Khan warns Deliveroo over treating restaurants fairly

Mayor of London Sadiq Khan has written to Deliveroo amid claims the delivery company is over charging small restaurants groups.

Khan called on Deliveroo CEO Will Shu to provide “clarity on how you determine the commission rates for businesses that sign up to Deliveroo”, Sky News reports. 

He wrote: “It is important that independent businesses are treated fairly, particularly at the current time when they are vulnerable, and many depend on your services to survive.”

The intervention comes amid complaints that small restaurants are paying significantly more in commission than their larger branded counter parts, who can negotiate better rates due to their higher volumes.

Sky reports they believe in some cases, chains are paying half the amount paid by those on the highest commission rates of 35%.

The issue has come into focus as restaurants became increasingly reliant on delivery for survival during pandemic, with this expected to continue into autumn and winter amid the threat of further lockdowns.

The owners of Maidenhead trattoria Bianco Nero told Sky at 35% commission plus VAT, there was barely any point in being on the platform, so slender were the returns.

Neither Deliveroo nor City Hall would confirm if Shu had replied to Khan’s letter.

A spokesperson for the mayor said Khan “recognises the important role Deliveroo has played in supporting London’s hospitality sector through the challenges posed by the COVID-19 lockdown and the clarity it has provided around its commission model”.

A Deliveroo spokesperson said the company was founded on a “love for small, independent restaurants and our absolute priority is supporting their businesses, especially during covid-19”.

The statement added: “Throughout the covid crisis we have invested millions in our restaurant partners, helping them increase their sales and producing new tools to support both their dine-in and delivery businesses.

“Deliveroo charges different levels of commission depending on each individual arrangement with a restaurant partner. This is then reinvested back into our business, paying for riders’ fees, customer services and upgrading our services for restaurants.”