contrast, it hasn’t been so bad for the online food delivery giants. Our research found that across the markets of Ireland, Spain, and France alone, big food delivery platforms took home an estimated £9 billion in revenue during an 18-month period between Q2 2020 and Q3 2021. Some might say an additional 1% in commissions is designed to further line the pocket of shareholders, rather than support the businesses making them profitable in the first place.
At Flipdish, we believe the future for restaurants is one where they don’t need to worry about commission rates and instead can instead focus on building sustainable, long-term relationships with customers. For any restaurants looking to make a change to the way they do business, we offer a not-for-profit directory, StraightFrom.com, to customers and non-customers alike to provide an alternative and support in encouraging customers to order directly from local restaurants.