Murphy proposes asking province to cap food delivery app fees at 15 per cent

Article content

Councillor Verna Murphy is asking council to lobby the province for a 15 per cent cap on delivery fees from third-party delivery apps. However, the province seems skeptical this kind of legislation would help restaurants and bars.

Murphy said in an interview that third-party apps add costs for restaurants that are already struggling, but restaurants feel they will lose out on customers if they don’t work with these companies.

“This seems like a way that the province really can make a difference if they brought in a piece of legislation,” she said.

Murphy said some restaurant owners have told her a 15 per cent cap means saving $1,500 to $1,700 per month.

Dianna de Sousa, executive director of the Fort McMurray Chamber of Commerce, supports a cap, although she would prefer lower rates be achieved without regulations.

Chamber members have reported commissions ranging from 25 per cent to 30 per cent of the gross bill. Most restaurants run with a 10 per cent to 13 per cent margin, she said.


Story continues below
This advertisement has not loaded yet, but your article continues below.

Article content

Surekha Kanzig of Surekha’s on the Snye uses two delivery apps. A meal’s cost is typically broken down to 30 per cent each for ingredients and labour, and the rest for rent and other fixed costs. These can include equipment maintenance and upkeep, paying distributors, licenses, taxes and utilities. After commission rates, the actual profit is usually small.

Mitchell’s Cafe stopped using a delivery app because drivers had limited space to wait for orders, said owner Owen Erskine. The restaurant also had to adjust prices to make them fair to customers using the app, he said.

Both Kanzig and Erskine felt a cap would be helpful, but hoped the changes would not hurt customers or drivers.

In December, the B.C. government capped food-delivery fees 15 per cent. An additional five per cent cap went on other related fees such as online ordering and processing.

“We don’t want to get into a situation where we’re putting in place regulations every single time a new disruptive technology comes in place,” said Jobs, Economy and Innovation Minister Doug Schweitzer during a Thursday luncheon with the Fort McMurray Chamber of Commerce.

Schweitzer said the government asked delivery companies to work with restaurants. The province is monitoring the situation, but so far companies have been cooperative with the government.

“Is it perfect? No. But I do think that it would be even more disruptive if we put in place legislation in this area,” he said.

Last December, SkipTheDishes announced a 25 per cent rebate on commissions for local independent restaurant partners, no commission rate for new restaurants joining during active health restrictions, and a 10 per cent commission for restaurants using their own staff for deliveries.

News Near Grande Prairie

This Week in Flyers