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Cut restaurant fees or face regulation, Vancouver mayor tells delivery apps

Click to play video: 'Vancouver mayor calls for online food delivery apps to lower fees' Vancouver mayor calls for online food delivery apps to lower fees
Vancouver mayor calls for online food delivery apps to lower fees – May 28, 2020

Vancouver’s mayor is threatening to look at regulating third-party food delivery apps if they don’t lower the fees they charge to restaurants.

Steward made the comments Thursday, amid complaints by the restaurant industry that during the coronavirus pandemic, the fees are rendering them unprofitable.

Click to play video: 'Mayor Kennedy Stewart calls on delivery apps to cut high fees to help struggling Vancouver restaurants' Mayor Kennedy Stewart calls on delivery apps to cut high fees to help struggling Vancouver restaurants
Mayor Kennedy Stewart calls on delivery apps to cut high fees to help struggling Vancouver restaurants – May 28, 2020

Pacific Poke brand manager Garth Danyluk says his company has gone form doing about 20 per cent of its business through delivery apps to about 80 per cent since the pandemic began.

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READ MORE: The New Reality: Canadian restaurants in peril, delivery apps not helping: owners

“When the entirety of your sales switch to this model, and they’re taking a 20, 30 per cent cut, it takes your profitability to break even at best,” Danyluk said.

The issue has the BC Restaurant and Foodservices Association calling for the major delivery apps to temporarily cut their fees from an average of 20 per cent down to 15 per cent.

Click to play video: 'Coronavirus:  Are delivery apps hurting restaurants struggling to survive?' Coronavirus: Are delivery apps hurting restaurants struggling to survive?
Coronavirus: Are delivery apps hurting restaurants struggling to survive? – May 17, 2020

That message appears to have resonated with the mayor.

“These fees are much too onerous for restaurants and cafes, and makes it hard for them to earn enough to keep their doors open and their staff working,” said Stewart, echoing the call for a 15 per cent cap.

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“If deliveries refuse to do their part, I will work with senior governments to explore how we might regulate these companies and ensure their fees are fair.”

READ MORE: New delivery apps emerge as restaurants butt heads with popular services

Stewart’s comments have not been well-received among delivery platforms.

Skip the Dishes said it was “taken aback” by the idea.

“The mayor is proposing an arbitrary fee cap that is simply not feasible and would not allow Skip to remain financially viable in the City of Vancouver,” said the company in a statement to Global News.

Click to play video: 'B.C. restaurants reopening under ‘new normal’' B.C. restaurants reopening under ‘new normal’
B.C. restaurants reopening under ‘new normal’ – May 19, 2020

Uber Eats said the fees it charges restaurants are used entirely to cover operating costs. It added that it has already waived fees orders where people pick up their own takeout, and reduced its fee to 15 per cent for restaurants that use their own delivery driver.

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“Our fees are always transparent, never hidden in any way,” said the company in a statement.

The restaurant industry says it would rather competition and market forces bring prices down than government intervention.

READ MORE: Restaurants may never go back to ‘normal’ after COVID-19, experts say

But Mark von Schellwitz, executive director of Restaurants Canada, said the issue is a two-way street.

“It has to be a win-win situation,” he said.

“If restaurants aren’t making any money with third-party delivery, what’s the point?”

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