The Australian food delivery landscape has evolved rapidly in recent years, particularly following the pandemic, which saw a significant increase in food delivery services.

A recent initiative to establish an independent food delivery platform, Delivery Angel, has been discontinued due to operational challenges, highlighting the difficulties faced by smaller players in a market dominated by major platforms like UberEats, DoorDash, and Menulog.

Co-founded by David Ansett of Etto Pasta Bar and Gabi Machado of Misschu in Melbourne in 2023, Delivery Angel aimed to offer a cost-effective delivery alternative for local restaurants.

However, the company has ceased operations, with Ansett noting that despite favorable pricing for customers and better compensation for drivers, consumer reliance on larger platforms hindered its success.

"People are addicted to those big platforms and the choice in those marketplaces," he stated.

The appetite for food delivery among Australians has seen a remarkable increase, with the number of delivery drivers nearly doubling over the last decade.

Current estimates suggest that over 86,000 individuals are employed in food delivery roles across the nation as of 2024. This shift has coincided with changes in employment trends in the hospitality sector, where the number of waitstaff has declined, reflecting a growing consumer preference for online ordering and delivery services.

Industry leaders note that larger delivery providers have effectively captured consumer interest with extensive restaurant selections and wide-reaching delivery networks.

Yet, their business models come at a cost to restaurant owners, who face commissions as high as 30% from UberEats and DoorDash, with Menulog’s fees varying depending on individual agreements.

These financial burdens often lead restaurants to re-evaluate their pricing and operational strategies.

According to a recent Uber report, a significant majority of restaurants—96%—reported increased revenue over the past year, indicating that online food delivery can create opportunities for growth.

However, Ansett contends that the commission structures in place can stifle profitability for restaurants.

He emphasized the challenge of maintaining low costs while simultaneously affording high delivery fees: "More than half of the customers who used to go to restaurants now order delivery."

John Hart, national president of the Restaurant and Catering Association, commented on the difficulties facing independent platforms like Delivery Angel in the current economic climate.

He explained that many restaurants lack the scale necessary to establish their own delivery systems, making partnerships with established delivery companies a necessity despite the high fees involved.

Hart mentioned that using specialist providers allows restaurants to achieve volume and turnover that they otherwise could not manage alone, offsetting some of the associated costs.

The competitive nature of Australia’s food delivery market has led to the exit of various players, including Deliveroo, which ceased operations in late 2022 after years of losses, and Foodora, which departed in 2018 amid legal disputes concerning worker rights.

The challenges inherent in this sector are underscored by a pronounced sense of distress among restaurant operators, as articulated by Ansett, who described the current environment as one of unprecedented difficulty, with many businesses struggling to remain profitable.

Estimates indicate that Uber Eats reached approximately 88% of the Australian population in 2024, marking its significant role in the food delivery ecosystem.

As commission rates remain high, concerns persist about the long-term viability of local restaurants in a landscape that is increasingly reliant on delivery services.