Some breathing space for UAE's F&B operators... Dropping commissions on food delivery could set off a wider trend in the delivery space. Image Credit: Bloomberg

Dubai: UAE's restaurant operators are getting some help - noon and Careem have dropped their commissions on all their deliveries.

In fact, Careem has cut its commission down to zero - “The traditional commission model in food delivery has become unsustainable for restaurants, especially as deliveries have become a large percentage of their business," said Mudassir Sheikha, Careem's CEO.

"We are launching a new business model that can help restaurants thrive in this new environment while being sustainable for us. We believe the new model gives restaurants of all sizes fair and transparent pricing to profitably grow while offering customers a more responsible choice."

Careem's decision will immediately filter down to the bottom-line of its 10,000 restaurant tie-ins.

Bone of contention

The commission structure has been an issue with local F&B operators, who have said that these charges – in some cases extending 20-30 per cent and even more – were hurting their chances. Especially as they experience low-to-medium dining in.

In fact, some of the F&B operators had come together to launch their rival delivery apps and with low charges. 

Careem will now offer a fixed monthly charge to restaurant partners that replaces the percentage-based commission "food aggregator apps conventionally charge".

"Restaurants have become increasingly vocal about the negative impact high commissions are having on their business as some apps in the industry now take 30 per cent - or even 35 per cent - of each order’s value," Careem said in a statement.