Posted on Feb 3, 2021
NDP JOINS RESTAURANT OWNERS AND ADVOCATES TO CALL FOR CAP ON STEEP FEES CHARGED BY DELIVERY APPS DURING COVID-19 PANDEMIC
CALGARY - Alberta’s NDP, restaurant owners and business advocates are making a joint call for a blanket, 15 per cent cap on fees charged to establishments by third-party delivery apps, such as SkipTheDishes, Uber Eats and DoorDash.
The NDP is also seeking a five per cap on processing fees to prevent any revenue losses incurred by the companies behind delivery apps from being downloaded onto drivers. The exact same measures were implemented in British Columbia in late December and will remain in place until three months after that province lifts its pandemic state of emergency. Other major cities, such as San Francisco, New York and Los Angeles have also capped fees.
“Restaurants have been forced to rely heavily on delivery service throughout the pandemic and are barely scraping by due to the high fees,” said NDP Leader Rachel Notley. “Meanwhile, the big food delivery companies are seeing massive profits. We need to restore some fairness and support small businesses.”
During consultations held as part of the Alberta’s Future project, the NDP has heard from restaurant owners that fees charged by apps can be up to 35 per cent of the value of a food order. The City of Calgary has also verified fees in this range through its own analysis and city councillors have unanimously supported a 15 per cent cap and wrote to Premier Jason Kenney in mid-December advocating for legislation to impose the restriction during the pandemic.
“With many restaurants closed to dine in, restaurants have been forced to rely on the big name, high profile delivery services because they cannot afford to keep their own delivery person,” said Annie MacInnis, Executive Director of the Kensington Business Revitalization Zone.
“The popular delivery platforms cut so far into small business earnings that many don’t make a profit or even lose money some months in order to keep their restaurants open for their loyal customer base and to keep some employees working.”
The UCP announced that restrictions will be eased on Feb. 8 to allow in-person dining; however, between the required reduction in capacity and the unlikelihood of many customers changing their dining behaviours, restaurants will still rely heavily on delivery as a means of keeping their business afloat.
“The fees delivery companies charge is almost all my profit.” said Gulaam Rasool, owner of Fahad Restaurant & Banquet Hall “The 20 percent cap is reasonable, it gives me the opportunity to make money and make it through the pandemic. We need this cap to keep my business alive.”
“Even though we are reopening, this cap is necessary for restaurants like us to make it. We need the additional cash flow that will be created through this cap.” Said Nick Lecce, partner of the family owned Peppino Gourmet Foods “Before the lockdown we had a 30 percent reduction in sales due to the economic conditions, and now down over 50 percent during the pandemic. I do not anticipate that we will even come close to pre-pandemic sales any time soon. We need all the help we can get.”
The NDP believes the Government could implement the cap through emergency powers available in the Public Health Act; however, Notley offered to work with Government to expedite passage of new legislation should it be necessary when the Legislature reconvenes at month’s end.
“Restaurants have been on a rollercoaster and many have been forced to layoff staff or operate on significantly reduced hours,” Notley. “Some are facing permanent closure. We need to do all we can to help restaurants get to the other side of the pandemic. We need to protect jobs, and better position our province for economic recovery.”