UAE restaurants launch own delivery app to cope with delivery aggregators
Restaurant operators across the UAE are actively working on raising awareness among customers about the struggles that they continue to face with the high commission rates charged by delivery aggregators during the Covid-19 pandemic.
Speaking to Khaleej Times, Naveed Dowlatshahi, CEO of GoFood, explained that the average customer has no clue that up to 35 per cent of the order value is actually being charged by food delivery aggregators. Additionally, the discounts being offered on popular food delivery apps are also paid for by the restaurant operator and not the app.
"Imagine the pressure that restaurants face when they are offering anything up to a 50 per cent discount, in addition to the 30 per cent commission - what is left for the restaurant?" Dowlatshahi asked.
To tackle this issue, a group of restaurant owners recently came together to launch GoFood, a home-grown food delivery app and website run by restaurant owners in the UAE.
"Third party aggregators have been taking advantage of restaurant owners like myself by charging huge commissions and imposing mandatory discounts. In addition, the Covid-19 crisis was proof they were not in this to support us in any way," said Gaurav Varma, CEO of The Royal Orchid Group of Restaurants Abu Dhabi.
"There is no way we can survive in the long-term with this arrangement," he said. "This is why we got together and decided to launch GoFood, a delivery solution by restaurant owners for restaurant owners. This is no vanity project, but a pitch for our own survival - for us to collectively take back control of our business."
Available for download on iOS and Android, GoFood was created for restaurant operators as an alternative to existing delivery aggregator apps. Currently, more than 2,000 restaurants have signed up to the platform, and the aim is to have over 4,000 restaurants live on the app by the end of the year.
"Once all restaurants are live on the app, they will vary from your local mum and pop operators to local, regional and international chains of cafes, bakeries, fast food, fast casual, casual dining and fine dining," said Dowlatshahi.
Dowlatshahi explained that the main difference between GoFood and other delivery apps is that GoFood charges a two per cent commission on orders, whereas other platforms charge anything up to 35 per cent.
"Naturally, this revenue model alone is not enough, so we do have additional revenue stream models that will be implemented over the coming months such as paid advertising opportunities on the app; unlike other aggregators we will not have any sponsored/paid listings so we will create an even playing field where restaurants are listed purely based on geo fencing and restaurant rating," he said.
There are also plans to launch a grocery solution on the app, where customers can purchase their groceries in bulk with savings of up to 30 per cent compared to the traditional supermarket model. "For the merchants, we will have a back office dashboard that will give them access to value added services such as social media management, graphic design, website design, food photography, printing requirements, packaging requirements and even restaurant audits," he said.
Dowlatshahi revealed that there is also a last mile option, which isn't mandatory, but gives restaurants that don't have their own drivers or who think that their existing last mile solution provider is too expensive, a cost-effective solution. "They can, if they want to, use our services where we charge Dh10 for the first 10Km, and thereafter it is only Dh0.50 per Km. We are also in the process of kicking off a strategic relationship with the RTA, where they will facilitate the last mile solution on our behalf."
GoFood has also launched a loyalty programme, where every Dh10 spent on GoFood, earns customers Dh1 back to be redeemed against purchases from participating restaurants.
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