Smart City Kitchens Responds to Media Statements by GrabFood and Deliveroo on Shut-Outs of Singapore F&B Operators to Their Delivery Platforms
PUBLISHED ONJuly 29, 2019 8:30 AM
1. GrabFood actively markets itself as an island-wide food delivery provider, regardless of the location of food outlets or end-users. Since its launch in May 2018, GrabFood has been delivering orders to Singapore consumers.
However, without prior warning, on 27 June 2019, GrabFood abruptly disabled access to F&B entrepreneurs operating from SCK's shared kitchen in Tampines. SCK, Singapore's first independent delivery-only shared kitchen business, commenced operations early June 2019. The shut-out suggests that GrabFood has reneged on its promise to Singaporeans.
The reason given to the media by GrabFood was that SCK's venue was not optimally located for its consumers and delivery partners. This statement is puzzling as there are over 350 restaurants on GrabFood's online platform within 3 kilometers of SCK's shared kitchen, and in the neighbouring townships of Tampines and Pasir Ris, with a combined resident population of over 400,000 residents. By restricting restaurants from operating at SCK's Tampines facility, GrabFood is preventing new restaurants from providing more food choices to Tampines residents, workers, and professionals.
Prior to the shut-out, several SCK restaurant partners had been activated to begin delivery operations with GrabFood. Every indication had shown that our F&B partners had been readied for delivery operations before they were unexpectedly shut out.
2. Deliveroo similarly did not give any prior indication to exclude SCK's restaurant partners from its platform. In fact, over the past 12 months prior to the shut-out, SCK held several meetings with online food delivery companies including Deliveroo to discuss and share openly how SCK can support delivery-focused F&B operators, and how SCK's model can also help food delivery companies improve efficiency, reach, and consumer choice in Singapore.
After SCK met with Deliveroo on 3 June, Deliveroo informed SCK restaurant partners two days later that they would be shut-out without providing any reasons. Deliveroo was recently quoted in the media as saying, "it is in active discussions with SCK to evaluate the best solution for its restaurant partners and customers". Since its last meeting on June 19, SCK has not been in active discussions but would welcome any such communication from Deliveroo.
3. The shut-outs by GrabFood and Deliveroo, which jointly account for the majority of Singapore's online food delivery market, have occurred within days of each other. These actions have been hugely disruptive to our F&B partners' businesses. Nevertheless, SCK is striving resolutely to ensure an open online food delivery market and continues to work closely with our F&B partners to extend financial, strategic marketing and branding support to help them through these challenging times.
4. The shut-out actions by both GrabFood and Deliveroo go against the established principles and spirit of fair competition and are not in the best interests of restaurateurs/F&B operators, both small and large. It sends the wrong signal to aspiring entrepreneurs who want to apply creativity and hard work to make a difference to the challenging F&B marketplace in Singapore. While F&B partners and their customers have clearly been affected by the denied access to the majority of the delivery market, the greater impact will be on local F&B entrepreneurs, regulators, customers and Singapore's national reputation for transparency and fair play.
5. We maintain that Singapore's online food delivery marketplace is vibrant and has great potential not only to grow but to also serve as a potential template for other Asian cities - due to its infrastructure, strong legal framework, savvy consumers, and creative food entrepreneurs. However, for this model to succeed and to achieve long-term sustainability, all parties need to operate from a level playing field which encourages collaboration and openness. In turn, this will help the local food culture develop while keeping it affordable for Singaporeans.
We continue to engage the Competition and Consumer Commission of Singapore and welcome all food delivery platforms, including GrabFood and Deliveroo, to work positively with us towards building an open, collaborative, and sustainable online F&B ecosystem that all Singaporeans can be proud of."
Warren Tseng, General Manager
Smart City Kitchens
Singapore
About Smart City Kitchens
Smart City Kitchens provides delivery-focused kitchens and services to empower restaurants to grow their delivery business quickly, efficiently and with less upfront costs. While we do not do delivery, we contribute to a healthy food delivery ecosystem that benefits restaurants, eaters and all online food delivery platforms. Restaurants can open more outlets faster. Diners can access more options and get faster deliveries. And these help food delivery apps become better at providing more selections for consumers. Everybody wins. SCK operates a 13,000-square-foot ready-to-operate kitchen facility located in Tampines. It is designed for local brands to operate delivery-focused F&B activities, with lower upfront costs, streamlined operations, greater flexibility, improved productivity and scalability. As at 25 July, 40+ operators have committed to partner with SCK, of which seven have already commenced operations. For more information, please visit https://www.smartcitykitchens.com/
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