UAE restaurateurs urge food delivery apps to cap commission amid coronavirus
'This isn’t a Titanic-like Rose and Jack scenario,' says one cafe owner, 'we can all fit on the raft and stay afloat if we support one another'
More and more people are relying on delivery for meals, and more restaurants are relying on take-outs for income, with people in self-isolation and quarantine to help control the spread of Covid-19.
In recent weeks, the spotlight has been placed on delivery services, and the commission cut they take.
While it is standard practice for third-party services to take a cut from restaurant orders to fund their business models, restaurateurs are calling on such providers to revisit their percentages amid the current pandemic.
However, despite vocal resistance, delivery apps are yet to waive or reduce their commission fees – many take up to 35 per cent commission per order, on top of the specified delivery fee paid for by the customer.
“Although I fully support [restaurants moving to a delivery-only business model], this has created an undue advantage for delivery aggregators who have only attempted to reduce the cost to customers but maintained outrageous commissions to local restaurants at 30 to 35 per cent,” says Sheikha AlMheiri, founder of Mad Hospitality, which runs Jumeirah eatery Society Cafe and Lounge, and Mirdif restaurant, Toplum.
AlMheiri is calling on the apps to cut fees to 10 per cent, in a bid to support struggling restaurants.
“I urge the respective regulatory bodies to impose a mandatory cap on those commissions at 10 per cent during this period until the playing field is levelled again for all stakeholders,” she says.
Her plea has been echoed by Monique Belle and Didi Browne, the founders of JLT Caribbean restaurant Oh Brgr, who add: “A reduction on commissions would not only help your partners, a term heavily used when on boarding brands, but will also show us, your partners, that we are truly in this together.”
Tania Lodi, the founder of Tania's Teahouse, is also backing the #Cap@Ten campaign.
She says: “Our only option is to partner with delivery channels, however, with a crippling commission to cover as well as mandatory discounts, our profit margins are weak.
"This isn’t a Titanic-like Rose and Jack scenario; we can all fit on the raft and stay afloat if we support one another.”
In the meantime, AlMheiri suggests that customers try to order from restaurants directly, whether that is by phone or on their websites.
There are a number of UAE restaurants that already offer online delivery directly through their websites, including 800 Pizza, Circle Cafe and Bagel Yard.
On Sunday, March 22, Dubai food blogger Foodiva penned an open letter, launching the #UAERestaurantsUnite campaign.
“With commissions from you as high as 35 per cent – it’s practically impossible for these F&B outlets to continue to keep afloat, many of which are small, independent businesses responsible for countless livelihoods,” Samantha Wood, the founder of Foodiva, wrote.
“I urge you all to prioritise corporate social responsibility and put benevolence high on your agenda right now. Waive, or at least drastically slash your hefty commission rates at this time of crisis – and as many a case study shows, you will reap the financial benefits long term. Otherwise, the F&B industry will crumble, as will your business.”
Margaret and Adam Zargar, the founders of Chia Jar, a service that delivers chia pots across Dubai, hope there could be a long-term positive impact if new regulations come into force now.
"If Covid-19 has taught us anything, it is that we are connected and decisions we make today affect us all in the long turn,” they say. “If delivery apps help us by reducing commissions by 10 per cent then, in the long term, they will build trust and be rewarded."
What are third party delivery apps doing?
In light of current circumstances, a number of third party apps have issued temporary orders to help the food and beverage industry. Talabat has announced that it will waive delivery fees based on consumers proximity to a restaurant, regionwide.
Uber Eats has launched a similar initiative. “We know the coming weeks will be challenging for many local businesses, and that’s why in support of our local community, delivery fees are waived for customers on orders from all local restaurants across the UAE until further notice,” an Uber Eats spokesperson told The National. “We’re also promoting local restaurants to users in-app and through email marketing to drive people towards local restaurants.”
Careem Now, which launched in December 2018, has slashed its commission by 15 per cent. The Careem spokesperson declined to reveal the exact original commission, but stated it was between 25 and 35 per cent.
"Careem pledges to assist its partners, customers, and captains during these confusing times," read a statement from Gheed El Makkaoui, general manager at Careem UAE.
"Being a leader in the delivery industry, we need to be the supporting force behind our communities and our partners to push through this phase and ensure the business continuity of local merchants on our platform."
The National has reached out to Deliveroo and Zomato for comment.
Updated: April 1, 2020 01:10 PM