Uber Eats, Deliveroo and Just Eat double yearly commission revenue from UK restaurants

By: Fionn Hart, UK Country Manager, Flipdish

JustEat, Deliveroo, and Uber Eats are behemoth brands and household staples across the UK. Big tech now dominates a market that has exploded in recent times, reaching a valuation of £11.4 billion in 2020 – double the figure reported in 2015.

Although largely accelerated by the pandemic, this taste for takeaways has been habitual amongst Brits for decades, with the foodservice delivery market expected to sustain robust growth and reach a valuation of £12.6 billion by 2024.

For these companies at the top of this food chain, the rewards are immense. According to international restaurant and delivery analyst Peter Backman, the combined revenue of these three aggregator platforms rose to £2.5 billion a year in 2021 – up from an estimated £1 billion a year pre-pandemic. However, there is a less pleasant side to these figures that is not spoken about enough.

For restaurants, the domination of the three biggest marketplace players has backed them into a tight corner. Opting to go through aggregators to help with the pivot to delivery-only in the peak of the pandemic, their profit margins become slashed dramatically owing to the enormous commissions that are imposed, usually around the 30% mark.

It is a situation that has left many such businesses stuck between a rock and a hard place during what has already proved to be one of the most challenging periods in the history of the industry. Things got so bad at the end of 2021 where a Flipdish survey of 200 restaurant owners in the UK revealed that the average outlet only had enough cash to survive for 10 weeks, should there have been another COVID-19 lockdown in early 2022.

Such enterprises have been pushed to the brink, with 40% in the same study stating that they feel it will take anywhere between two and 10 years to fully financially recover from the pandemic.

When asked, nearly a third (30%) of owners felt angry that aggregators were taking so much commission and hitting a sector already on its knees. Today, however, many are beginning to mount a fight back. Flipdish data shows that roughly three in five have ditched an aggregator platform since the pandemic first started, while 21% listed breaking away from Just Eat, Deliveroo, Uber Eats as a top priority for 2022.

Despite this, many restaurants are concerned about a drop in order volumes if they leave the aggregators. The reality is, however, that by focusing on direct-to-consumer orders, they will have more control and a better balance sheet in the long term, but investing in the right tech partnerships now is critical for this to succeed.

Investment in new technologies

One in five restaurants are planning to invest in new technologies this year.

While takeaway will continue to be an important component of the restaurant revenue make-up moving forward, the in-store experience will be key to steadying the ship and drive a strong recovery through 2022.

However, the UK restaurant industry is currently suffering a severe staff shortage, with COVID-19 having poured gasoline on a growing problem that had been swelling for many years. While foodservice businesses are eager to capitalise on a rise in customer demand, their ability to do so is being hampered by a lack of staff, resulting in unwanted periods of closure and reduced output.

Take self-service kiosks and table service apps, for example. These technologies can address this issue and make the most of revenue opportunities, not just in the face of imminent labour shortages but for many years to come.

The customer appetite is also there, with 57% of customers willing to leave pubs and bars if queues are more than five people long. It isn’t surprising then, that from the same Flipdish study, more than 80% enjoy having the option of ordering their food and drinks using their phones as opposed to queuing at a counter altogether.

Customer service is said to be king. By providing customers with the freedom to order via QR codes or digital ordering kiosks, you are offering a wider choice that will better suit the preferences of different people. Further, it will also reduce the strain on staff whilst drastically reducing queue sizes to quicken service for customers, freeing staff to focus on the hospitality itself.

QR Code ordering is not just standalone technology that benefits the staff working on the ground; it also encourages innovation across the board. By removing the barriers of traditional print menus, restaurant owners are encouraged to constantly revamp their offering, trial promotions, and alter prices.

As restaurant owners begin to make their move away from aggregators, they’ll need to turn their attention to how they maintain a seamless and integrated customer experience. It’s all about implementing the right technology at the right time to ensure restaurant owners feel they can step away from the the big three, and not sacrifice on customer satisfaction or profits in the process.