Ammon News - Is Amman's stay-at-home culture dying?

By Anas Almasri

Everything can be delivered—and in Amman, almost everything is (or was). Exhausted professionals got used to having just about any and all meals brought to their doorstep. But in the last year, both of the city’s major delivery services have shut down. What will replace them?

For 10 years, two companies dominated the food delivery business: Meals on Wheels, operated by Aramex, an international shipping firm, and 911, from water distributor Sabeel. Both companies ran not only their own fleets of cars, but their own call centers: customers ordered from the deliverer, who then contacted the restaurant.

They worked on a simple and theoretically sound model: for a percentage of the sales, restaurants could use a carrier instead of operating costly individual delivery services. But the costs they were meant to save restaurants seem to have scuttled Meals on Wheels and 911.

“The rise in fuel costs [in 2008] was the main reason we stopped 911,” says Sabeel CEO Rajai Yaghnam. “We did a survey to see if restaurants would accept an increase in our fees and the results were negative.”

Fuel prices were compounded by other Amman hazards: traffic, and the attendant cost of maintaining the delivery vehicles.

“We had two very serious car accidents,” Yaghnam said. “Our employees were made up of university students who normally had just obtained their driver’s license. We also incurred too much in traffic tickets; sometimes we paid more than JD500 in traffic violations on some of our cars when we wanted to renew their registration.” Meals on Wheels made use of the same demographic to operate its fleet, according to Aramex’s 2006 sustainability report.

Another factor, says Yaghnam, was that restaurants were starting to chafe at the idea of paying a percentage on each order they got. They believed they could do better, and began to put together their own delivery teams. But Yaghnam believes that many restaurants were made worse off by the switch (except for the international fast-food franchises, which generally already had delivery teams).

Yaghnam explains that the demise of Meals on Wheels and 911 was a blow to many restaurants, especially the ones that could not afford their own delivery services. “When we closed temporarily last Ramadan, we got constant calls from restaurants asking if we were going to open again. Initially, our idea was to use the slow-down in Ramadan to restructure our business. But we finally decided to close down.”

As Meals on Wheels and 911 have exited the market, two new food delivery services have entered. The first is TransPost, a new domestic express mail firm. It’s still based on the idea of a centralized delivery provider but differs on several essential aspects. Unlike Meals on Wheels or 911, explains Khaled Al-Khuffash, TransPost’s young general manager, TransPost specializes in delivery only. “Meals on Wheels and 911 were practically restaurants. Customers called Meals on Wheels, for example, and ordered using its menu and paid a different price to what they would have paid at the restaurant. We are only a carrier service. The restaurant receives an order and then calls us to make the delivery.”

Instead of charging a percentage on each order, TransPost charges a standard delivery fee. According to Al-Khuffash, it doesn’t matter if the order was JD20 or 100, the charge would be the same. This put to rest one of the major gripes restaurants had with Meals on Wheels and 911. “Imagine if the bill was JD50 and 10 or 15 percent had to be paid to the carrier,” he says.

Another important difference is TransPost’s employment standards. “We don’t employ on a part-time or by-order basis. Our employees receive monthly salaries and social security benefits. Even if there are no orders, employees still earn their salary,” says Al-Khuffash. This, he believes, gives employees a stake in the company and makes them feel greater responsibility for its property.

Because TransPost’s core business is shipping, Al-Khuffash argues that it’s better able to handle market-wide conditions such as hikes in fuel prices. He attributes this advantage to careful operations management, without which, he says, no shipping business can survive. He admits that there are limits to how much one can maneuver around increasing costs; eventually prices will have to rise. But he contends that people have become more accepting of this reality.

The second entrant into the food delivery market is the most radical of the lot. JoOrder.com, developed by Echotech, an IT consultancy, claims to be the “first ordering website in Jordan.”

JoOrder has no delivery service. “We are a technology company, not carriers,” says Yousef Al-Alami, one of its founders. Rather, it works as a clearing house where restaurants that deliver (perhaps using TransPost) can sign up to have their menu listed online and take orders through the service. Its advantages, Al-Alami says, are in the choice and convenience it offers.

Currently, there are 50 restaurants that have signed up to the website and the list is growing. He would not disclose the number of visitors to the site, but describes the response as “amazing.”

And TransPost has just added two new cars to its fleet. It remains to be seen whether these third-party delivery services will be able to carve out a stable market base for themselves and not be out of place in the future, when, Yaghnam predicts, each restaurant, even small manaqeesh bakeries, will have its own delivery scooter.

Republished from JO Magazine (www.jo.jo) June 2009 Issue