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Pizza Online ordering service accused of exploitation

Finnish pizzeria owners have accused an online ordering service of forcing out competitors and abusing the resultant near-monopoly position.

Pizza Time Leinelä. Erkan Akgül.
Chef Erkan Akgül at Pizza Time restaurant in Leinelä, Vantaa. Image: Tuomo Björksten / Yle

An Yle investigation has found that Pizza Online, a popular online service used by smaller takeaway chains in Finland, has maintained its market position by preventing restaurants from using other services while taking up to 22 percent of the purchase price of each order.

Many of those in the pizza business say the popular service is vital to their operations, leaving them no option but to pay the hefty commissions.

“Before Pizza Online we did less work but made more money,” said Helsinki pizzeria owner Kazim Çekìç.

Many say they also feel compelled to shell out for prominent placement on the Pizza Online service via a so-called ‘Premium’ subscription, which costs hundreds of euros per month on top to ensure restaurants appear near the top of the Pizza Online listings.

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Kuvakaappaus Pizza-onlinen sivustolta
Pizza Online offers a choice of local pizza parlours when users add their location. Image: Pizza-online.fi

One Vantaa pizzeria owner showed Yle a contract for the Premium service signed this year, stating that the business granted Delivery Hero Finland OY, which owns Pizza Online, exclusive rights for online ordering.

When Yle put that contract to Delivery Hero Finland, they first denied that they demanded exclusivity and then said the clause was accidentally added to contracts in 2018.

“We looked into this, and the premium-text contains a mistake on our side,” said the firm’s Marketing Manager, Nora Särkkä. “Last year we changed the software that supports our sales and customer relations. An old Premium text was fed into the system, and that has gone into the contracts for Premium purchases since then. This has been a mistake, and that practice hasn’t been in force after 2015.”

That timing is important, because the altered contract was key for the company in getting a complaint to the Finnish Competition regulator thrown out in 2017.

The complaint was filed by Joensuu pizza entrepreneur Ali Giray in 2014, after a period of ramped-up charges from Pizza Online and failed competitors.

Other delivery services such as Wolt and Foodora do not demand exclusivity, allowing restaurants to take orders from multiple different services to maximise their reach.

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Pizza Time Leinelä. Erkan Akgül.
A pizza can be purchased in most Finnish takeaways for around 8-10 euros. Image: Tuomo Björksten / Yle

Pizza Online was founded as SLM Finland by Henrik Bamford and Toni Toijanaho in 2007. Initially it focused on central Uusimaa, signing up pizzerias in Kerava, Järvenpää and Tuusula.

It expanded quickly, with turnover reaching a million euros in its second year of operation and hitting ten million euros soon after that.

In 2012 German company Delivery Hero bought the firm and according to most pizzeria owners interviewed by Yle, commissions began to creep up.

In the beginning Pizza Online took a commission of between 50 and 97 cents per order, with most orders totalling around 20 euros.

Before the firm was sold that changed to 5-6 percent of the order value, and by 2013 pizza entrepreneur Nuri Shorsh told a student researching his thesis that commissions were around 13 percent of each order.

According to figures Yle looked at from various pizzeria owners, an order received via Pizza Online can now entail payments to the firm of between 16 and 22 percent of the price paid by consumers once the ‘Premium’ payments are added in.

Businesses are contractually obliged to offer the same prices via the service and on their own website, so it is not possible to pass that cost on to customers.

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Pizza Time Leinelä. Orhanli Sinan ja Erkan Akgül.
Sinan Orhanli (left) often works more than 70 hours in a week. Image: Tuomo Björksten / Yle

This spring Sinan Orhanli, who runs Pizza Time in Vantaa, invited 30 pizzeria owners from the Helsinki region to a meeting with one item on the agenda: freeing themselves from Pizza Online.

They agreed they would all leave the service at the same time and try to manage without it. So what happened?

“Nothing,” said Orhanli. “Entrepreneurs feared that others would remain on Pizza Online and one after the other withdrew from the agreement.”

Pizzeria owners are clearly near the end of their tether, working long hours for relatively little reward.

“I know full well that Pizza Online membership is voluntary,” continues Orhanli. “But it is difficult to operate without it. I have two employees at work, but I always think that I have three. One is Pizza Online, which takes 2-3,000 euros a month in wages.”

That kind of commission has a big impact on his business, and his family.

“I have one day off a week,” said Orhanli. “Otherwise I am at work every day 10am to 10pm, 12-13 hours a day. At home I have a wife and a two-year-old daughter. Every evening she’s asleep when I get home from work.”

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