Singapore competition starts regulating food-delivery services

Singapore’s competition regulator has effectively cleared the activities of food-delivery platforms and dark kitchens in the city-state after a 10-month probe.

The investigation by the Competition and Consumer Commission of Singapore (CCCS) began on September 30 last year after concerns were raised that food-delivery services were refusing to work with dark kitchens operated by rivals. (Dark, or virtual, kitchens are where meals are prepared for delivery or takeaway with no seating for customers.)

CCCS says that conduct has since ceased and while it will continue to monitor online food delivery and virtual kitchens, it has no cause for concern at this time.

“CCCS notes that competition in the virtual-kitchen sector remains dynamic, with players entering and competing for market share,” the organization said in a statement posted online.

Singapore’s online food-delivery industry is highly competitive with three main operators battling for market share:  Deliveroo, Foodpanda and GrabFood.

Each has started providing virtual kitchens as an additional service to food & beverage operators. Meanwhile, Smart City Kitchens (SCK) competes with them to offer virtual kitchens to F&B companies but does not operate any online food-delivery service itself, leaving it reliant on Deliveroo, FoodPanda, and GrabFood to deliver the meals.

The CCCS launched an investigation into the sector after reports the delivery services were refusing to work with companies using SCK’s virtual kitchens.

“Following CCCS’s investigation, GrabFood and Deliveroo have started supplying their online food delivery services to F&B operators in SCK’s virtual kitchens which already have access to FoodPanda’s online food delivery service,” said the CCCS. “As a result, F&B operators using SCK’s virtual kitchens now have the choice of using multiple online food delivery providers to expand their consumer reach.

“There is greater competition in the virtual kitchen sector, and consumers are also able to enjoy a greater choice of food ordered online. With greater competition, businesses are incentivized to innovate to cater more efficiently to the evolving needs and preferences of their customers.”