Source : THE AGE NEWS
It was 2023 when a pair of Melbourne-based restaurant owners had an ambitious idea. After lockdown restrictions had sent food delivery to all-time highs, the duo wanted to create an independent delivery service that would be free for restaurants to use.
Less than two years later, the mission of Delivery Angel has been laid to rest. A co-founder of Melbourne’s Etto Pasta Bar, David Ansett, and the managing director of Vietnamese street food group Misschu, Gabi Machado, decided to wind the company down this month.
David Ansett co-founded Delivery Angel in 2023.Credit: Eddie Jim
They cited high costs, low order numbers and limited interest from other restaurants. “[We couldn’t] get any volume of customers to use our app, even though our app was cheaper for the customer and paid drivers better,” Ansett said.
“But people are addicted to those big platforms and the choice in those marketplaces.”
Australians are getting more food delivered than ever. The number of delivery drivers has almost doubled over the past decade, data from KPMG shows, with more than 86,000 people employed in such roles in 2024. The number of fast-food cooks and chefs has also grown, though waiter and club manager numbers have dipped.
Such changes, which reveal some strong growth in back-of-house roles, also indicate that customers are increasingly opting for online delivery, says Terry Rawnsley, an urban economist at KPMG. “The waiters are dropping off a bit, which reinforces that … there are more deliveries,” he said.
Major delivery providers, such as UberEats, Door Dash and Menulog, attract customers with their wide restaurant selection and large network of drivers. But their fees lower the profits earned by restaurants.
In Australia, UberEats and Door Dash charge restaurants a 30 per cent commission, while Menulog’s share is a calculated percentage that differs for each business. There are generally discounts if a restaurant has its own courier or selects a pickup-only service.
A recent report by Uber found 96 per cent of surveyed restaurants had experienced greater revenue over the past year. “Online food delivery brings new opportunities and value to small businesses, workers and consumers in connected communities,” an Uber spokesperson said.
But Ansett said the current commission percentages mean the success of the delivery industry isn’t always translating into income for restaurants.
“It’s kind of a double-edged sword,” Ansett said.
“More than half of the customers who used to go to restaurants now order delivery, that’s what they want to do … [But] how do we keep our costs down to the bare minimum to be able to afford to pay a commission?”
John Hart, national president of the Restaurant and Catering Association, said an independent platform such as Delivery Angel would struggle to survive in the current hospitality climate.
“This isn’t a service that the restaurants can afford to operate themselves,” Hart said. “They don’t have the scale, in most cases, to have their own delivery drivers and their own systems for reaching consumers. So it’s far better that they use a specialist provider of those services.”
‘It’s an industry that’s in the sort of distress I’ve never come across before.’
Etto Pasta Bar co-founder David Ansett
Australia’s food delivery industry is a notoriously difficult market to enter. Deliveroo endured years of losses before closing in late 2022, and Foodora exited in 2018 amid legal difficulties relating to the rights of workers.
Hart said that while there was pushback and “some grumbles” from restaurant operators about commission costs, the benefits of partnering with specialist delivery companies outweighed the disadvantages.
“It’s giving restaurants what they need, which is volume, turnover and scale,” he said. “The delivery operators take out the cost of performing that task, [and] they’re being rewarded for that in terms of the fees.”
Food delivery continues to be a major part of Australian hospitality. Uber Eats alone estimates it had reached 88 per cent of the population in 2024.
With no sign of lower commission fees in sight, Ansett is concerned about the viability of many businesses moving forward.
“The basic model of restaurants just doesn’t make sense any more,” he said. “For a lot of restaurants, I’m just not sure how they manage that.
“It’s an industry that’s in the sort of distress I’ve never come across before … we’re seeing a significant number going out of business. Really good operators who do really good food and just can’t make the numbers work any more.”
With Jessica Yun
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