How restaurants are paying a heavy price for delivery apps

Every meal ordered through a delivery app in Kuwait carries an extra burden, with platforms deducting more than a quarter of the bill. What started as a service connecting customers with restaurants has evolved into a costly necessity.

Today, restaurants are losing profit margins, and customers are paying higher prices, with the justification often being: “The app takes its share.”

The Kuwaiti food delivery market has undergone a dramatic shift with digitalization. By the end of 2024, the number of online orders surpassed 2.6 million per month, with more than 72 percent of consumers using smartphone applications as their preferred ordering method. Peak usage occurs between 7 and 9 p.m., highlighting the centrality of these apps in daily life.

This growth has also fueled the rise of cloud kitchens, which jumped from 77 in 2022 to 120 in 2024. These delivery-only kitchens reflect a new flexibility in the market but have also intensified the pressure on traditional restaurants, which struggle to absorb both operating costs and the high commissions charged by platforms. Many establishments have been forced to increase menu prices or reduce meal sizes to survive, reports Al-Qabas daily.

The dominance of delivery platforms has reshaped Kuwait’s consumer landscape. By late 2024, apps accounted for over 62 percent of food service revenue, while the number of fast-food restaurants exceeded 1,250, recording a 14 percent increase in foot traffic compared to the previous year. The greatest use of delivery services comes from dual-income households and young adults aged 20 to 35, who make up around 55 percent of users.

Supermarkets have also played a role in strengthening app dependency, adding more than 950 ready-to-eat and instant products to their shelves in 2024. These options have reinforced consumer reliance on delivery platforms, cementing their place as the vital link between kitchens and households.

Yet the most contentious issue remains the commission structure. Delivery platforms in Kuwait deduct between 25 and 30 percent from each bill—a rate far higher than the global average of 10 to 15 percent. This erodes the already slim margins of restaurants, leaving them with little choice but to raise prices or cut portion sizes. The result is an added cost for consumers and a compromised dining experience.

Moreover, restaurants often carry the blame for mistakes or delivery delays, despite apps controlling the logistics. With few alternatives and limited regulatory oversight, platforms have established a near-monopoly over a sector that directly affects daily life.

Financial projections suggest the online food delivery market in Kuwait reached $880 million in 2024, with expectations to hit nearly $1.43 billion by 2032, growing at a compound annual rate of 6.3 percent. This expansion is driven by higher incomes, remote work habits, cloud kitchen proliferation, and a broader digital transformation in line with Kuwait Vision 2030, which prioritizes logistics and modern business models.

Industry experts and restaurant groups have proposed several remedies to restore balance. These include capping commissions at international levels, enforcing transparency in contracts, encouraging new platforms to enter the market, and requiring apps to disclose fee breakdowns on invoices. Other suggestions involve collective bargaining by restaurant owners, direct delivery services managed by restaurants, and using social media and websites to attract orders outside the app ecosystem.

Sector insiders point out that delivery platforms act as “obligatory partners” to hundreds of restaurants without investing in operations or sharing risk. Their commissions are deducted upfront, regardless of whether a restaurant is profitable or in debt, guaranteeing steady platform income while leaving owners exposed to losses—even to the point of bankruptcy.

Legal experts stress that Kuwait’s laws already criminalize monopolistic practices, including artificial price inflation and market dominance. The Competition Protection Law prohibits price-fixing agreements, unfair conditions imposed by dominant players, and actions that obstruct new competitors. Nevertheless, enforcement remains a key challenge in curbing the unchecked power of delivery apps.

In Kuwait’s evolving food economy, delivery platforms have become indispensable yet controversial players. Their rapid growth reflects changing lifestyles and technological convenience, but unless balanced by regulation and fairer terms, the cost of convenience will continue to be borne by both restaurants and consumers.

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