Singapore

Deliveroo may introduce dynamic pricing for menu orders

It would be first food delivery service to do so in S'pore

Deliveroo may become the first food delivery service here to introduce dynamic pricing for orders off a menu, according to recent changes to its terms of service.

The addition, in March, states that Deliveroo "may operate dynamic pricing some of the time, which means that prices of menu items and delivery may change while you are browsing".

Changes to prices will not affect orders in process, provided the order is completed within two hours of creating the basket, it said.

A spokesman said the updated terms clarify how customers are charged, as prices of items may change depending on the promotions on offer.

Deliveroo currently does not have dynamic pricing for menu items, but the company did not respond on whether it plans to introduce it in the future.

Deliveroo chief operating officer Rohan Pradhan announced the British-based company's plans to experiment with dynamic pricing at the Restaurant Conference in London last September.

He reportedly told industry leaders this could entail consumers getting a discount during quiet periods but getting charged more during bad weather.

Earlier this year, Deliveroo switched from a flat $3 delivery fee to a "variable" fee based on factors such as distance and the time it takes the rider to deliver, said Deliveroo Singapore's general manager Siddharth Shanker.

Dr Seshan Ramaswami, associate professor of marketing education at Singapore Management University, said to most consumers, the term dynamic pricing has a strong connotation of pricing that changes in real time as a response to demand and supply conditions.

Many have come to understand the term through transport pricing, which can change from hour to hour, or even minute to minute, he said.

But when applied to food menus, dynamic pricing could be a way to entice patrons to order in during non-peak times.

Foodpanda Singapore, which has 6,000 restaurant partners, has no plans to introduce "surge pricing", either for delivery or menus, said managing director Luc Andreani.

A spokesman for GrabFood, which has more than 5,000 merchants on board its platform here, said it has no plans to introduce dynamic pricing for menu items.

Lawyer Eugene Thuraisingam said any significant changes to how prices are calculated must be communicated clearly to customers.

"Deliveroo's official response suggests that dynamic pricing for menu items may be introduced in the future, and if and when it is, this should be brought clearly to its customers' attention.

"If they are saying that this change doesn't amount to introducing dynamic pricing for their menu items, then if in future they do decide to introduce dynamic pricing for their menu items, they will have to issue a separate notice," he added.

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Food & Drink