B.C.’s struggling restaurants balk at premium delivery fees

A Vancouver restaurant owner says delivery services are forcing restaurants into premium plans where they could pay more than the 20 per cent commission fee rate capped by the B.C. government.

The cap was mandated at the height of the pandemic. Permanent legislation was passed last year, but emails shared with CityNews show services like Uber Eats and SkipTheDishes have found a workaround, offering both basic plans at a 20 per cent fee and charging more for plans with “enhanced services.”

“Before the pandemic, I’m talking about full-service restaurants, the average full-service restaurant had less than 10 per cent of their sales that were made up of takeout delivery. But as you know, we had to pivot and the industry was really resilient and made that switch to takeout delivery, and now the average table service restaurant in British Columbia receives 37 per cent of the revenue in takeout delivery sales.” Mark von Schellwitz of Western Canada, Restaurants Canada said.

He says many restaurants are having a tough time.

“It’s not just delivery fees – our food costs are up 15 per cent. Our labor costs are up 12 per cent. Insurance costs, property taxes. In B.C. alone, we’re down about 26,000 employees from where we were before the pandemic.”

The Ministry of Jobs, Economic Development and Innovation tells CityNews that delivery services can’t charge more for core services, but that “the province’s cap on fees does allow for food delivery companies to innovate and provide tiered pricing models through enhanced services (such as marketing, web design or data analytics) outside of the fee cap.”

Related Articles: 

• Canadians cutting back spending on groceries, restaurants as inflation rises: poll

• Uber rideshare, food deliveries more expensive to offset fuel costs

• Restaurants press to keep delivery app caps as they rebound from pandemic

Keerthana Rang of Uber says the company is “compliant with Bill 33.”

“Bill 33 requires delivery platforms to offer a 20 per cent option for core services. So, this means basic delivery, online ordering, and payment processing.”

UberEats says it’s not breaking B.C.’s rules, and that they gave restaurants a transition month during January to experience the premium perks.

“But for businesses who want more, who want to grow their customer base, who want to generate these repeat orders, offer maybe lower delivery fees for their customers, they can sign up for these additional services and that comes at a different price,” Rang said.

DoorDash and SkipTheDishes say their tiered plans are also allowed, as long as they all offer their basic package at the 20 per cent commission rate.

von Schellwitz says that might be tough on B.C. restaurant owners’ wallets. He says owners are worried rising interest rates could mean less business for them this year.

“There’s no question in a really low margin industry, even at the best of times, those takeout delivery fees certainly make it really difficult for restaurants to make a buck on those takeout delivery sales, which, as I mentioned, are a much more important part of their sales mix.”