Good news “Karim” reduces the delivery commission to this level

The CEO of Karim Muddassir Sheikha, a Dubai-based company that provides food delivery services, said restaurants were at a disadvantage with the increase in delivery volumes during the pandemic.

High commission rates per order made it difficult for restaurants to survive, and restaurants weren’t on good terms with delivery collectors.

“We realize that the industry is not in a good position, and we are completely changing the business model,” he added, according to “CNBC” and seen by “Al Arabiya.net”.

Uber-owned Careem announced this week that it will charge restaurants a flat monthly fee to be included in their app, rather than a percentage-based commission.

Sheikha said that food delivery companies in the region charge up to 30% of the value of each order.

This reduces the restaurant’s profit margins for deliveries, which represent “a lot of their business” as a result of the pandemic.

New business model

Sheikha explained that under Careem’s flat fee model, the actual commission can be as low as 6% or 7%.

“If the value of the demand increases, it decreases even more,” he said. “This model will help restaurants retain more of their profits, improve their offerings, and ultimately have a better customer service experience.”

He continued, “What we may lose in margins, we will compensate for it in volumes over time.”

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