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.
In this oped by Food Sheikh, a Dubai-based restaurant critic who launched DeliverDXB in partnership with Chatfood, which offers restaurants a subscriptions-based model as opposed to commissions, he passionately explains the unsustainable nature of the current food delivery model.
Delivery aggregators have spent billions of dollars to become everyday extensions to our daily habits, to become an app transaction performed without thought or curiosity. A reflex of muscle memory triggered by hunger, cravings, and discount notifications.
Once hailed as a triumph of technological disruption and a betterment of modern-day living, these aggregators are starting to show some uncomfortable truths. Once you begin to scratch the surface and look behind the pretty app and its clever algorithms, it becomes harder to justify their continued use. The business model and practices of these apps towards both delivery workers and restaurants worldwide have led governments to introduce new laws and policies to keep them in check.
After pure stubbornness and unflinching compromise forced their Covid hit restaurant partners to accept the high commissions they charge, these aggregators have now stumbled headfirst into another firestorm, one that is arguably more intense than the first.
It is one thing to charge high commissions from vulnerable businesses, but it is a whole different ball game when it comes to the treatment of humans and their livelihoods. In the last few weeks, the UAE services of two major delivery aggregators have been affected due to their workforce refusing to work.
News spreads fast – hundreds of orange or blue-uniformed men and their bikes make for impactful imagery. It got people thinking, scratching the surface to find out more, mainly because this is a country where such protests are almost unheard of and strikes are illegal.
Another strike in the UAE, the 2nd this month in a country where strikes are rare and furthermore illegal.— Séamus Malekafzali (@Seamus_Malek) May 9, 2022
Drivers for Talabat, an Arab food delivery service, are refusing to work tonight and are demanding higher wages. pic.twitter.com/d2vF2TbVcO
However, scratching the surface is the last thing these aggregators want their convenience-dependent users to do.
The very survival of these apps is based on our reliance on them. They need to be needed, to be depended on. However, they don’t want to be thought about or studied too closely. Dependent but unaware – the perfect user. Use me, but don’t notice me. Need me, but don’t question me. Rely on me but forget me till your next meal.
What they found was a workforce of drivers, many with endless tales of struggle and frustration, pleading with these well-funded tech giants not to reduce their delivery commissions, the lifeblood of their families back home.
These are the men who supported the whole city during the lockdown, alone on empty streets, delivering groceries and food to families that were too scared to leave the safety of their homes. We scream at these men on the road for reckless driving, yet they are driven by an incentive model that rewards speed, so every trip they make promises a better life. Or perhaps ends one.
Over Eid, Deliveroo drivers learned that their commission was dropping from $2.86 to $2.25 per delivery with longer working hours. Further details emerged directly from the social media savvy drivers themselves, determined for their voices to be heard. Visa cost repayments, rising petrol costs, fines, 14-hour days, and difficulty finding toilet facilities they were allowed to use.
More drivers followed suit a few days later, this time from another aggregator, Talabat. The same complaints, but with a meagre $2.06 per delivery instead.
“The salaries are too low and petrol is too high. This is a problem — everyone stopped work,” said one rider at Talabat speaking to the Financial Times, who did not want his name to be published. Last year he “made Dh2,500 ($681), now it is Dh1,500 [a month].”
A Talabat spokesperson issued a response to the situation:
“We are committed to ensuring riders can continue to rely on our platform to provide for their families having decent stable gross monthly earnings of around Dh3500 on average. Until last week, rider pay satisfaction was well above 70 per cent, and we haven’t updated our payment model recently. We understand economic and political realities are changing constantly, and we will always continue to listen to what riders have to say. On background – we do not believe this is a constructive way to ask for improvements, and it is something we strongly oppose, not to mention that it goes against the regulations of the UAE.”
After the protests, UK-based Deliveroo dropped its plans to cut salaries and extend working hours.
Technically, these drivers are not employees of the aggregators. They are third party contractors, hired by transportation firms that sign service agreements with the aggregators. That nuance shouldn’t allow for any moral distance, however. They still wear the brand colours of the aggregators.
It is important to note that not all aggregators are created equal. For example, Locale, the local aggregator that represents brands like Freedom Pizza, Viking Bageri, Wildflower, Itadaku and Nightjar, has a very different business model. Its drivers are fully employed and enjoy all the perks of a contracted position. They are cross-trained, so on down times, they are used elsewhere in the business, and are under no pressure to “beat the clock” when delivering food. By using efficiencies in food preparation, Locale is able to deliver quickly, safely and ethically.