There is an article online that is calculating how much the delivery platform are earning. And how much the F&B is paying for this.
How much exactly is the delivery platform earning?
We did a bit of calculation previously when they roll out their GrabFood Pass. And also introducing minimum basket value.
Grab Food Promo Code in Feb 2019
I am a very vivid fan of the delivery platform. Especially when Grabfood first launched. Swee liao la, like when Grab and Uber got war that time.
Big unicorn, burning alot of cash means alot of promo codes. Does the F&B and consumers remember the $1 Grabfood deal time?
The promo code for 40% off etc?
It has now dwindled - if you have free delivery already very good liao. So let’s calculate what is ongoing now.
GrabFood Pass - $9.99 for 50 Deliveries
Previously for GrabFood Pass members that is paying $9.99 for 50 deliveries.
The delivery platform charge 30% to merchants.
Delivery rider gets average $5 per order including incentive.
So assuming an order of $10.
Merchant earns $7.
Rider earns $5
The platform is losing $2
This is when the pmd is so crazily popular. Riders can earn $3000++ or more on good times. And they have their delivery pay + incentive one.
Break-even point
The platform only breaks even when the order is at a minimum of $16
Merchant earns $11.20
Rider earns $5
The platform breaks even.
They have since discontinued the Grabfood plan for new subscribers. And now the CB period, it is their time to bring in some money.
So at a $40 basket value, the platform only earn $7 nia. And to cover the cost of the staff of $2000.
1 Month need 286 of such orders. Imagine how many staffs Grab has.
If you are not on any plan.
The delivery platform charge 30% to merchants.
And charges an average of $3 - $5 to consumers.
Delivery rider gets average $5 per order.
So assuming an order of $10, the consumer pays $14.
Merchant earns $7
Rider earns $5
The platform earns $2.
So for every basket value of $10 + $4 delivery fee, the platform earns $2.
In this model, everyone gets to earn. Merchant earns “marketing” on their platform for a cost of 30% including delivery.
Rider earns, the platform earns, everyone earns
If the merchant is upset with the 30% 'marketing and delivery' fee, then don't participate.
This model is working because the consumer wants convenience. And the platform lowers their commission to 25%, that is a 20% revenue loss.
Eating out is working because people want convenience too. Lazy to cook la, etc.
So now who will bear the 20%? The rider or consumer or platform or all together?
(Heng Govt say they will bear the 5% comms, but the Govt money also tax payer money leh)
The income too low, the rider don't wanna do. The food doesn’t get delivered. Merchant not paid. Consumers start to look for alternatives, Food delivery platform pang kang.
The balance needs to be there
Who help you market your food business? Who deliver your food for you?
You might as well encourage us to cook ourselves. Buy from supermarket better? Or grow our own rice and vegetable?
We are willing to pay a slight premium for convenience. Food delivery platform exists for the same reason. Last time can only order Mcd or KFC. Now so many options liao. Laksa also can!
Same like why eateries exist. Because we can't cook. Same like why you use Food Delivery platform, because you cannot do delivery.
ps: You all dont’ quarrel already okay? I need go dabao my cai png already. Because Cai Png uncle no use Grabfood.
And remember to bring your own container.
