The controversial and unsustainable nature of food delivery

  • Date: 13-May-2022
  • Source: Wamda
  • Sector: Agriculture
  • Country: UAE
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The controversial and unsustainable nature of food delivery

Over the past few weeks, delivery drivers for both Deliveroo and Talabat in Dubai have refused to turn up for their shifts, demanding better pay and working conditions. 

Food aggregators have in recent years come under fire for the rates of commission they charge restaurants per order (roughly 30 per cent), but now, we are seeing the concern shift to those of the delivery drivers, from concerns over safety to fair treatment. 

The food delivery sector is one mired by high cashburn rates and a long and difficult road to profitability. Restaurants on these platforms are incentivised to offer discounts in order to gain visibility and attract custom while delivery fees are kept unfeasibly low in order to encourage customers to order. The cost of delivery in the UAE is about Dh25 ($7) per order, yet customers pay on average Dh7 ($1.90) in delivery fees. The drivers delivering these orders are paid a little over $2 per order (and are expected to cover their own fuel and penalty costs). At every stage of the process of ordering and delivering food on these aggregator platforms, a loss is incurred, one that is usually subsidised by their investors. 

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