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Calgary city council supports 15% cap on food delivery fees

Click to play video 'Calgary city council supports 15 per cent cap on food delivery fees' Calgary city council supports 15 per cent cap on food delivery fees
Calgary Mayor Naheed Nenshi is hoping to help out local restaurants by supporting a cap on fees that delivery apps charge per order. As Adam MacVicar reports, Nenshi says those fees can mean the difference between profit and loss. – Dec 16, 2020

Calgary city councillors voted to support capping food delivery fees for apps like SkipTheDishes and DoorDash, in an effort to support local restaurants during the latest round of COVID-19 health restrictions.

In a unanimous vote late Tuesday evening, city council requested Mayor Naheed Nenshi write a letter to Premier Jason Kenney and Minister of Jobs, Economy and Innovation Doug Schweitzer to call for legislation to cap fees charged to restaurants by delivery apps at 15 per cent.

According to local restaurants, some of those delivery apps like SkipTheDishes, DoorDash and Uber Eats charge restaurants a commission fee up to 30 per cent per order.

“The idea here is not to demonize the apps,” Nenshi said. “The idea here is to help small businesses, especially restaurants in Calgary, through this time of restrictions.”

Read more: Calgary council to consider downtown office redevelopment, cap on food-delivery apps

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The news of city council’s support for capping fees was welcomed by Jordan Sorrenti, owner and operator of Paddy’s BBQ and Brewery in southeast Calgary.

In-person dining is temporarily banned in Alberta as part of the province’s latest round of restrictions to curb the spread of COVID-19, but Sorrenti said his restaurant couldn’t afford to use delivery apps even before those restrictions came down.

“If I put Paddy’s up on a delivery platform, I actually lose money,” Sorrenti said. “Paying 25 or 30 per cent on a platform, I would be keeping my staff busy but steadily losing money to do so.”

In an effort to cut costs for his business, Sorrenti has launched YYC Barbecue, with a leaner and more travel-friendly version of the Paddy’s menu, but with an additional few dollars on each item to subsidize the delivery fee.

“It covers the nut, the percentage we have to pay to the delivery platform,” Sorrenti said. “We think if somebody is willing to do that for the delivery option, that’s great.”

Ontario’s provincial government recently tabled legislation to cap delivery fees at 15 per cent and set a maximum of 20 per cent for all fees.

South of the border, New York City capped delivery app commission fees at 20 per cent.

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Meanwhile, the province’s ministry of Jobs, Economy and Innovation confirmed work is already underway address supports for local restaurants.

“Ordering takeout and delivery is just one way that we can help our neighbourhood small businesses and make this pandemic a little easier for everyone,” ministry spokesperson Justin Brattinga said in a statement. “Our office continues to work with delivery service apps to find solutions that support restaurants during this second wave of the pandemic.”
A spokesperson for DoorDash confirmed to Global News that it is also in talks with the province “about solutions that best serve restaurants, customers and Dashers.”
Skip the Dishes has also been in talks with the province about support for restaurants, but said the company was “very surprised” by Nenshi’s comments about delivery fees this week.

A company spokesperson said the delivery service has already spoken with Nenshi’s office “about the direct, impactful support Skip has provided to our restaurant partners.”

“SkipTheDishes is a proud Canadian brand with all of our employees located right here in Canada, including an office in Calgary, and we know how important the restaurant community is to this city,” a company spokesperson said in a statement.

“Since the start of the pandemic, we’ve been working side by side with our restaurant partners, providing more than $30 million in commission rebates and order-driving initiatives back to our partners since March.”

On Sunday, a support package introduced by SkipTheDishes took effect on its app in Alberta.

The package included a 25 per cent commission rebate for all local and independent restaurants using the SkipTheDishes platform across the province, as well as zero per cent commission rate for any new restaurants joining the app during the restriction period, and a 10.5 per cent commission rate to any restaurant on Skip looking to use staff to do their own delivery while using the app.

“When Ontario and Alberta started talking about it, we suddenly saw companies reduce their commissions or increase their discounts; so we’re a player in a larger conversation about a new market,” Nenshi told council. “I don’t want to repeat the mistakes we made in ride sharing with Uber and so on, and I think getting in front of this for regulatory perspective makes a lot of sense.”

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Councillors will receive an update on the matter at the priorities and finance committee in the first quarter of the new year.

–With files from Global News’ Adam Toy.