Food distribution companies appear in S’pore, but complaints are on the rise – Health Guild News


It seems that negative feedback on food delivery companies is very broad online.

A quick glance at the Facebook pages of food delivery platforms will reveal angry emojis and a series of user comments complaining about late, cold, and missing food; and it seems that these complaints have increased in recent months.

Wilron Loh said he had ordered noodles from the WhyQ street delivery platform last week. He waited an hour, but finally his order was not delivered. He described the experience as “worst delivery ever”.

Meanwhile, foodpanda user Brandon S said his payment was declined when he ordered his food, so he had to resort to buying lunch elsewhere. Unfortunately, his card was charged and he ended up paying two lunches that day.

Food delivery giant GrabFood also doesn’t save on heat.

Dissatisfied user Irvin Ng said he was “completely disappointed” with GrabFood after his points became a voucher after a cancellation of the food order. He was dismayed as he could not use the points to buy food from other traders.

Another GrabFood user, Kylie L, said her missing orders took more than two hours to investigate.

Food Delivery Claims Last Month / Image Credit: Vulcan Post

The intensified Phase 2 alert that has just ended has once again exposed the infrastructure problems of the food industry.

Last year, during circuit breakers, there were also rises and orders for food demand not delivered on time. Companies and experts had attributed these problems to a relatively new industry and the sudden emergence of Covid-19, a period in which food delivery companies did not have enough time to adjust quickly.

However, more than a year has passed since the Covid-19 passed. Even with time on your side, delivery issues still persist.

Why are there frequent complaints?

“(Customer service) is not important until (technology companies) have a service problem and then it becomes the deciding factor whether a customer can decide to exploit the problem on social media,” says Walter Theseira , associate professor and expert startups at the University of Social Sciences in Singapore (SUSS).

He added that the reason the Internet is overflowing with complaints about poor food delivery services is because the industry is cheap to enter, but it is costly to maintain quality service.

It is also costly to build an efficient infrastructure due to high operating and growth costs.

It is, therefore, a matter of funds, but it is not just a matter of customer service in the sense of hiring people to claim, but also of investing in operations.

It’s pretty cheap to create a website, find some people to start handing out food, and sign up for some F&B partners. The high cost of exploitation is that doing it well, especially when expanding beyond a narrow niche or geographic area, is very expensive.

– Professor Walter Theseira of SUSS

In addition, the food delivery model that usually hires “a la carte pilots” makes it easy for standards to be twisted.

Image credit: GrabFood

“If you rely solely on on-demand delivery equipment, which only pays when you have an execution order, you’ll really have problems when you have unexpected (or even expected) increases in demand,” Theseira explained.

To improve their skills and reduce bad feedback, Dr. Clive Choo, a professor at Nanyang University of Technology (NTU) School of Business, says food distribution companies should invest in good programmers. software and marketers.

“This will help them to continuously improve their routing algorithm. It is possible that marketing professionals will have to study the needs of a certain proximity and collaborate with food suppliers accordingly, ”he adds.

Why are prices rising despite intense competition?

Vulcan Post food delivery customers spoke to say that food and delivery prices have been rising on some platforms.

food delivery prices in Singapore
Image credit: Vulcan Post

When the media tried to order two cups of bubble tea from well-known brands at the White Sands Mall at an HDB block Pasir Ris located 1.4 km away, a check of several food delivery platforms reveals rates of inconsistent delivery.

In one app, it costs between $ 4 and $ 6 to deliver the drinks. This equates to the price of an extra cup of bubble tea. In two other applications, shipping charges range from 1.90 to 2.50 euros.

Experts attribute the highest delivery rates to the demand and supply of pilots on each platform. The work situation from home also means that there is more demand for food supply in the central area.

One expert says higher rates may also be reflecting better numbers to support companies ’contribution plans.

“Food delivery applications are under increasing pressure to improve margins, mostly because several are now public companies or intend to become public soon,” says Theseira.

As for higher food prices, Dr. Choo says it could be that food distribution companies make profits from food suppliers. “Another way to look at it is that food distribution companies are not willing to bear that cost,” he suggests.

