Meituan refutes claims its delivery fees are hurting restaurants amid coronavirus downturn

China’s top delivery app Meituan Dianping has pushed back on claims that it is charging higher commission fees and enforcing exclusivity clauses at a time when restaurants across China are struggling to survive amid the impact of the coronavirus pandemic.

Last week, the Guangdong Restaurant Association published an open letter to Meituan, urging the Chinese delivery giant to slash commission charges for deliveries and to drop what it calls unfair terms requiring restaurants to sign exclusively with its platform.

“Meituan delivery has a market share of 60 to 90 per cent in Guangdong province...It keeps increasing the commission ratio, and charges up to 26 per cent commission for newly-opened catering merchants. It has exceeded what most catering businesses can endure,” the association said in the letter which it posted on its WeChat account on Friday.

The association asked Meituan to cut commission rates for all Guangdong restaurants by 5 per cent and to cancel the exclusive clause immediately, allowing businesses to use the delivery services of other platforms to help them recover from the downturn caused by the pandemic.

Puzhong Wang, Meituan senior vice-president for its food delivery business, said in a statement issued Monday that the company lost money for five consecutive years after launching and only broke even in 2019.

“We need to invest most of our income to help merchants develop professional delivery services, acquire orders, and improve digital infrastructure,” he said.