Kuwait's delivery apps squeeze restaurants and hike prices for diners

Dubai: Every meal ordered through a delivery app in Kuwait comes with an extra cost. Beyond the menu price and delivery fee, platforms now routinely take more than a quarter of each bill, leaving restaurants with shrinking margins and customers facing higher prices, accortding to Al Qabas newspaper. 

Once viewed as mere intermediaries connecting diners with kitchens, food delivery apps have grown into dominant players in Kuwait’s dining economy. 

By the end of 2024, online food orders surpassed 2.6 million a month, with more than 72 percent of consumers using smartphone apps as their preferred option, especially in the busy evening hours.

That surge has fueled the rise of so-called cloud kitchens, facilities dedicated solely to preparing food for delivery. Their number jumped to 120 in 2024, up from 77 just two years earlier, signaling a strategic shift toward faster, more flexible service models. 

Yet for restaurants, the digital boom has meant mounting costs: high operating expenses compounded by commissions of 25 to 30 percent on each order, rates far above the global norm of 10 to 15 percent.

To offset the losses, many restaurants have raised prices or cut portion sizes, passing the burden to consumers. “The app takes its share,” has become a familiar explanation in Kuwait when diners question rising bills. With limited alternatives and weak regulatory oversight, platforms now operate with near-monopoly power, dictating terms to both restaurants and customers.

The sector’s growth is undeniable. Kuwait’s online food delivery market was valued at $880 million in 2024 and is projected to reach $1.43 billion by 2032, according to GMI Research. But industry insiders say the imbalance is unsustainable. Legal experts note that Kuwaiti competition laws prohibit price manipulation and monopolistic practices, yet enforcement has lagged behind the rapid digitization of the market.

Some restaurant owners are calling for caps on commissions, greater contract transparency, and collective bargaining to pressure apps into fairer terms. Others are exploring alternatives, from cooperative delivery services to in-house fleets. Still, for now, delivery platforms remain what one operator described as “an obligatory partner”, one that contributes no capital investment yet claims its cut from every order.