DUBAI: Restaurants around the world have either had to shut their doors or reduce their capacity in response to the COVID-19 pandemic.
Most have switched to fulfilling online deliveries and takeaways, but with high commission rates it is not the most profitable stream of revenue.
In Dubai, where dining out is one of the most popular forms of socializing, the impact of the coronavirus crisis has been amplified by the middleman’s cut of the profits.
While the population is under curfew, restaurant kitchens are still open, cooking up meals for consumers who order via apps such as Uber Eats, Talabat or Deliveroo.
In a bid to help the restaurants capture more revenue from each order, one food blogger who goes by the pseudonym Food Sheikh launched a “support local restaurants” campaign and deliverdxb.com, a commission-free website that allows consumers to order directly from the restaurant.
“I made a plea on behalf of the restaurant community to all the third-party delivery aggregators who’ve done such a wonderful job in providing a really great, user-friendly delivery experience, and asked them if they’d reconsider reducing or waiving the commission charges that they impose on all their restaurant partners,” he said.
These charges can be as high as 35 percent of the value of the order, which means restaurants find it difficult to make viable profit margins from just delivery orders.
It was a plea that failed to yield results from the delivery aggregators, but one startup, Chatfood, did get in touch.
Based in Dubai, Chatfood’s technology enables direct ordering from a restaurant’s website and social media channels.
The company does not charge a commission, but instead a monthly subscription fee, and its founders stepped forward to build deliverdxb.com.
“They offered to build this website that would list any restaurant that had the facility to accept direct online deliveries. Within a couple of days we had over 300 restaurants, and now we’re at more than 1,000,” said Food Sheikh.
“The big lifeline at the moment is delivery and takeaway, and this is clearly the strategy that restaurants are taking now. They’re re-engineering their menus to fit a delivery model,” he added.
“Any amount of revenue is going to help them pay the most critical of bills and costs, and hopefully give them enough of a pulse to be able to ride out this crisis.”
The response from the restaurant community has been positive, with interest coming from other cities in the region too.
“We’ve had restaurants that have said their direct orders have matched those coming in from big aggregators, which is really, really positive,” Food Sheikh said.
“Others have had their orders triple, and some have had to close because they’ve had so many orders come through. This is all really positive feedback.”
Deliverdxb.com has helped to highlight the financial struggles that restaurants face in Dubai, and the movement to have commissions reduced to 10 percent has picked up on social media recently.
As a result, Careem announced a 15 percent reduction in its commission fees for its own food-delivery platform Careem NOW.
“This pandemic has stopped their (restaurants’) air supply. If a restaurant doesn’t survive this, it’s not necessarily a reflection of them as a business. Some of the best, most popular businesses aren’t going to survive this,” said Food Sheikh.
“I’m not sure what we’ll be left with, but I know restaurateurs. They’re resilient, passionate, stubborn and creative,” he added.
“Chances are they’ll rise from the ashes of this pandemic and rebuild in some form or another.”
- This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.