The cost of having food brought to you. Delivery fees are to be capped. (Alison Sandstrom/paNOW)

By Glenn Hicks

cost of living

Restaurant food delivery fees capped in emergency government order

Mar 27, 2021 | 8:00 AM

Starting Sunday, new temporary emergency legislation means the delivery service fee to restaurants from third-party providers, like Skip The Dishes, will be capped at 18 per cent of the pre-tax order price and 10 per cent if the customer picks it up themselves.

The provincial government said they made the move to ensure more money remains with small businesses and jobs are protected. The industry has called it ‘terrific news’ and a boost for their much-dented coffers during the pandemic and hope the law stays on the government’s menu of business support measures for the rest of the year.

“Because this legislation is tied to the emergency order, it’s set to run until April 30, but we’d like to extend that through the balance of the year as a best case,” President and CEO of Hospitality Saskatchewan Jim Bence told paNOW. “Second best would be at least until the end of summer.”

Bence said restaurants have been hit hard by the COVID restrictions and owners are very frustrated about the fees of up to 30 per cent they say they’ve been paying delivery providers.

“Take-out became the only source of revenue for many restaurants during the lockdown and since, and third-party companies have that market locked down. Their commissions really ate into already very thin margins,” Bence explained.

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Restaurants were ‘being held hostage’

He used a $10 burger as an example of how, after all the overheads, net profit of a few dollars ended up going to the delivery provider.

“Restaurants weren’t even breaking even on it, they felt like they were being held hostage,“ he said. “The delivery providers offer such a ubiquitous marketing tool. If you’re on it, great, you get the eyeballs but you’re not making any money, and if you’re not on it you start to lose market share.”

Harry Rai, the owner operator of Spice Trail restaurant in Prince Albert welcomes the new cap on the delivery fees.

“The situation everyone is in right now, every penny counts right. This would translate into about five to seven per cent more earnings for the restaurant,” Rai said.

He noted the delivery providers have very stringent rules that can hurt the bottom line.

“If, for example, they have a delay in sending the driver, they expect us to remake the food because the food we’ve already made is getting cold.”

Rai said customers should think about using the individual restaurants’ own apps to save money on their order.

Response from delivery providers

paNOW contacted third-party delivery providers for reaction to the cap on fees.

DoorDash offered the following response:

DoorDash has always supported restaurants. Pricing regulations could cause us to increase costs for customers, which could lead to fewer orders for local restaurants and fewer earning opportunities for Dashers. We have been in touch with the Saskatchewan government and are eager to work with policymakers on solutions that better support restaurants, customers, and Dashers.

Skip The Dishes did not immediately respond to paNOW’s request for comment. However, when the Government of British Columbia passed similar legislation in December capping deliver fees at 15 per cent of the order price, the company added a 99 cent administrative fee payable by the customer.

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glenn.hicks@jpbg.ca

Twitter: @princealbertnow