Food delivery revenue splitting formula among rider-owner-agent

Fig. 1 Grab food is answerable to its investors. It is not a social enterprise with capital procured from the public.

First, the owner gets 70% of its sales (FULL STOP). For example, if owner sold $27, it gets $18.90. Grab ensures order and delivery.

The rest is about Grab’s charges to CUSTOMERS (FULL SOP).

Grab charges extra on customers. E.g., $27 + $3 = $30 (listed price). Then service fee at $11.50 (depending on distance), which is 38% of listed price.

Rider gets $8.50 (assumed, ref 1). Grab gets $41.50 – $18.90 – $8.50 = 14.10. In terms of revenue distribution, it is a 20-45-35 formula of the last pricing of $41.50.

In this arrangement, owner still gets 70% of earning, e.g., $18.90. Grab coordinated with other stakeholders, namely customers, riders, and stall owners to earn $14.10. Rider received $8.50 per trip (assumed, ref. 1). This arrangement is still good because without Grab, stall owner gets zero.

Grab is not a social enterprise and it needs to pay investors. Investors had pumped capital into Grab.

Lastly, disgruntled stall owners can opt out if they think Grab is a bane than a solution.

Else, stall owners can coordinate among themselves to incorporate their own food delivery services for themselves. This would be similar to the extra service charges they pay to stall associations to get their plates washed…

Reference

  1. Grab allegedly pocketed 50% off the cost of a food order made over Grabfood. What happened here? (https://mothership.sg/2020/04/grabfood-commission-rate-explained/)

Finished food Safety Course (FSC) Level 1 via NTUC Learninghub

The class started at 9.00. There were 10 participants. Some had problem accessing Zoom and accepted later. The instructions given were the following:

  1. Switch video on all time. If you are using Tab or phone, prepare another device to access the online assessment (Canvas, https://ntuc.instructure.com/).
  2. Scan QR code to update learner’s particular
  3. Save zoom link somewhere accessible in case participant get booted out due to poor connection.
  4. Assessment will be the following
    • 25 multiple choice questions (MCQ)
    • 5 short answer questions
    • Practical session, e.g., oral questions and demonstration (hand washing and food handling)

The agenda of the lecture is about personal hygiene, safe ingredients, handling, storage, and overall cleanliness.

Practical food handling

Prepare the following: glove (or chopstick, tongs), container (with ready to eat food), and serving plate.

The instructions: transfer the food from the container to the plate. Response: wear glove, open container, take the food and place on plate.

The instruction: receive the money. Response: take of glove to receive money.

Oral questions (with photos)

  1. Items to wear at workplace? Covered shoe, cook hat, apron, and/or head net cap. Inappropriate ones are slippers, torn and tattered aprons, and jewelry.
  2. Proper PPE? Anti-slip covered shoe, apron, and cook hat
  3. Placement of ready to eat and raw food in chiller? Ready to eat at top and raw food at the bottom.
  4. Store canned food. Ensure item is not expired or physically damaged (e.g. dented).

The course takes 7.5 hours, with intermittent breaks at 10 min. Lunch from 12.00 to 13.30. I think the course can be shortened, especially when the course material is given to participants earlier for reference. By then, participants would be ready for the test.

The course material is 135 pages long but the content is easy and fast to follow. The 8-step hand wash requires more practice.

Note that the trainer will help participants to understand and pass the course. This course’s main purpose is to help improve participants’ understanding about proper and safe food handling. It is not out to fail (if participants really understand the topic).

Reference

  1. Food Safety Course (FSC) requirement to work in food and beverage (F&B). How to register (https://siekitchen.com/2020/12/24/food-safety-course-fsc-requirement-to-work-in-food-and-beverage-fb-how-to-register/).

Food Safety Course (FSC) requirement to work in food and beverage (F&B). How to register.

It is mandatory to have food safety course before one is allowed to work in F&B. The purpose of the course is to educate food and beverage handlers the good practices to ensure that F&B is safe for consumption. It minimizes the risk of contamination and poisoning.

NTUC Learninghub has online course about the above subject (i.e., Food Safety Course). It is a 7.5 hours course with assessment methods e.g., mcq, practical assessment, oral, and others. There are  parts, i.e., good  personal hygiene, safe ingredients, handling, store, housekeeping. Upon completion, participant will receive statement of attainment (SOA) from Skillfuture Singapore (SSg, refer to ref. 1-2).

Food Safety Course level 1 (since 30 Nov 2020) is administered by Singapore Food Agency (SFA) and Skillfuture Singapore (SSg). It was formerly known as “Follow Food & Beverage Safety and Hygiene Policies and Procedures” course (aka Basic Food Hygiene course or Food Safety and Hygiene level 1, refer to ref. 2).

