As restaurants hammered by the Covid-19 lockdown prepare to partially reopen for business, they have been dealt another blow after ever-growing delivery service Uber Eats fended off hopes it would drop its commission rate.

Uber Eats charges between 30-35 per cent on all orders, and with profit margins for food outlets set at around 3-5 per cent, many business owners have been losing money on the service.

A week out from the country leaving lockdown alert level 4, Restaurant Association boss Marisa Bidois revealed that the body had hoped Uber Eats would drop its commission rate.

She also revealed it had called on the Government to enforce a cap on commission rates for all third-party delivery companies.


And she said many restaurants wished they didn't have to use Uber Eats, but due to their marketing power and size of their customer database, many had little choice.

While Prime Minister Jacinda Ardern called on Kiwis to shop and dine local when the nation goes into alert level 3 next week and beyond, the Government was not planning any moves over the commission rate request.

"I would just encourage consumers, all New Zealanders who may be looking forward next week to accessing take-away food ... to look at your favourite local eatery – and I do encourage you to support local businesses – and just look at whether or not they offer delivery directly themselves," Ardern said.

Marisa Bidois, chief executive of the Restaurant Association. Photo / Supplied
Marisa Bidois, chief executive of the Restaurant Association. Photo / Supplied

Uber Eats would be back in action from Tuesday next week in time for lunch-time trade, with contactless delivery the default setting.

Many restaurantuers had hoped a maximum commission rate could be looked at.

In San Francisco, a 15 per cent cap was placed on commissions charged by all food delivery food platforms in the Bay area during Covid-19.

"We are urging the New Zealand Government to place the same restrictions in the New Zealand market to give our Kiwi hospitality businesses a fighting chance of survival," Bidois said.

"We're also calling on Kiwis to support their local restaurants and cafes by jumping on their website or giving them a call with their delivery order."


There were no plans for Uber Eats to change their own commission rate, a spokesperson told the Herald.

As many foot outlets prepared to reopen there was a growing criticism of the charges on social media.

Meanwhile, the majority the Restaurant Association members are uncertain as to whether they will reopen for business during alert level 3.

There were 3600 members of the organisation, which expected one in five businesses to never reopen as a result of the impact from Covid-19.

Ardern announced on Monday the country would leave lockdown and be at level 3 from Tuesday next week.

Due to the impact of Covid-19, 20 per cent of the industry in New Zealand may never reopen. Photo / AP
Due to the impact of Covid-19, 20 per cent of the industry in New Zealand may never reopen. Photo / AP

Restaurant and cafe shopfronts are required to remain closed during alert level 3 but contactless delivery and takeaway purchases are allowed.

The decision provided many in the industry a much-needed lifeline, Bidois said.

However, despite being given the all-clear to reopen - given they get clearance - many in the hospitality industry are unsure whether they will.

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A survey conducted by the Restaurant Association of its members found a whopping 38.89 per cent were not sure if they would reopen.

Meanwhile, there was an even split between people who indicated they would reopen and those who would not in level 3 - 33.33 per cent each.

The reason business owners may have decided to remain closed in level 3 was because they deemed it not worth the effort.

"We're looking at around 20 per cent, one in five, businesses not being open at the end of this, many have been hit hard," Bidois told the Herald.

"Many of them are struggling but many of them are remaining optimistic though as well, which I find absolutely incredible.

"Our businesses are crying out for more assistance, that's the major message we're getting from our industry at the moment."

One way the Association hoped to help was by getting Uber Eats to drop its commission rate for delivering businesses meals.

While Uber Eats wasn't looking at dropping its fees, a new restaurant tipping feature would be introduced on the app once it was live again next week.

The feature had been used in Australia with restaurants receiving more than $500,000 in tips during the first week of the roll-out.

"We understand that this is an incredibly difficult time for the restaurant industry and particularly small business owners," the Uber Eats spokesperson said.

"Our goal at this time is to support restaurants to stay open for business for as long as they can and to continue to capture the demand from customers through pick up and delivery."