Image: The Spinoff / Supplied
Image: The Spinoff / Supplied

FoodFebruary 24, 2021

Menulog is offering full-service delivery for restaurants. Is it enough to challenge Uber Eats?

Image: The Spinoff / Supplied
Image: The Spinoff / Supplied

Here’s what you need to know about the revamped food delivery service.

What’s the news?

Last week, Menulog announced it was rolling out full-service delivery for restaurants courtesy of its own fleet of drivers. The service – which has been available in Australia since 2018 – launched in central Auckland on February 18 and is set to roll out to other parts of the city by March, and another 23 cities and towns in New Zealand by April.

Why is this a big deal? 

Despite operating in New Zealand since 2012, Menulog’s new delivery service is a major new development for the business, which previously only offered delivery by restaurant staff. The self-delivery model meant Menulog was able to charge a much lower commission rate (14%) than its main industry competitor, Uber Eats, which allowed restaurants to keep more of what they earned. However, it also meant it severely limited the amount of choice available to customers as restaurants had to facilitate their own deliveries rather than relying on the convenience of a third party. 

Menulog says self-delivery will still be an option for restaurants, but the launch of the new service means many more food businesses will be looking at the platform as a viable option.

So who are these delivery drivers and how many of them are there?

Menulog declined to say how many drivers it currently employs in New Zealand but says “the ambition is to provide a new opportunity for flexible work for more than 1,000 food couriers across the country”. It’s likely some of these will also be couriers for other food delivery services, such as Uber Eats, since Menulog couriers are considered self-employed contractors rather than employees of the business. 

It’s a bit of a thorny issue though, as the UK supreme court recently ruled that Uber drivers should be classed as workers, not self-employed, with access to the minimum wage and paid holidays. Interestingly, last year, the chief executive of Menulog’s parent company Just Eat said he wanted to stop using gig economy workers across the UK and Europe. The company then began hiring UK riders as “workers” – either directly or through an agency – in November and has now signed up more than 1,000 in London and Birmingham.

How much will these drivers get paid?

It’s hard to say, as drivers are paid per delivery and how much they get is based on a number of factors, including the full delivery fee, transit pay (which is based on distance and time) and if they have to wait around for a longer period of time at a restaurant. Notably, Menulog doesn’t take a commission from its drivers.

Speaking of commission, what about the restaurants? How much will they be charged?

Again, Menulog declined to say as “there is no one size fits all when it comes to commission”. It also declined to give a ballpark figure in terms of standard rates but added that it would be offering “very competitive commission rates to the market, to bring healthy competition and a better value proposition to New Zealand restaurants”.

For context, Uber Eats charges a commission of up to 30% while New Zealand competitor Delivereasy charges 20%.

And what about delivery fees? How much will they be?

Delivery fees will be on a tiered system with an average delivery fee of $5 but can also be as low as $2 during off-peak times. For the first three months, however, Menulog is removing all delivery fees with a $10 minimum order. 

What’s the app like to use? Is it easy to order?

Based on my single experience using the revamped platform to order pad Thai over the weekend, the app was much improved from previous versions. Now it has a very similar user interface to Uber Eats, allowing you to track your order on an integrated map and notifying you when the restaurant receives the order, when the courier picks it up, and when it arrives at your door.

Lastly, what’s the food like on there? Is there a good range of restaurants to choose from?

While it’s still no match compared the massive range of restaurants on Uber Eats, Menulog’s offering has slightly expanded since launching full-service delivery and now includes businesses like Pita Pit, Mexico and the My Kitchen restaurant chain. Menulog says it hopes to have 1,800 restaurants on the platform by April (currently it works with more than 900) and increase the number of restaurants on board by 200% by mid-2021.

Mad Chapman, Editor
Aotearoa continues to adapt to a new reality and The Spinoff is right there, sorting fact from fiction to bring you the latest updates and biggest stories. Help us continue this coverage, and so much more, by supporting The Spinoff Members.Madeleine Chapman, EditorJoin Members

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