The new year brought in the province’s first permanent food delivery-fee cap, but many Maple Ridge and Pitt Meadows restaurants don’t think that it goes far enough in restricting third-party delivery services and what they can charge local eateries.
The permanent cap on delivery fees, which took effect on Jan. 1, limits delivery company fees to 20 per cent of the dollar value of each order.
Brenda Bailey, Minister of Jobs, Economic Development and Innovation, said that this cap on fees helps to protect local establishments from paying delivery fees as high as 30 per cent of the order’s value.
“When restaurants were being charged unfair fees, our government acted fast to implement a temporary cap on delivery-service fees,” said Bailey. “We’re excited to bring in a permanent cap in the new year that will provide more support to restaurants.”
However, some owners of local restaurants don’t think that this delivery cap goes far enough in protecting small businesses from predatory third-party delivery fees.
Barton McLaren is a franchisee for Home Restaurant in Maple Ridge who believes that rather than help improve third-party delivery for restaurants, this permanent fee cap is merely preventing the issue from getting worse than it already is.
“This new rate cap is really just an extension of the cap that has been in place since we started using Skip the Dishes,” said McLaren. “The cap will allow us to continue to offer delivery. If the rates increased back to prior levels we would likely drop the service altogether.”
The initial temporary cap was put in place by the provincial government in December 2020 in order to make offering delivery more affordable for restaurants during the height of the pandemic when dine-in service was banned. It was then extended twice in September 2021 and December 2021.
Once pandemic restrictions were lifted, many restaurants were worried that food delivery fees would once again hike back up to unaffordable rates. However, the Food Delivery Service Fee Act was passed on Nov. 3, 2022, which introduced the impending permanent fee cap.
This was a necessary intervention by the B.C. government for many independent or small chain restaurants like Home Restaurant, which only has four locations across the Lower Mainland and Interior B.C.
“The commission structure for Skip the Dishes, Uber Eats, and Door Dash makes the profit margin on third-party delivery orders very tight,” explained McLaren. “To compensate, we need to charge more for orders taken over these platforms than for dine-in or pick-up.”
Even when restricted to 20 per cent of an order value, McLaren said the delivery fees still force small restaurants like his to alter their business model in order to turn a profit.
“20 per cent commission is low enough for us to continue to be on the platform but not enough to really turn a profit from the orders,” he said. “When we get busy with in-house dining we shut off the delivery service to focus on our dining guests. If delivery was more profitable we would be able to afford to increase staffing to accommodate both dine-in and delivery.”
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