Careem CEO discusses 0% commission food delivery model

Eateries have been at a disadvantage as delivery volumes increased during the pandemic, said the CEO of Careem, a Dubai-based ride-hailing firm that provides food delivery services.

“It really helped us survive the pandemic but, as I mentioned, what happened was the restaurants really got the short end of the stick,” Mudassir Sheikha said.

High commission rates per order were making it difficult for restaurants to survive, and eateries were not on good terms with delivery aggregators, he told CNBC’s “Capital Connection” on Thursday.

“We recognize that the industry is not in a good place, and we are changing the business model completely,” he said.

Careem, which is owned by Uber, this week announced that it will be charging eateries a fixed monthly fee to be listed on their app, instead of a percentage-based commission.

What we may lose in margins, we will make it up in volumes over time.

Mudassir Sheikha

Careem CEO

In the region, food delivery firms charge up to 30% of the value of each order, Sheikha said. That squeezes the restaurant’s profit margins for deliveries, which accounts for “a lot of their business” as a result of the pandemic.

“We saw many restaurants go under, and even the restaurants that survived are struggling to survive,” he said.

New business model

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