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UberEats delivers in all of New Zealand’s major cities, most recently launching in Hamilton this week (supplied)
UberEats delivers in all of New Zealand’s major cities, most recently launching in Hamilton this week (supplied)

KaiSeptember 3, 2019

‘Not a level playing field’: NZ restaurants speak out on Uber Eats

UberEats delivers in all of New Zealand’s major cities, most recently launching in Hamilton this week (supplied)
UberEats delivers in all of New Zealand’s major cities, most recently launching in Hamilton this week (supplied)

Small businesses have told The Spinoff that hefty commission fees from the global delivery giant are pushing them to the brink, and are asking why global fast food chains get a discount.

Small hospitality businesses are paying substantially higher commission rates to Uber Eats than fast food giants using the food-delivery app, and some say it’s threatening their survival. 

The standard commission rate New Zealand businesses pay to Uber Eats per order is 35%, but large international companies like McDonald’s, which are able to use the negotiating power of their scale, are thought to pay closer to 20%.

Some local businesses have managed to negotiate a rate lower than 35%. Better Burger, which has four Auckland outlets on Uber Eats, confirmed it had done so, as did Hell Pizza, which has dozens of stores nationwide. But other multiple-site businesses said their requests to negotiate had been rejected.

Tina Nguyen, co-owner of Wellington Vietnamese restaurant business Where’s Charlie, has four stores on Uber Eats but still pays 35% commission per order. “After we opened the second and third stores, I asked them if they would do us a deal since we have a few restaurants with them, and they said no, that’s a standard percentage and no one else gets any different.”

The Spinoff has sought clarification from Uber on whether they offer different rates to different businesses. 

Nguyen said Where’s Charlie paid a $500 startup fee when each of its sites joined Uber Eats, including $160 each time for photography that happened only once. “I said to them obviously the photography was only done for one restaurant – we use the same menu for all the stores, so technically we shouldn’t be charged for photography for the other stores, but they charged us anyway.”

A screenshot from Uber Eats

Joel Stirling recently closed the Ponsonby branch of his business Poke Bar after dine-in customers dried up. With 80% of orders coming through Uber Eats, and 30% of the cost of each of those going to the app, it wasn’t sustainable to stay open, Stirling told the NZ Herald

Stirling, whose three other Auckland stores are still on Uber Eats but are able to survive through substantial in-store business, pays 30% rather than 35% because he was a launch partner, signing up when Uber Eats first arrived in New Zealand in 2017.

“We were one of the first to jump on board during the trial period,” he said. “They wanted 35% and we said there’s no point for 35, we’ll do it for 30. Then they said they wanted to put it up to 35 after 12 months and we said we’ll leave, so they kept it at 30. Even at 30 you’re not making any money.”

Since then he has attempted to negotiate the rate down, but to no avail. “We explained to them that we needed a better rate for Ponsonby or we’re closing down, because it’s not sustainable. When you’re too busy on Uber Eats you need to hire more staff, so it’s sort of a catch 22.

“They just said oh well, there’s nothing they can do about it. They’ve always said from the beginning that everyone’s on the same rate, but they’re not.”

Stirling says he’s spoken to the managers of neighbouring businesses – his remaining three Poke Bar sites are on Queen Street and in the Sylvia Park and Westfield Albany malls – who were happy to reveal the rates they paid to Uber Eats. He says he’s been told that Subway pays 25% and McDonald’s 20%.

“It’s just not a level playing field,” said Stirling. “It makes it hard for the average Joe.”

As Coco’s Cantina did in July, Stirling is considering opening a “ghost restaurant” that exists solely on Uber Eats to cover the orders the Ponsonby Poke Bar was catering to. 

Neither McDonald’s nor Subway would confirm the rates they paid to Uber Eats per order, with both saying it was commercially sensitive. Both Hell Pizza and Better Burger confirmed they had negotiated discounts, with Ben Cumming, Hell’s general manager, saying, “Hell does enjoy a slight reduction on the fee due to our volume through the platform. We are satisfied with the agreement we have with Uber.” 

Josh Harre, Better Burger’s operations manager, confirmed the business had negotiated a lower rate through “a lot of work”, but wouldn’t give specifics.

“Ultimately the future of Uber commissions is going to be how we tailor negotiating with them,” he said.

Harre believes Uber essentially having a monopoly on the delivery market is problematic. Earlier this year, Uber Eats cut its standard commission rate from 35% to 30% in the UK in response to competition from other delivery apps, but while other services do exist in New Zealand, they don’t attract anything approaching the “eye traffic” that Uber Eats does. 

I think what Uber really needs to do is take responsibility for the fact that they’ve created a marketplace that is leveraging off brands that are already running small margins,” said Harre. “For a successful hospitality business, the margins are anywhere between 10 and 20%. You give Uber 35% of that and it’s like, where do you go from that?” he said.

“It’s a case of everyone is doing it because everyone else is doing it, but at what cost? What it’s going to come down to is how many have to drop out before they start moving the commission rate. I guess that’s why they look after the big boys, because as long as they’re still there it still has a certain attraction.”

