Rapid rise in food delivery services adds to the peril on UAE’s dangerous roads

Booming demand for food delivery services in the United Arab Emirates has led to more delivery riders on the road, leading in turn to an increase in the number of traffic accidents already the biggest killer in the UAE, accounting for around a quarter of all deaths.

A report by international news agency Associated Press, based on local media reports, highlighted the lack of an official breakdown of motorcycle deaths. However, the authorities and companies are tackling the problem.

Dubai’s Roads and Transport Authority (RTA) is now overseeing the induction of delivery bike riders into tailor-made training courses that have been approved by drivers’ institutes.

It’s part of an ongoing effort to boost the safety and security of roads in Dubai, while regulating the business of delivery, logistics and electronic media companies.

The RTA said the move followed soaring demand for delivery services and the growth of the logistics sector in Dubai. “RTA perceived the need to regulate and govern the business of this vital sector to bring it to the highest international standards, especially in addressing safety and security concerns,” it stated.

The key components of the course include the legal responsibility of drivers, traffic rules relating to the driver, and statistics relating to traffic incidents. It also covers how to deal with different driving conditions and how to react during traffic incidents, while an assessment is made at the end of the course.

 

Road safety advice

 

Meanwhile, Deliveroo has produced a seven-point guide, entitled “Safety First”, which gives advice to delivery riders as to how they should behave on the road.

The suggestions are to maintain a safe distance of at least two car lengths between them and the vehicle ahead, and to drive within the speed limits. Using safety gear provided by Deliveroo is next, as well as advice to be “mindful of your surroundings” on the road, take extra care in poor weather, always turn on your headlights in low visibility conditions, and use indicators.

In addition, Dubai’s RTA recently published a comprehensive manual governing delivery services, produced in coordination with the Dubai Police and Dubai Municipality. The “Activity Manual for Managing and Providing Delivery Services” covers all trading establishments and firms providing the delivery of services.

It covers four key areas: circulating the safety stipulations to motorbike delivery companies; training drivers at driving institutes; carrying out field awareness campaigns; and regulating the establishment of smart platforms and apps for managing services. 

It also sets out important conditions that delivery service companies and their motorcyclists must strictly comply with for the safety of drivers, road users and the food or materials to be delivered.

“These stipulations include the traffic safety of motorcyclists, specifications of the vehicle/ motorcycle, food safety at the delivery of orders, and guidelines relating to the uniform of drivers of delivery motorbikes,” the RTA said.

 

A booming business

 

Food delivery in the UAE is booming, with revenue projected to rise 14.1% to $1.1bn this year with average revenue per customer of $355.82, according to Statista. The data also predicts growth of 6.5% in 2022, while the number of customers should reach 3.4m by 2025.

Statista highlights a global boom in online food delivery, saying: “Platform-to-consumer delivery companies like Deliveroo or Uber Eats operate a more cost-intensive business model, but are taking care of the whole delivery logistics. Those companies have also gained track over the last years, especially in densely populated regions.”

The UAE is no exception. In fact, Statista predicts user penetration of online food delivery there will steadily increase until 2024.

“From 2019 to 2020, it rose by about 5%, the single largest increase in the time period,” it said. “In 2024, user penetration in this segment of e-services in the UAE is projected to be approximately 35.5%.”

Meanwhile, research by Dubai’s Chamber of Commerce revealed online sales of food and drinks in the UAE surged 255% year-on-year in 2020 to reach $412m.

The analysis also predicted sales would hit $619m by 2025 and record a compound annual growth of 8.5% over the 2020-2025 period.

 

Driving forces

 

Technology has been a driving force in helping to transform the food and beverage sector across the entire GCC (Gulf Cooperation Council) region of Middle-Eastern states, according to analysis by the professional services firm KPMG.

Its study, entitled “Recipe for resilience”, notes the region’s “tech-savvy consumers’ ” increasingly valued access to information, convenience, and the digital experience.

“Delivery has remained one of the fastest growing segments in the region,” it says. “Nearly all operators whose concepts are delivery-friendly are listed with a delivery platform – in most cases, across multiple.”

It also points out how some premium dining concepts turned to delivery during the Covid-19 lockdown and restriction periods as it was the only way to reach customers. Nearly half the operators KPMG spoke to had seen double-digit growth in their delivery segments during 2019.

“This is not surprising, as delivery apps witnessed increased penetration and usage – more than 80% of consumers mentioned they use apps to order food in 2019,” it says.

According to the study, 22% of operators indicated that delivery constituted more than a quarter of their sales in 2019, a consistently upward trend. “Despite widespread uncertainty, the segment still has room to grow, given the preference for ordering in over dining out for at least the next six months if not longer,” it concludes.

 

Fast expansion required

 

Talabat is the No.1 food delivery service in the UAE, with an overwhelming 74% market share in the first quarter of 2021, according to Statista. Its nearest rival was Deliveroo on 22% and Careem NOW with relatively modest 4%.

However, there is pressure for leading players in the region to take advantage of the potential growth. It’s a fact not lost on Jérémy Doutté, vice-president of Talabat’s UAE division.

He outlined the company’s expansion plans during a media roundtable at the company’s Dubai office and then shared the salient points on LinkedIn.

In the first half of the year, Talabat UAE’s vendor base grew by over 40%, our online orders increased by over 90% and app downloads grew by over 100%,” he wrote. “In the second half of the year, we are looking at doubling our fleet to 30,000 riders and cutting our delivery time to 15-20 minutes as we continue to grow.”

He also insisted that faster delivery wasn’t about faster driving. “It’s about having hubs and restaurants closer to our customers and using our tech to optimise the processes and factors around delivery to make the delivery faster, but also safer,” he explained.

Talabat has also pledged to hire 300 female drivers to its UAE delivery fleet by the end of 2021 as part of efforts to improve gender equality and give women greater employment opportunities. The company said women currently account for 67% of marketing roles, 43% of the sales force, and 40% of management positions at Talabat UAE, reflecting “great strides towards empowering women” in the workplace and promoting overall gender balance.

– Rob Griffin PlatformsIntelligence contributing writer

Photo: Alex Drop

Print Friendly, PDF & Email