The Competition Commission has recently implemented strict regulations on fast food delivery companies, specifically targeting popular platforms such as Uber Eats and Mr D Food. These new rules aim to address concerns regarding the control and pricing practices of these platforms. In its final report on the online intermediation platforms inquiry, the commission high point key changes that will affect the operations of these delivery giants.
One major change introduced by the commission is the removal of discretionary powers that franchisers, including well-known chains like Steers owner Famous Brands, previously had over their franchisees. These powers included the ability to restrict the choice of delivery partners for their franchisees. However, under the new rules, franchisers are no longer allowed to dictate or restrict their franchisees’ choice of food delivery platforms. This move promotes fair competition by eliminating exclusivity and giving franchisees the freedom to explore different delivery options.
Another crucial finding of the inquiry relates to parity pricing clauses. These clauses, often present in contracts between platforms like Uber Eats and Mr. D Food and participating restaurants, prohibit the restaurants from offering lower prices on other platforms or their own websites. While Uber has already removed this clause from its contracts, the commission requires it to inform restaurants of this change.
On the other hand, competitor Bolt Food is still required to remove the clause and notify their restaurant clients accordingly. Moreover, all food delivery platforms must now inform customers that the prices they pay for food delivery may be higher than in-store prices, and the reasons behind this pricing disparity must be disclosed. This transparency ensures that consumers are well-informed and understand the factors influencing the delivery fees they incur.
These new regulations demonstrate the Competition Commission’s commitment to fostering a fair and competitive environment within the fast-food delivery industry. By limiting the powers of franchisers and preventing the restriction of delivery partners, the commission ensures that franchisees have the opportunity to choose the platform that best suits their needs.
Additionally, the elimination of parity pricing clauses and the requirement for clear disclosure of price differentials enhance transparency and promote informed decision-making for both restaurants and customers. The requirement for transparency in pricing practices ensures that customers are aware of potential price differences and the reasons behind them. These measures contribute to a more equitable and customer-centric ecosystem for food delivery platforms. Stay tuned with us for more latest updates.