Delivery apps increase rates as soon as possible in Ontario

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When Frank Caputo went to check his restaurant’s bank account last weekend, it was a few hundred dollars missing from what he thought it was.

After taking a closer look, he realized the problem: his Uber Eats deposit was lower than expected. The reason? The food delivery app had boosted its commission to 30%, after being capped at 20 for months.

“There was no notice,” said a frustrated Caputo, whose Vaughan restaurant Hank Daddy’s Barbecue relied on delivery and take out orders to get through the COVID-19 pandemic.

Uber Eats, DoorDash and Skip the Dishes had all seen their commissions and fees capped by provincial legislation passed in November. The Local Restaurant Support Act capped the take of delivery services at 20% until restaurants are legally allowed to serve meals indoors.

When Ontario entered Stage 3 of its plan to reopen last Friday, indoor dining – with capacity limits – was allowed again. Delivery apps quickly increased their commissions, leaving Caputo and other restaurateurs frustrated and surprised.

“They should give us a month at full capacity before we start increasing again. After the 18 months we’ve been through, a few days with limited capacity and they think it’s back to normal? said Caputo, who pointed out that most restaurants have single-digit profit margins at the best of times.

A spokesperson for the provincial Department of Economic Development, Job Creation and Trade said the government was trying to help restaurants through what has become for many a struggle for survival. Although the fee cap has been lifted, spokeswoman Sumita Kanga said permanent changes including take-out alcohol sales and delivery, combined with subsidies to small businesses, have helped the industry.

“Ontario’s small independent restaurants are important to our communities. They sponsor our local sports teams. They give away gift cards for school fundraisers and free lunches for our frontline workers. They have been there for us. And we want to help them in any way we can as we go through COVID-19 together, ”Kanga said.

Spokespersons for app companies insist they care about the fate of restaurants. They say it’s fair to increase commissions to previous levels now that restaurants can start welcoming people to their dining rooms again.

“Local restaurants are the heart and soul of our neighborhoods, and their continued success is our success. Over the past year, it has been a priority for us to support them in these difficult times. As indoor dining has reopened across the province, we are delighted to see our partner restaurants return to dining as a primary source of income, ”said a spokesperson for Uber Canada.

“DoorDash has always supported restaurants, which is why we have invested over $ 1 million in restaurant relief grants in Toronto, Montreal and Vancouver,” a DoorDash spokesperson said, adding that the restaurants are not a captive market:

“With the lifting of restrictions in Ontario, restaurants have the freedom to choose the options that suit them, including not offering delivery at all. “

A spokesperson for Skip the Dishes said the company has a restaurant aid program and has paid out $ 71 million to restaurants across the country since March 2020. The company also gave a $ 25 rebate. % to independent local restaurants while indoor dining was prohibited.

As a proud Canadian brand, Skip has proactively lowered our rates and been at the forefront of the industry in support. … Our support program was proactively implemented across Canada long before commission caps were imposed, ”added the Skip the Dishes spokesperson.

The app companies also claim that restaurants were told the fees were increasing, but Caputo insists he was caught off guard when Uber raised his fees.

“They were helpful at the start of the pandemic, when they offered to put us on daily deposits instead of weekly. But since then we haven’t heard anything, ”Caputo said.

Ryan Mallough, Ontario regional director for the Canadian Federation of Independent Business, said restaurants are still struggling to get back on their feet after some of the longest COVID-related lockdowns on the planet. Small businesses, Mallough said, also incurred an average debt of $ 180,000 during COVID.

“In an age where they’re still dealing with capacity restrictions, getting staff back and getting things back on track, the last thing a restaurant needs is a surprise like this,” Mallough said.

Still, given that the app companies’ business model depends on squeezing every possible penny out of restaurant bottom lines, Mallough isn’t exactly shocked that they reinstated their previous fees as soon as they got there. legally permitted.

“I can’t say I’m shocked,” Mallough said.

Given the competition between delivery applications, a senior Restaurant Canada executive wondered why at least one of the large companies did not voluntarily lower costs in an effort to gain more market share.

“I’m surprised that hasn’t really happened yet, at least not to a significant extent,” said James Rilett, Restaurant Canada vice president for Central Canada. He also took issue with the suggestion that restaurants could easily choose not to use one of the delivery apps.

“They don’t really have a choice, because that’s where a lot of consumers go, especially the younger ones. But it’s very, very difficult to make money.

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