Thailand warns food delivery platforms about over-charging

food delivery over-charging Thailand — A worker of Grab, a food delivery service company, walks in front of Central World mall after the government shut down all the shopping centers in the country due to the coronavirus disease (COVID-19) outbreak, in Bangkok, Thailand, March 22, 2020. REUTERS/Soe Zeya Tun

BANGKOK (Reuters) – Thailand’s anti-monopoly watchdog warned food delivery platforms on Wednesday they could face fines for over-charging as online food orders surge amid the coronavirus outbreak.

The announcement comes after malls and restaurants were ordered to close except for take-out orders in late March. Food delivery platforms have seen a spike in orders, with operators like Foodpanda seeing orders rise 20 times from a year ago.

Thailand has reported 1,771 confirmed cases and 12 deaths.

There have been complaints that food delivery platforms have increased their service fees for restaurants from 20% to rates of up to 40%, the Office of Trade and Competition Commission (OTCC) secretary-general Somsak Kiatchailak said, without naming any companies.

Platforms are also charging restaurants fees for marketing and advertising, he said.

Unfair commercial activity that causes damage to consumers will face a penalty of 10% of the year’s revenue, the OTCC said.

Grab said on Wednesday it was cutting its maximum food delivery commission from 35% to 30% to reduce financial burden for its partners.

“We are taking another step to provide greater support to alleviate the impact of COVID-19 on our community,” Head of Grab Thailand, Tarin Thaniyavarn, said in a statement.

Rival food delivery app, LINE MAN, owned by Japanese chat app LINE Corp, has always charged between 20% to 30% for restaurants who opted into the platform’s promotional program with a discounted delivery fee, its head of business development and marketing, Waranan Chuangcham, told Reuters.

Restaurants can also use LINE MAN without commission where customers pay the regular deliver fee, she said.

Foodpanda, which has seen order increases of up to 30% each week in Bangkok, said it has kept commission at 30%. Foodpanda Thailand CEO Alexander Felde said it was rolling out a package worth 35 million baht to support riders and restaurants.

The package includes insurance, masks, sanitizer kits for its riders and also free delivery and vouchers for restaurants, Felde said adding that the firm was recruiting 5,000 riders each week to keep up with demand.

GET, the Thai unit of Indonesian ride-hailing startup, Go-Jek, did not respond a Reuters request for comment.

(Reporting by Chayut Setboonsarng; Editing by Alexandra Hudson)