THE VAMPIRE DIARIES OF DELIVERY & DISCOUNT AGGREGATORS

In the name of convenience, many delivery businesses had sprung up in the last decade and restaurants had jumped in on the opportunity to thrive their businesses and to provide their customers with faster and cheaper delivery. However, with time the lure of this economical mirage died down and restaurateurs realized that these delivery aggregators were basically vampires in disguise, sucking the blood out of others’ businesses in the form of commission and gloating in the glory themselves.

Parasiting into the UAE food business, they are demanding as much as 30-40% commission from restaurants currently and both their traction and valuation is increasing day by day. On the flip side, after eliminating 30% food costs and 40% delivery commission cuts, restaurants are hardly left with something to spare for the overheads. Owing to this, the restaurants that initially used these delivery aggregators to keep their cash flow afloat are now suffering and going out of business, slowly.

Another cause of concern for restaurants using these third-party aggregators or delivery partners is that they are getting the restaurant’s most valuable data which, if used properly, can be a boon for the restaurants’ business. Issues have also surfaced wherein the app-owners claim ownership of the data and may offer the same to rival restaurants for fiscal benefits. These delivery partners have become so monstrous that they’re now easily getting between successful restaurant businesses and their diners, hence causing a diffusion of branding. When a restaurant operates its own in-house delivery service, the entire process carries the restaurant’s brand. But when these partner apps or delivery aggregators are used, they employ drivers in uniforms for easy customer recognition, and their vehicles usually contain the same branding, impacting the restaurant’s identity and brand recognition. Unprofessional delivery partners may also taint the restaurant’s repute badly.

Moreover, the discount aggregators that promised to make to the restaurants ‘smile’, pledged to ‘entertain’ and claimed to be a ‘pro’ in their business model actually turned out to be predators on the prowl, demanding hefty commissions, dictating their irrational terms and minimalizing the profitability cuts for restaurants that opted for their services. These third party apps and companies have now immortalized themselves in the food business whereas the restaurants that wanted to generate sales through them, are on the verge of dying. This two edged sword of third party aggregators offering deals and discounts has backfired and the restaurants wanting to benefit from increased sales are now realizing that the customers only used such platforms for discounts that didn’t translate into repeat sales or brand loyalty. It is slowly dawning upon restaurant owners that these discount aggregators are cannibalizing their dine-in sales.

The profit conundrum with regards to the efficacy of these delivery aggregators has now become evident. It is like a slow bit-by-bit death wherein these third party vampires suck the life out of food businesses and achieve immortality and indispensability. In order to do away with this necessary evil, restaurants will have to bring smart initiatives and incentives for their customers, using their own platforms. However, it is easy said than done. For a system that has become addicted to revenue generation through these aggregators, a proper rehabilitation process is required. City Rewardz is the vampire slayer that may provide the restaurants with this rehabilitation service for a minimal subscription charge. We encourage restaurants to get our app installed and to manage all their orders through the same. Without having to compromise upon data privacy, substantial commissions and unreal conditions, City Rewardz will slowly pull you out of the fangs of these delivery aggregators and make your business stand tall on its own feet.