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The ride slows down for food delivery business

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Number of riders has fallen by 85%, says one service provider.

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PETALING JAYA:
Businesses are back and the economy is nudging forward but one sector – food delivery – is seeing a steep decline.

The number of food delivery riders has fallen over the past month, with one service provider saying there has been an 85% drop in availability.

Both restaurants and food delivery companies have confirmed the decline in interviews with FMT. They said many riders might have gone back to their full-time jobs with the gradual reopening of the economy following the lifting of the second movement control order (MCO) early last month.

Some delivery riders have switched to working for courier delivery companies, which are seen as offering more stable incomes. Others are using withdrawals from the EPF i-Sinar scheme as capital to start up new businesses.

“There has been a large decline in available riders for the past month or so, and availability has dropped by around 85% during the period,” Dego Ride founder Nabil Feisal Bamadhaj said.

“We see multiple factors at play, such as better employment opportunities, the ability to withdraw from the i-Sinar scheme, and students going back to colleges and universities since the MCO was lifted.”

Shubham Saran, Foodpanda’s head of logistics in Malaysia, said there had been a decrease in the number of riders around the Klang Valley over the past few weeks.

He said the loosening of MCO regulations was the main reason for this decline and predicted that the drop in the number of riders would pose a challenge in the fasting month of Ramadan, which begins in less than a week.

“We expect a strain on operations as our Muslim riders, customers and vendors will seek to break their fast at specific times,” he said.

“If this trend continues, we need to focus on investing efforts into getting more riders onto the platform.”

Foodpanda’s biggest competitor, Grab, has also noticed a decrease in the number of service partners and is temporarily halting its Hot Deals campaign, which gives customers a 50% discount on orders with GrabFood for two days.

In a message to merchant partners, it said it would interrupt the campaign briefly due to the “temporary reduction in the number of delivery partners online” as demand continues to increase, especially over the weekend.

“We want to avoid disappointing consumers with long waiting times or risk wasting food due to an imbalance in supply and expected demand,” it said.

Grab also said the reasons for the temporary reduction in supply included the frequent rainfall during peak meal hours.

A restaurant owner in Kuala Lumpur said a police operation against noisy motorcycle exhausts was among other reasons for the drop in rider numbers.

“Operasi Ekzos has seen many riders go into hiding,” he said.

“Others have gone into e-commerce parcel deliveries, where they can take 80 parcels to deliver and get paid for the day. There’s no need to wait around and not be sure about getting food delivery jobs.”

He said certain service providers were offering up to RM160 a day in bonuses to attract more delivery riders.

Malaysian Indian Restaurant Owners Association president J Govindasamy confirmed that the 2,000 members of the association were seeing fewer delivery riders compared to before the recent MCO.

“Business has improved slightly for us, and I do not think this lack of delivery riders is a major problem as dine-in customers are now allowed.

“If there were no dine-in customers, this would be a big issue,” he said.

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