How to start a food delivery service business
With ongoing concerns around the effects of COVID-19 on the food and beverage industry, delivery has never been more important.
Even before the pandemic, a survey by KPMG showed that 60% of UAE consumers use an app to order food – that’s compared to just 18% in the US. The strength of the market is shown by the fact that Zomato sold its UAE food delivery arm for USD 172m, while Careem also announced plans to raise USD 150m to start a food delivery arm.
It’s easy to see why this area of the market is so popular. The UAE has a sizable population of professionals who are used to the on-demand nature of food delivery.
But with several giants already in the market – also including Talabat and Uber Eats – we’re now seeing many smaller food and beverage outlets in Dubai clubbing together to start their own booking and delivery app.
This shows there are gaps in the market for smaller, more agile, and fairer food delivery apps. This is a key development for anyone who is interested to start a food delivery service in Dubai, UAE.
This presents a great opportunity to entrepreneurs with the right skills – and you don’t need to own a restaurant or catering business. Your delivery service could simply collect food from local restaurants and deliver it. If that sounds appealing, there’s more good news – with the right support, applying for a food delivery license in Dubai can be incredibly straightforward.
Benefits of a food delivery service business
Food delivery companies can earn money in a number of ways:
Commissions: This is to be agreed between the restaurant and your company as the food delivery app that takes the order – adapting depending on size of the order or other considerations.
Delivery: When the restaurant does not have their own delivery team, then your company as the food delivery service can agree on a fee for the delivery itself, whether based on percentage or distance travelled.
Advertising: You are able to monetise by selling advertising on your app, with restaurants paying a premium to be featured at the top of the app.
Time of day: You may add a delivery surcharge during peak hours or during very late/early deliveries.
Steps to start your food delivery business
If you want to start a food delivery service in Dubai, UAE the good news is that it is easy when you work with a respected company formation specialist.
You should start by deciding on your business activity. The important thing here is that your chosen activities are in line with those on the official Department of Economic Development (DED) list.
Then it’s time to choose a company name. Be aware that you must abide by a strict set of naming conventions here in the UAE. In short, you should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e. Dave Mann Consulting, rather than D Mann Consulting. You must also check that your chosen name is available to register.
Free zone company formation is the most cost-effective and advantageous approach. The UAE is home to many free zones offering affordable license packages and fast company setup options.
Free zones such as Fujairah Creative City, for example, offer benefits including a quick and easy incorporation process, ongoing business support and financial incentives such as tax exemptions and zero currency restrictions.
With these key decisions made, you can apply for your trade license. You’ll be required to provide a few details and some basic documentation, including:
- Completed application form
- Passport copy of the proposed owner or owners
- Two colour passport size photos
Finally, unless you already have a valid UAE residency visa, you’ll need to apply for one. Just like applying for your business license, with the right guidance, the visa application process can be incredibly straightforward.
As the holder of a UAE business license, you can also sponsor others for their visas. This could be a spouse, parent or child, or a domestic worker such as a housekeeper.
Working with company formation specialists
To help you to ensure that all these steps go smoothly, it’s a good idea to work with a Dubai company formation specialist such as Business Incorporation Zone (BIZ) when establishing a new company in the UAE.
We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visas applications that are required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.
How to build a food delivery app
Let’s not forget the actual app itself. Accepting orders just by phone or website is going to put you outside of a large market, so building a mobile app is a must. True, building an app entails some additional costs, but due to the extra level of convenience it offers to your customers, it is money well spent.
So first you should have a good idea about the UAE and the customer trends. Researching this is a jumping off point.
Then, unless you possess app-building skills, the best approach here is to work with an established company that specialises in mobile app design. Costs can vary enormously, so it depends on the level of functionality and design that you need. The key is to work with developers who are in it to help you achieve success. Some of the best options here are based in India.
Your UAE food delivery service
There you have it. Working with a company formation specialist means your food delivery service can be up and running in no time. With people increasingly wanting to avoid restaurants, your app could help bring the variety of Dubai cuisine into people’s homes.