Food delivery app fees for restaurants capped at 15 per cent in B.C.

VANCOUVER (NEWS 1130) — The province is temporarily capping the fees delivery companies can charge restaurants at 15 per cent, a move the industry is calling an early Christmas gift.

While health orders are blocking people from mingling with other households at restaurants, and many people simply choosing to stay home to reduce the changes of getting COVID-19, delivery now accounts for as much as 50 per cent of restaurant revenues.

Ian Tostenson, president and CEO of the BC Restaurant & Food Services Association, says the cap on fees is coming in at the right time.

#BREAKING Province imposes food delivery fee caps of 15 percent for companies like Uber Eats/DoorDash, etc. There have been concerns about how much those fees have been adding to the pain for restaurants.

— Martin MacMahon (@martinmacmahon) December 22, 2020

“You know, I don’t fault these companies — they’re brilliant. I’m not languishing in the fact that we’ve capped the fees here, but the fact is, they’re kind of running away and taking advantage of an industry that’s in real trouble right now,” he tells NEWS 1130. “This is going to make a big difference to it. If we would have continued at the 25 to 35 per cent commissions, I think you would see a lot of businesses go out of business pretty quick.”

He explains a restaurant might make $2 on a $50 order, but with a cap on fees, that bumps up the profit to $7 or $8, “which is so critical right now.”

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The province is also limiting the online ordering and processing fees delivery companies can charge, at five per cent.

The fees will remain in place until three months after B.C.’s state of emergency is lifted. The province has been under the longest state of emergency in its history, which has been in place since March.

“The pandemic has had a significant impact on the restaurant industry, leaving many owners to find safe and sustainable ways to keep their business operating,” said Ravi Kahlon, minister of jobs, economic recovery and innovation. “This includes moving their menus online to accommodate the surge in-home delivery. To help support B.C. restaurants, this temporary cap on food delivery fees is further action our government has taken to aid local restaurants and keep more British Columbians employed.”

During the provincial election, the BC NDP promised a cap on delivery fees to help protect jobs in the restaurant industry.

BC Federation of Labour happy with cap

The BC Federation of Labour is celebrating the cap saying it’s a win for restaurant workers and their wages — but the measure is only a temporary fix.

Sussanne Skidmore with the BCFL says they’re looking forward to more developments.

“I think as we move forward, I’m looking forward to the opportunity to work with the government and develop something that’s much needed — which is a precarious work strategy to be able to deal with the precarity of work and gig workers in general. And there needs to be a bit of a strategy because this is such a growing type of work,” she says.

Skidmore adds while the change to fee delivery is a step in the right direction the next steps are just as important to make sure that there are more protections for workers in the restaurant industry.

“I mean these are big giant corporations, many of them shouldn’t be making sort of a multi-million dollar profit on the backs of small businesses and local working people.”