Restaurants demand takeaway platform fee regulations

The rise of food delivery platforms in Macau has created a new set of challenges for local restaurants. Several of the city’s industry associations are now calling for new regulations to address the exorbitant service fees charged by these delivery platforms.

According to Fong Kin Fu, a representative of the Macau Restaurant Owners Association, restaurants are currently paying 20-40% of their order profits to partnered delivery platforms. These fees, they argue, are excessive and lack transparent and reasonable calculation.

“There are no clear provisions on the charging standards of the platforms, and restaurant traders have to rely on takeaway platforms for food delivery to grow their business,” Fong explained, as cited in a Jornal Cidadão report.

The deputy director of the association emphasized the urgent need for legislation to regulate the sector. He stressed the importance of transparency in commission calculations and the necessity of justifying the reasonableness of these charges. Striking a balance between costs and profits for both platforms and restaurants is crucial for sustainable service operations.

In addition to the 20% commission on each order, restaurants must also pay the platforms entry fees, delivery fees, advertising fees, and costs for promotions, resulting in actual costs reaching 30-40% of the order value, according to Chan Peng Peng, vice-president of the People’s Alliance of Macau.

“Given that there is no legal regulation of the take-away market in Macau, traders have less influence in the food chain. In other words, given the growing demand for home delivery of food by locals, delivery service is one of the most important ways for Small and Medium Enterprises (SMEs) to expand their business, and traders hardly have any other option but to join the platforms,” Chan lamented.

The president of the Macau Restaurant Industry Association, Lei Iam Leong, agreed that SMEs are in a passive position, with delivery platforms creating a new type of monopoly as an important bridge between consumers and restaurants.

The associations are calling for new legislation to monitor the operation of food delivery platforms, establish reasonable commission rates, and create a quality management system for delivery services and after-sales support.

Without legislation, “platforms can increase commissions whenever they want, and traders can only accept them passively,” stressed a People’s Alliance of Macau spokesperson. The industry is hopeful the government will take action to address these concerns and create a more equitable environment for local restaurants. Victoria Chan