The Singapore government had provided one short-term relief for Phase 2 HA F&B restaurants, funding five percentage points of commission expenses charged by Deliveroo, foodpanda and GrabFood.

The usual commission is 30% of the total food order.

Experts say that as more vaccines are made and the nation recovers from Covid-19, delivery companies should consider adjusting their commission rates to retain both customers and food suppliers.

“There is substantial evidence that logistics companies – which are part of what food delivery offers – have substantial economies of scale … I hope the market will tend to a small number of large players, with the possibility of coexistence of niche platforms with a particular specialty, ”says Mr. Theseira.

Be careful where you set your money

Covid-19 has led to the creation of new food distribution companies.

In March, AirAsia launched its food delivery service in Singapore, hanging free delivery promotions to attract customers.

Eat AirAsia
New food distribution companies such as AirAsia Food will try to intensify competition in the sector / Image credit: AirAsia food

At the time, the group said it had more than 500 pilots and about 300 food operators. It also claims to offer lower commissions compared to competitors.

A Facebook search also revealed minor food vendors such as, SG food delivery, i Delivery by Bao Jiak.

As much as these newcomers provide alternatives and variety, experts say consumers and traders should be more careful with less established suppliers in this space, especially if the company’s business model is to act as an intermediary and stay effective. during the transaction.

“You really have to evaluate the credibility of the platform or the merchant. It is extremely difficult to recover small losses or returns if no services are provided, unless the platform voluntarily offers this refund, ”says Theseira.

Dr. Choo could take much longer to reach new businesses, unless there are ongoing funds to achieve economies of scale to support their operations and application development, such as an efficient routing algorithm and routes. last mile delivery.

He adds that customers’ “stored value” or prepaid amounts could be lost when the food delivery company folds.

I do not advise consumers to go to food delivery companies that use subscription or prepaid models. (You) should pay while you use them.

– Dr. Clive Choo, of NTU Business School

If payments are made by credit card, there is some chance of canceling the charge, but other types of payments are unlikely to be recovered at a reasonable cost in the event of bankruptcy or business default, experts add.

“I don’t think most emerging companies enter the industry with the intention of misleading customers, and offering loss-making services is a well-established method of gaining market share on entry. The fact is that this industry is cheap but expensive to master, and not all startups will be able to maintain their business or provide adequate services, “says Mr. Tesira.

Long-term concerns about the food industry

Despite numerous structural growth problems, food delivery services will be maintained, experts say.

In a poll conducted in January this year, 80% of respondents admitted to asking for food delivery services more than ever, and half said they ask for food more than once a week.

Larger Singaporeans are also adopting food delivery platforms. 81% of respondents aged 45 to 54 state that they depend more on food delivery services to order meals.

food delivery in Singapore
Image credit: jumboseafoodsg via Instagram

With more desires for meals to be delivered to your doorstep, the responsibility lies on the platforms to improve your services.

Theseira suggests that food delivery companies analyze the cost model in hiring pilots to ensure quality shipments.

“I would say that food delivery services would like to have as much control as possible over the pilots, so that they can provide a predictable service, but they don’t want to pay the costs of making them employees of the pilots.”

“Delivery staff are encouraged to complete deliveries as quickly as possible, which means a certain risk of being reckless,” says Theseira.

As for labor market issues surrounding the concert economy as a whole, Mr. Theseira points out that any regulation and protection of the labor market would likely increase costs significantly.

For public health, he says there have been no major problems, as the short period of time between food preparation and delivery doesn’t really pose many risks, and food is usually sealed by the restaurant.

However, platforms must have high standards of food hygiene or perhaps introduce food safety courses to help workers better understand the requirements. Or be prepared to face the bad press, if something unfortunate happens.

“It’s always worrying that mishandling, etc., can introduce risks to food security,” he says.

Featured Image Credit: Getty Images

Also read: How does AirAsia Food combine with GrabFood, Deliveroo and Foodpanda?

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