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Remove the service charges on consumers... UAE's F&B businesses are ratcheting up the fight to online food portals by insisting they drop these rates. And there are now UAE companies willing to work with F&B operators on fixed fee basis. Image Credit: iStock photo

Dubai: UAE consumers stand to benefit as more F&B operators insist that online order and delivery portals should stop - or reduce - the charges on consumers. Already, F&B businesses are getting some help on this.

Some UAE-based online food order and delivery portals are introducing fixed monthly charges to F&B operators in a bid to try and break the dominance of Zomato, Talabat and Uber Eats. The latter charge F&B operators on a per-order basis, and whereby their commissions end up as high as 35 per cent of each order. Plus, they also bill a certain percentage on the consumer as well.

In recent weeks, these UAE portals have doubled their efforts to convince restaurant and café owners that the fixed-rate monthly scheme would be the best cost option in the current marketplace. The F&B sector has seen their cashflow shrink by up to 80 per cent in the last month or so, and the forecasts for the immediate future are equally grim.

“So far, food aggregators such as Zomato and Talabat have been unwilling to change from their 12-35 per cent commission on each order (including delivery charges),” said Shanavas Mohammed, Managing Partner at the Golden Fork Group. “At those rates, many of UAE’s F&B businesses will not survive.”

Last week, a newly formed grouping F&B operators in Dubai said it would be launching its own order-and-delivery app to take on the aggregators. The plan is to do so in a matter of weeks. The group has promised zero charges on the customer for future orders through the app.

“The power of Zomato or Talabat derives from their vast database of users – it would be difficult initially for F&B businesses to match that kind of user base,” said an F&B owner. “But if we reduce the cost for the consumer each time he or she orders from us should eventually work in our favour.

“We assure data protection of customers and our commission will not exceed 20 per cent, which includes delivery charges, and 2 per cent without delivery . Currently all aggregators charge Dh5-Dh8 for customers.

“And in some areas, customers are complaining they are charged an additional Dh20 for deliveries.”

Fixed rate options

But the availability of more options from online F&B-focussed portals will allow F&B businesses to expand their reach. One such portal offering a fixed-rate deal is Oogo.

At Dh299 a month, “F&B owners outsource their online ordering service to us where we take care of everything,” said a spokesperson at Oogo. “The business owner can focus on the operations.

“In regards to the transaction cost, every business owner knows that there is a fee for each card transaction, whether it is done physically or online. In a nutshell, our transaction cost is the bank’s processing fee.

“We offer customers one-month free trial and then on a monthly basis.”

More such order-and-delivery businesses are likely to come up with their own fixed-rate services. One of them, which currently offers a points scheme on orders, plans to launch its delivery services shortly.

The efforts are picking up pace as the local F&B industry realises that it will take time for their dine-in and customer takeaways return back to normal. And even then it will have to be a new normal they must account for.

F&B new
The F&B sector in the UAE is in for a reset, and trying to win in the online ordering space has become a necessity. Image Credit: Gulf News Archive

There’s always WhatsApp, Insta, FB

Meanwhile, there are F&B businesses offering their promotions directly on WhatsApp, Instagram and Facebook, and thus bypass the need to tie up with the Zomatos and Talabats. “The online game can be played by all – but it needs to be done smartly if F&B businesses are to survive today,” said a Dubai-based operator. “We cannot keep shelling out cash to the food aggregators and hope to survive.”


Then, there are companies that are working towards a different payment structure.“More restaurants are integrating their Facebook and WhatsApp portals so that consumers can go through the menu and make the payment for an order directly through these platforms,” the operator added. “Technology partners such as RadYes are providing the payment gateway option to complete the transaction."

Another app that is reaching out to F&B businesses is ChatFood, where it charges a flat Dh300 month for up to 300 orders placed.

“We’re encouraging customers to order through social media platforms or technology partners such as ChatFood and RadYes,” said Mohammed. “They are actually offering relief to restaurant owners with their commission-free model.

“This way, customers are directly reaching to us without any aggregator - and they will not have to pay any additional delivery charge either.”

In doing so, if the consumer ends up paying less each time an order is placed, then everyone wins. Or almost everyone.

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