“Right now when I go to negotiate a rate, I guess from Uber’s end they have confidence in the business model and that confidence is the monopoly and everything that comes with that. So you’re sort of negotiating against yourself, really.

“Because, OK, we could turn this off and stop giving [them] the commission, but what does that actually do to our business? There is no other place to go, so I think the only good that can come from it is if there are other competitors. If you look at some of the [delivery partner] brands operating in Australia, the commission rate is as low as 20 or 25%, which is more sustainable from a business point of view.”

Nguyen of Where’s Charlie said she has come close to pulling her business from Uber Eats many times. “It’s been playing on our minds.

“The only reason I stick with Uber is to keep up the momentum, because we want to bring our food to our customers but we have no delivery service ourselves.

“I think it might work OK with restaurants that sell their food for $20-25 – after 35% they will still have some sort of profit going into their pocket – but we sell our food for like $10-$11, so after 35%, after tax, after labour, we maybe make $1 or $2. It’s not a lot.”

In a statement issued to The Spinoff, Uber Eats said: “We have more than 1500 restaurant partners in New Zealand who choose to be on our platform because it helps them grow their business and reach new customers with a fast, reliable and efficient delivery option.”

Keep going!
Wellington: cheese scone capital of the world (Image: Tina Tiller)
Wellington: cheese scone capital of the world (Image: Tina Tiller)

KaiSeptember 1, 2019

Inside Wellington’s obsessive and hyper-competitive cheese scone scene

Wellington: cheese scone capital of the world (Image: Tina Tiller)
Wellington: cheese scone capital of the world (Image: Tina Tiller)

Alice Neville dives into Wellington’s doughy underbelly to uncover the eye-opening truth about the capital’s passion for this humble baked item.

One of my first proper jobs was at Nikau Cafe in Civic Square, where I worked part-time while I was at university, circa 2004-6ish, making coffee and life-long friends. I also ate a lot of cheese scones.

These scones were amazing, seriously. Golden rectangles that towered high, packed with cheesy flavour, flecked with parsley and a touch of paprika. The only good thing about those 7am starts – apart from getting to rest my head on the warm coffee machine without too many customers seeing – was witnessing the arrival of the first cheese scones of the day, the baker emerging from the oven downstairs with trays laden, the delicious aroma preceding her arrival. 

After I left Nikau and Wellington simultaneously, I pined for them. Perhaps they were emblematic of something bigger, of Wellington itself or at least the city’s cafe culture. This was when Auckland was still lagging behind, when flat whites were single shots in massive cups and Coffee Supreme was nowhere to be seen. 

Once my old workmate and good pal Sarah came up to Auckland and brought me a cheeky cheese scone. I will never forget the happy sight of a slightly greasy, crumpled paper bag emerging from her handbag as she sat down to join me for a beer. I ate it then and there, naturally. 

The little scone that came to Auckland (apologies for the poor-quality Insta post, 2013 was a different world)

I asked my old boss, chef Kelda Hains, who ran the kitchen at Nikau for almost two decades (she and business partner Paul Schrader sold the cafe last year and now run Aro Street restaurant Rita), what made those scones so good. “Just so much cheese,” Hains responded immediately. “A ridiculous amount of cheese. I guess I pushed the cheese as much as I could until the structural integrity of the scone was compromised.”

Kelda, I thank you for your visionary risk-taking, your boundary-pushing attitude to baking. “And we were really into serving them as fresh as possible,” she added. “We didn’t let them sit around for too long, because the best scone is one straight out of the oven.”

For a long time I thought it was common knowledge that the world’s (or at least Wellington’s) best scones came from Nikau, but it has come to my attention that there are other claimants to the throne. In fact, for several years now, an event called ‘The World’s Best Cheese Scone’ has been running as part of Visa Wellington On a Plate – an always sold-out masterclass at which people learn the secret recipe for the cheese scone from… Pravda. The cafe holds tightly to its recipe, revealing it only to those lucky enough to nab a ticket to the sought-after class. 

They request that those taking part not post on social media – this is top-secret business. “We have people who try for years and years to get to the class and find out the recipe,” Pravda restaurant manager Sadie O’Rourke told me. 

Full disclosure: I don’t think I’ve ever had a cheese scone from Pravda, which is certainly a stalwart of the Wellington hospo scene, so I can’t comment on whether it really is the world’s best. But it got me thinking about how seriously Wellingtonians take their cheese scones. 

When I was looking for a recipe to convert my scone-sceptic colleague to the joys of this finest of foodstuffs, I was directed multiple times to the recipe from Ministry of Food, another Wellington cafe that’s been around for yonks.

Then there’s Scorch-o-Rama in Scorching Bay, whose cheese scones even get a mention in Felicity Cloake’s ‘How to make the perfect cheese scones’ article in The Guardian; and El Porteno in Tawa, which claimed to have sold 30,000 in three years. There’s a whole reddit thread with other recommendations, and last year, Wellington radio station The Hits held a ‘cheese scone-a-thon’ to raise money for Plunket. 

Compare that to Auckland, where I struggle to name a single cafe that does a reliable cheese scone. Maybe that’s why the aforementioned colleague, an Aucklander through and through, hates the things.

