Is GrabFood Secretly Limiting Your Choices Based On Profit?

Dr. Adrian Wong

4 years ago

Is GrabFood secretly limiting your choices based on what makes more money for them?

Public complaints by their merchants may have exposed what they have been quietly doing in the background…

GrabFood : Restaurant Not Available?

When you plan to order from a restaurant on GrabFood and see that it’s unavailable, you will often turn to the next available option.

Most assume that since the restaurant is listed as unavailable, it must be closed or too busy to accept orders for deliveries.

That may not be the case, as one gourmet burger restaurant found out recently.

Burgertory vs GrabFood : What Happened?

That gourmet burger restaurant, Burgertory, publicly revealed that GrabFood repeatedly set them as unavailable, even though they were open for business and eager to accept delivery orders.

When they checked the GrabFood app, they could see that other restaurants in the same area were available. Just not Burgertory.

When they complained to GrabFood, they were told that restaurant availability was turned on or off based on :

the commission rate – commission per order (25% to 35%)
the sales bucket – value of each order

In other words, what you see on GrabFood is not what’s really available, but rather – which restaurant is more willing to pay them more commission, or can generate them more money.

We are really disappointed and upset with the partnership with GrabFood.

We have been on-boarded to GrabFood for more than a year now, and we have been a cooperating partner.
Not until recently that we found out GrabFood has been very non-transparent in their assignation for restaurants availability in terms of radius.

We have been receiving a lot of complaints from our customers about GrabFood not showing the availability to deliver within reasonable distance, and we thought this is due to GrabFood system that is set to be within a specific distance in each area. However what triggered the following case was on 26 May 2020, when we were alerted by our staff that GrabFood was unavailable for that day (imagine the sales that we lost, especially during this COVID period whereby businesses are struggling). Our sales from GrabFood on that day is ZERO. Upon checking, we realized other restaurants in same area is available but not us.

Hence we reached out to GrabFood merchant support via live chat and given the response that they off our restaurant availability from the back-end due to differences in commission rate by different restaurants, which means the restaurants which signed higher commission rate with them will get the priority and ‘be available in more places’. And they switched on our availability back after our call.

We were very upset and escalated to the manager. He then gave us another explanation that GrabFood will allow restaurants with larger ‘sales bucket’ to appear in more places. If that’s the case, it’s discrimination against small businesses, or any businesses that have menu selling items with lower price.
We gave feedback to them that this is not acceptable. And the manager promised to get back to us again after discussing with the team. It’s been a week and we hear nothing from them.

Yet it happened again today..! We realized they ‘turned off’ our restaurant again after checking from the app. Hence we wrote a complaint again, and same cycle happened… (same canned response, and they switched back on)

We are deeply disappointed with such partnership relationship. Does this mean that we have to always check if our restaurant has been hidden from the platform? These occurrences have broken the trust, we don’t know when their system will discriminate against us again and only switch back on after we found out and reach out to them each time. This is totally unfair to small and medium businesses.

Burgertory vs GrabFood : What Do Other Merchants Say?

When the Burgertory complaint went viral, a number of other merchants chimed in to confirm that they too were marked as Unavailable by GrabFood :

Renee Tan : Happens to my restaurants all the time especially “crunch time”. Suddenly customers calls & dm come flooding our inbox’s asking why does our restaurant appear “offline”?!

Juan Lyn : I’m currently handling a chain of restaurant online delivery support and we are also facing the very same issue with you. The same reasons given above “sales bucket” size. And our ticket size on average is already around RM50.

Voxism Lim : Happens to our outlet as well.. Exactly what happen.. The store beside is always open, where as mine is turned off (unavailable)

Najee Ramli : Hey Burgertory, we too at Dante’s Italian Fusion Cafe share the same plight. This always happens to us, especially during peak hours. We too have customers who call and complain they can’t order thru GrabFood and opt for FoodPanda instead.

Alief Nurudin : My shop Meteora Cafe paid 28% commission to Grab. We NEVER appeared on the app unless you searched for us manually. We have experienced the SAME thing. Suddenly, NOT AVAILABLE.

GrabFood : It’s Not Because Of Lower Commission

After the public uproar, GrabFood quickly reached out to them the very next day to “discuss the issue”.

They clarified that Burgertory did not get “switched off” because of their lower commission, but did not explain why some restaurants get “switched off”, while others don’t.

We are truly humbled by the support from many of you and empathy shown by some of the business owners as well. Just want to give a quick update for those who has asked us about any update from GrabFood after the post yesterday:

They have reached out to us this afternoon to further discuss the issue, and clarified that the switch-off wasn’t due to commission factor, though we still don’t know the reason behind why certain restaurants in the same area are switched off unknowingly. We will continue to discuss and provide feedback to their team and hope that this will not happen again.

The reason why we decided to share the experience is to clarify what it might have impacted many of us as small & medium businesses. This is a year like no other and we empathise with all local businesses that are struggling to survive. We’re touched by some the responses we received yesterday, this is the time we strongly feel what brings Malaysians together. 🇲🇾

Apart from this, all of us from Burgertory team is really thankful for all the support to our business shown by our community, especially everyone of you, in what are the toughest of times. We always strive to sustain and provide a better F&B experience to all our customers. Hope all of us can stand strong together in unity through this tough times. Stay safe! 💪

Burgertory vs GrabFood : Some Updates!

Grab issued an official press statement, stressing they do not turn restaurant availability off based on commission rate, with no mention of the sales bucket.

In a Facebook comment, they said that Burgertory was switched off the first time, because a GrabFood rider arrived and found them closed.

However, Burgertory pointed out that they kept Grab updated on their operating hours, and the rider arrived late – after they closed at 8 PM, and they were not alerted to the rider’s report, or that they were being switched off.

Burgertory also posted a separate update, sharing that Grab told them other merchants “has paid campaigns with them, and the difference in the discoverability radius is to help with the campaign ROI“.

GrabFood Merchant Prioritisation : The Good, Bad + Ugly

GrabFood have a limited number of riders, so it makes sense to prioritise merchants who pay more, and generate more profit, over everyone else.

But instead of making it transparent, they marked those smaller / less-profitable merchants as Unavailable, leading customers to assume that those restaurants were closed.

Is it allowed? That depends on their agreement with their merchants. If the partnership agreement allows GrabFood to prioritise better paying merchants over everyone else, then their merchants can either accept it or switch to a different deliver service.

However, it is important for consumers and merchants both to understand the consequences of a system that prioritises the platform’s profits over customer ratings.

Such a system artificially limits the customer’s options, and nudges them towards more expensive options that are more profitable for said platform.

Eventually, merchants will be forced to keep paying more and more for the right to “remain visible” on the platform – the costs which have to be rolled into every meal. Ultimately – the cost is paid entirely by the customer.

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