Fee and payment (refer ref. 1). Supports are available, e.g., Union Training Assistance Programme (UTAP) and skillfuture credit (for Citizen). For Skillfuture credit claim, go to link (ref. 4) for FSC level 1 online learning. Click ‘claim skillfuture credit’. Login via Singpass. Follow the instruction to get the ‘claim id number’. An NTUC Learninghub representative will email you a link for claiming via skillfuture credit, complete the online form and paste the ‘claim id number’. Done.

Course schedule (ref. 3). Currrently, there is online course from NTUC Learninghub via Zoom. Book your slot and a representative will contact you asap to assist you. If you are new to NTUC Learninghub, you may need to provide personal information. Note that I don’t like to provide personal information over email.

UTAP: supports 50% course fees up to $250 per year.

Update: I have completed and passed this course (ref. 5)

Reference

  1. NTUC Learninghub mandatory Food Safety Course level 1 (https://www.ntuclearninghub.com/course/follow-food-and-beverage-safety-and-hygiene-policies-procedures/?gclid=CjwKCAiA8ov_BRAoEiwAOZogwfPB6_-p54rjNaAnCytjPC7_sOU_-tz0KIhFgBR23KE2MaECYNVJGRoC-J0QAvD_BwE)
  2. WSQ Food Safety Course Level 1 (https://www.eduquest.sg/courses/course/wsq-food-hygiene-course?gclid=CjwKCAiA8ov_BRAoEiwAOZogwQnuucZS519ItWQdb-XL8c4KuYN6sjiGMMruyi7kws3AhMZjjDe2mxoC9fQQAvD_BwE)
  3. NTUC Learninghub course schedule (https://www.ntuclearninghub.com/course/food-safety-course-level-1-synchronous-elearning/?action=schedules)
  4. FSC level 1 (synchronous e-learning), code tsg-2017501339 (https://www.myskillsfuture.sg/content/portal/en/training-exchange/course-directory/course-detail.html?courseReferenceNumber=SCN-200409359E-01-CRS-Q-0031336-FSS)
  5. Finished food Safety Course (FSC) Level 1 via NTUC Learninghub (https://siekitchen.com/2020/12/30/finished-food-safety-course-fsc-level-1-via-ntuc-learninghub/)

How to waive UOB credit card membership fee

My membership fee was charged on Oct. The fee is around $200. I spent quote regularly using the card.

I have applied for waiver previously and it was approved.

To apply for a waiver, call the UOB personal banking number at 18002222121. This is an automated call management system. From the selections, you will be directed to credit card waiver. It will ask for your credit card number followed by hash key. It will ask for your phone number followed by hash key. The automated voice will inform you that your application will be reviewed.

Costs incurred to hawkers

Study on the above topic will help most hawkers. For example, cost components for average hawker stall and other information conducted by Ministry of Trade and Industry (MTI) is important (ref. 1).

It suggested that raw material played the most cost for average hawkers, whereas rental contributed about 12% and utility at 9.3% (both at 21.3%).

Fig. 1 Cost component of average hawker centre (dated 2015; ref. 1)

As mentioned previously, the average cost of rental is $1500 with a range of $5 to $5000 (as offered bids; ref. 2). If a business operates daily without rest, then this translates to $1500/30=$50 per day from rental. Assume 12% rental cost is true, then total cost is $50/0.12 = $416. If daily total cost is true, then the cost of utility and rental would be $416 * 0.21 = $87.36. If raw material is approximately 60%, the cost is $416 * 0.6 = $250. Daily, a hawker would be spending $337.36. The rest is manpower and other service fees at approximately 20% (which is variable, because manpower could be business owner’s fixed salary and other service fees are variable).

To break-even, a business needs to achieve $337.36. If a bowl of product is $3, then the business owner needs 113 bowls per day. Subsequent bowls would be operating profit.

If I am to start a business in a location selling a dish, I will first determine the following:

  • Average footfall in the location per day (and especially compared during weekends)
  • Average peak time per day in hour.
  • Number of competitors
  • Average price of similar product around the location
  • Seats available
  • Parking area
  • Type of customers, e.g. workers, students, or other market segment.
  • Other marketing strategies.
  • Operations consideration, e.g. storage, freezers, footprint (sqm), process area (or kitchen), payment method (cash or cashless), and stall service provider (their efficiency), stall hygiene level (study the NEA awarded hygiene level, should be above Silver level; ref. 3)

Reference

  1. Examining the cost drivers of hawker food prices by MTI (https://www.mti.gov.sg/-/media/MTI/Legislation/Public-Consultations/2015/Examining-The-Cost-Drivers-of-Hawker-Food-Prices/fa_1q15.pdf)
  2. Hawker stall rental using bidding system is flawed (https://siekitchen.com/2020/05/16/hawker-stall-rental-using-bidding-system-is-flawed/)
  3. New food hygiene recognition scheme to replace existing grading system (https://www.channelnewsasia.com/news/singapore/new-food-hygiene-recognition-scheme-to-replace-existing-grading-10446030, 19 Jun 2018)

Hawker stall rental using bidding system is flawed

Bidding is a process where the person with the highest price wins the thing that is offered.