I took an online poll of people’s thoughts on the Wellingscone phenomenon, and the tips flooded in. Floriditas, Pickle & Pie, Vic Books, they said. The Penthouse, Spruce Goose, Glass, Goldmine and yes, Pravda. Sweet Release even does a mean vegan cheese scone, apparently. Former Wellington residents reminisced about excessive cheese scone consumption. “Can confirm I ate a cheese scone at least twice a week for 12 months while living there,” one commenter said. “Cheese scones were my daily late-for-work breakfast when I lived in Wellington,” recalled another. “I think it’s just a given that if you sell coffee, you must have a cheese scone on the counter.”

That confirms it – Wellington is the cheese scone capital of the world. Get rid of that silly Wellywood sign, ditch the bucket fountain, dump the bloody eagles at the airport and replace them all with GIANT. CHEESE. SCONES. Please. 

But why? What is it about Wellington that makes it such a hotspot for cheesy baked goods? Is it the weather? The city’s proliferation of public servants? Its cafe culture?

The pundits of Facebook posited a theory or two. “They were a cheaper item at the uni cafes, and then we were hooked for our working lives,” hypothesised one. “It’s the cheapest food item in our hipster ass cafes that can serve as breakfast, lunch or a snack,” proposed another. 

Julie Clark knows more than most about Wellington’s cafe scene, setting up the much-loved Clark’s cafe at the library in the 90s, helping launch Nikau in 98 and then opening Floriditas and Loretta (both of which are frequently cited in any cheese scone discussion). It’s Clark’s cheese scone recipe that Hains continued to use at Nikau, albeit tweaking it over the years, and Clark still uses it at her cafes. (Hot tip: the Floriditas cheddar and rocket scone recipe is on its website.)

Clark says Wellington’s scone obsession came about as a backlash to a certain 90s favourite.

“Back in the mists of time, muffins were the thing, and there were a whole lot of people – me included – who got really sick of doing them,” she says. “I remember when we had a discussion about what we were going to do at Nikau, I said whatever we did, we weren’t going to do muffins. We just wanted to go back to good honest kai, really.”

Scones work well for cafes because you can scale up the recipe and bake them in bulk, and people loved something savoury as an antidote to cabinets overflowing with sweet things, Clark reckons. 

So is Julie Clark responsible for Wellington’s cheese scone obsession? “I wouldn’t quite go that far, but I think it had an influence,” she says. “I think we made a mark.

“The beauty of the Nikau cheese scone is that it had a lot of cheese in it. I think people then realised they had to up their cheese game. If you’re going to go for cheese scones, don’t be afraid of the cheese.”

A disturbing development over the last quarter of a century, however, is the deterioration of the cheese available to us, Clark says. “I think you have to make them with tasty cheese, that’s really key, but the issue now is Fonterra have got so smartarse that they think they can make cheese in two days and the tasty cheese doesn’t taste like anything. So we sneak a little bit of parmesan into ours at Flo’s and Loretta just to give it a bit more oomph. 

“Before if you bought a tasty cheese it had a bit of acidity and saltiness, and that made a very good cheese scone.” 

But cheese scones were a thing in Kiwi kitchens long before the 90s, of course. Helen Leach, a University of Otago academic who specialises in food anthropology, has spent the past year researching scones’ place in New Zealand. After analysing thousands of cookbooks and newspapers, she created a spreadsheet of 549 different scone recipes, starting in 1875 with a recipe for Scottish scones in a Dunedin newspaper. 

There were 74 scone recipes from pre-1900 New Zealand sources, but none were named cheese scones or contained cheese,” Leach told me. From 1900 to 1929, there were 81 scone recipes, and during this era the cheese scone made its first appearance – a 1919 recipe not from Wellington but Christchurch, where it appeared in local newspaper The Star.

After 1930 is when cheese scones really started making inroads: from 1930-1959, 132 scone recipes were recorded by Leach, 13 of which were the cheese variety. 

“Over the next period, 1960-1989, some increasingly elaborate cheese scones were renamed savoury scones. They were sometimes made with Maggi soup powder, or Marmite and vegetables, but always contained cheese,” she said.

“New Zealand cooks often altered the proportions of butter (if used in these scones), debated whether an egg was to be incorporated, and whether to add cayenne pepper. Mostly, the grated cheese was used as a substitute for butter, and the grating eliminated the need to rub the butter into the dry ingredients. Undoubtedly this made the recipe quick to prepare.”

Scones fell out of favour in the 90s when that dastardly muffin came to prominence, and Leach says she wondered whether they might become extinct. 

However, her research doesn’t shed any light on my Wellingscone theory. So I think it’s safe to say the capital has taken its place at the centre of the cheese scone scene only in recent years, since Clark et al championed them in their cafes. And Clark has a theory as to why the humble cheese scone so captured Wellingtonians’ hearts. “You know what that southerly is like, blowing up your derriere. You need a good cheese scone!” she says. 

“A cheese scone in the middle of a hot, humid Auckland day? It’s just not the same. But that chilly wind… I think it’s a result of climatic eating.”

This content was created in paid partnership with Visa Wellington On a Plate. Learn more about our partnerships here