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Careem feeling generous as it waives commission on food deliveriesMENA

Careem feeling generous as it waives commission on food deliveries

Careem announced it has changed its food delivery commission structure in a bid to help the local restaurant industry. Ordinarily, they charge participating restaurants a fixed percentage, monthly, for delivering orders to hungry customers.

Though many food and beverage outlets have delivery apps like Careem to thank for surviving during the lockdown, they have been vocal about the rates being financially unsustainable at a time when home deliveries have become the lion’s shares of orders (yet another effect of COVID-19). 

But can you get something for nothing?

Careem has now implemented a new commission model that allows restaurants to opt for different pricing options, depending on the size of their business and the volumes of their orders. Or, as Careem’s UAE GM, Victor Kiriakos-Saad, put it, “Careem will accept what’s fair for our services so restaurants ultimately make more.” How nice of them!

Careem had previously dropped their delivery commission rates in December as a way to encourage people (ie influence the supply-side of the marketplace) to order more from their local eateries.

why it matters
The UAE business community has been critical of the business model of food delivery companies. Prominent Emirati businessman Mohamed Alabba recently called out food aggregators and announced he's planning to launch a food delivery app, Noon Food, which would charge more fair rates. It seems that other food delivery aggregators (cough cough Deliveroo) will have to revise their rates too in order to stay in the game.