National Environmental Agency (NEA) of Singapore is body that offer the tender for bidders (ref. 1).

Bidding is susceptible to spikes and outliers, e.g. a lady who bidded $10,028 per month for a hawker stall to sell drink. According to NEA, the average price is $1,500 within a range of $5 to $5,000 (ref. 3). This would mean that the rental is $1,500 +/- 20% or from$1,200 to $1,800. That is considered very high for a stall.

It is also susceptible to those bidders who are out to win the bid and then sublet or assign the winning at higher price to others. NEA said they ensured that sublet and reassignment are not allowed, but did not elaborate how they will monitor and control this.

For more information refer to ref. 4.

Reference

  1. NEA tender notice (https://www.nea.gov.sg/corporate-functions/resources/tender-notices)
  2. Bidder ends deal on record $10,028 monthly rental bid for Chomp Chomp hawker stall (https://www.straitstimes.com/singapore/10028-monthly-rental-bid-for-chomp-chomp-hawker-stall-highest-in-3-years-bidder-walked, 30 Aug 2018)
  3. NEA adopts transparent tender system for hawker stalls (https://www.nea.gov.sg/media/readers-letters/index/nea-adopts-transparent-tender-system-for-hawker-stallshttps://www.nea.gov.sg/media/readers-letters/index/nea-adopts-transparent-tender-system-for-hawker-stalls)
  4. Information for stallholder (https://www.nea.gov.sg/our-services/hawker-management/information-for-stallholders)

Hawker profit margin analysis, real experience

Introduction

CNA highlighted an article about profit margin of hawker. The piece was written by a Fishball noodle seller, who claimed that a bowl of his Fishball noodle had only 20-30 cents profit margin.

There was no sharing of his cost breakdowns, revenue and other financial data to help readers. For example, operating revenue is revenue – all costs. Costs included cost of goods sold (direct cost) and indirect costs (e.g. rental, utility and others).

If Desmond wanted to know his net profit, he would need to discount any loan interest, and subsequently income tax. That would be his net profit!

Profit is subjective

Desmond Ng does not represent all Fishball noodle sellers. That is because, to be a successful business owner, you have to be resourceful. That said, you need to reduce costs (either by sourcing for suppliers and drafting long-term contractual agreement with them), and operate more efficiently.

Instead of lamenting low profit margin, he should be differentiating his product. If he can differentiate his product to be more than just Fishball Noodle, he will be able to price his value-added plate higher.

Instead, he is attributing customers as the main reason his profit margin is low. His reasoning that customers are reluctant to pay more is flawed. Customers compare and select. If there are other Fishball noodle sellers selling at a particular price, they expect the price to be within that range, else they have avenue to select and abandon those who priced more. That is what supply and demand works.

Real experience

To be able to assess and analyse the claim that hawkers’ profit margin is low, I have to get into the industry myself.

This is part 1 of my research.

Reference

  1. Profit margins for hawker fare? As low as 20 to 30 cents (https://www.channelnewsasia.com/news/cnainsider/profit-margins-for-hawker-centre-fare-as-low-as-20-to-30-cents-10948414, 20 Nov 2018 by Desmond Ng). Note that Desmond is a Fishball noodle seller who shared his personal profit margin.

orange carrot cake

ingredients

ingredient A

  • 1 2/3 cup flour
  • 1 1/2 tsp baking soda
  • 1 1/2 tsp ground cinnamon
  • 3/4 tsp baking powder
  • 1/2 tsp salt

ingredient B

  • 2 eggs
  • 1/2 cup sugar
  • 1/2 cup dark brown sugar
  • juice of 1 orange (70 mL)
  • 1/4 cup canola oil

ingredience C

  • 2 carrots grated
  • zest of 1 orange

steps

  1. preheat oven 180oC
  2. combine A. set aside.
  3. in large bowl, on medium speed, beat eggs until blended. add in sugar, beat, 2 min. on low speed, beat in orange juice and oil
  4. add in A and stir until combine
  5. stir in C
  6. pour batter into pan and top with almonds
  7. bake 2 min
  8. lower temperature to 160Oc and bake 25 min until cooked
  9. cool in pan, 10 min
  10. invert cake and cool completely