Sydney cafe bans UberEATS, calling organisation 'incredibly exploitative'

Customers orders from restaurants and cafes are brought to their door by freelance cycle couriers. Picture / Getty Images

A Sydney cafe says it will refuse any more orders through UberEATS, claiming the organisation is "incredibly exploitative" and makes it virtually impossible to turn a profit.

UberEATS, along with rivals Foodora, Deliveroo and Menulog, are part of the growing industry of on-demand food delivery, where customers order from restaurants and cafes through apps with orders then brought to their door by freelance cycle couriers.

The refusal of Petty Cash Cafe, in Sydney's inner west, to work with UberEATS comes as the Transport Workers Union (TWU) claimed three out of four food delivery drivers were being paid less than the minimum wage.

On Tuesday, the Marrickville coffee shop, which boasts "everything is homemade except the bread", posted on their Facebook page that they were pulling out of UberEATS from January 31.

"Why? Because after UberEATS has taken its 35 per cent share, it is virtually impossible for us to make a profit, in fact we basically run at a loss with our Uber sales," Petty Cash cafe's post wrote.

"UberEATS is incredibly exploitative of small business AND drivers."

The cafe also said they "despaired" at the plastic waste generated by packing up all the orders.

Speaking to news.com.au, Petty Cash's co-owner Caitlin Craufurd said a significant number of orders came via UberEATS and while her income would go down when she removed the business from the platform, her expenditure would fall by more.

"I only did UberEATS because I thought we had to and it's a bit of pain in the butt really. I'd rather serve customers that are actually here."

Craufurd said a recent change in Uber's terms, that meant restaurants were now shouldering more of the financial burden, for example, if an order wasn't delivered, had made her look twice at the service's cost.

"I thought we're crazy to do this. It's basically our entire profit margin and I don't know any small business that makes more than 35 per cent — a lot of places are on 20 per cent margin. It exploits everyone except Uber."

Customers seemed to be supporting the move.

"A first hand example of the corrosive effects of the predatory behaviour of some so called 'share economy' platforms," commented one supporter.

Others were shocked at how much restaurants were paying to UberEATS. "Woah, they take 35 per cent? Time to give up the UberEATS," wrote one.

However, prices for food delivery services may be going up anyway if a union campaign proves successful.

On Wednesday morning, the TWU claimed one in four delivery riders work full-time hours yet none get sick pay or other entitlements.

The union said pay rates for delivery riders fell below those of traditional bike couriers which were covered by transport award rates.

"This is a damning indictment of the abuse of workers in Australia today. Wealthy companies are engaging in wage theft, ripping workers off, leaving them without compensation when they get injured and not paying their superannuation," said TWU National Secretary Tony Sheldon.

"These riders are crying out for guaranteed hours, fair rates of pay, rain gear, work cover, sick pay and insurance for their bikes. The Federal Government may think this way of engaging workers is 'exciting' but the survey shows the levels of exploitation in the on-demand economy."

An Uber spokesman told the Daily Telegraph the changes would destroy the company's flexible work arrangements, which is why 94 per cent of drivers signed up to work for Uber in the first place.

It's a brave move from Petty Cash Cafe given the huge rise in the apps. The market, currently worth A$1.5 billion ($1.6b), is expected to jump to A$4.2b by 2025 according to a report by financial services firm Morgan Stanley.

Talking to Fairfax earlier this month, Robert Galati, who owns Sydney restaurant Fratelli & Co, said the apps were great for customers but were taking a 16 per cent cut from his turnover.

"Customers that were 100 per cent mine are now going through these other avenues and they're taking a cut, indirectly losing money that was already mine," he said.

Craufurd said UberEATS fans should look a little deeper into who the service was benefiting.

"They should stop and have a think about how they treat drivers. They're not happy, we never seen an Uber driver come in with a smile on their face."

News.com.au has contacted UberEATS for comment.