As B.C. faces a second wave of COVID-19 restrictions, one Vancouver restauranteur is touting an homegrown, at-cost delivery app as a way to keep the industry afloat.
It comes amid uncertainty about when B.C.’s newly reelected NDP government will impose a promised cap on delivery fees to the major players in the sector.
Brandon Grossutti, owner of Pidgin Restaurant, started working on FromTo.ca last spring, as restaurants shifted primarily to delivery amid COVID-19 restrictions.
Major third-party delivery apps like SkipTheDishes and UberEats charge restaurants a 30 per cent fee on orders, meaning a $100 order costs the restaurant $30.
That can mean some orders actually come at a loss.
“The math didn’t make any sense, and having 30 per cent taken off our bottom line wasn’t just going to hurt Pidgin, but it was going to hurt all of my colleagues and friends and people I know in the industry,” Grossutti said.
“The goal with what we’re doing is to keep that money in B.C., keep that money in Canada, to be able to keep that money in restaurants’ and drivers’ pockets.”
Grossutti has a background in software, and started coding the app himself. He quickly realized the job was too big and has expanded the team to workers in Japan and Europe.
So far, the app only offers service in central Vancouver, but has grown to include about 15 restaurants.
Drivers get a $6.50 delivery fee and tip, and restaurants are able to subsidize them further if they wish.
Restaurants collect the price of the order and tax, minus credit card processing fees and any subsidy they offer the driver.
For the time being, the app itself collects nothing.
“What we’re trying to do is build something that’s balanced, that’s fair to all parties involved, the restaurant, the driver the customer,” Grossutti said.
“These are your neighbours … the independent culture you love about Vancouver. Every time you order from one of these third-party apps, you are taking money out of their pockets.”
BC Restaurant and Foodservices Association president Ian Tostensen said the concept could offer a crucial lifeline for struggling businesses.
“It’s going to make a real difference,” he said, adding that under the current apps “the restaurant is not making any money, none.”
“Lets face it, these are oligopolies, no one can get in to compete.”
During the provincial election, the NDP pledged to cap delivery fees at 15 per cent, and Tostenson said he believes the government could make the change as early as next week.
In an email, a spokesperson for Mike Farnworth said the commitment was included in his mandate letter as the province’s reappointed solicitor general, and that there would be more information in “the weeks to come.”
UberEats did not respond to a request for comment about the fee cap.
A DoorDash spokesperson said the move could force it to increase prices for customers, while reducing business for restaurants and drivers.
SkipTheDishes outlined a range of policies it said helped restaurants, including a $0 commission for companies that signed up during a lockdown and a 10 per cent fee for restaurants that used their own drivers.
Grossutti said he was pleased his platform has been able to get off the ground in the face of multinational companies with big dollar ad budgets.
“We’ve basically created a competitor of these big third party applications within five months, it’s been amazing,” he said.
-With files from Kristen RobinsonView link »