Coronavirus: Food delivery aggregators ‘operating like a mafia’
David AbiDaoud has called on restaurants to turn off the apps for three days
Calls for food delivery aggregators to do more have been ramped up further, with one digital marketing expert saying they are “operating like a mafia”.
David AbiDaoud, whose wife owns and operates Mezza Lebanese Kitchen in JLT, wrote an article on LinkedIn in which he bemoaned delivery platforms refusal to review their current business model, instead saying they “have proven to be selfish and greedy”.
Speaking to Caterer Middle East, AbiDaoud said: “It's extremely important that the delivery platforms connect with all companies. It's their chance to build a strong community and brand trust with the restaurants. It needs to be a two-way conversation - so far it’s been one way. I’ve spoken with many restaurant owners and to date, they reached out to the aggregators and its falling on deaf ears.”
AbiDaoud did highlight the efforts made by both Talabat and Zomato with their business community plans released in the past week, but said that can only be “step one”.
“The aggregators, together with owners need to create a positive think-tank of some sort to ensure the solution and pricing model is mutually beneficial for all parties; (customers, restaurants, and aggregators) - for the foreseeable future. Otherwise we will start seeing restaurants close in 2-3 weeks.”
Using the hashtag #MakeThemListen, AbiDaoud has called on restaurants to remove themselves from app aggregators on April 14-16, which he said has received a positive reception from restaurateurs.
Likening delivery platforms operations to that of the mafia in his LinkedIn article and accusing them of using “psychological scare tactics”, AbiDaoud said: “The mafia would use extortion schemes to tax business owners – their message would be how they would protect to make sure the business keeps making money from criminals where they were the criminals. This is exactly what the food app aggregators are doing with more elegance. Their sales pitch is – ‘we will save you money, promote your business, reduce your driver overhead and make you more money…. it will cost you 30% of every order’. When the restaurant tries to negotiate the commission – the response from the food app aggregator is, ‘if you are exclusive with us we can see what we can do, but can’t promise you’ or ‘if you're not exclusive it's going to be tough for me to convince my bosses to give you a better deal, most likely your commission will be 35%’.”
AbiDaoud told Caterer that “restaurants understand the value of aggregators but when they don’t listen or respond you have to ask the question – do they value the restaurants?”
Until a long-term solution can be put in place, AbiDaoud asked food delivery aggregators to put in place four steps:
• Reduce last-mile commission to 15%
• Eliminate delivery fees for customers
• Eliminate or reduce the restaurant managed offers
• Food app aggregators manage the offers (keeping them at a limit) capping it and absorbing the discount (temporary)