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Lethbridge council to debate motion requesting province caps food-delivery app fees

Click to play video 'Lethbridge city council to discuss potential cap on fees for food delivery apps' Lethbridge city council to discuss potential cap on fees for food delivery apps
WATCH: Lethbridge city council will debate a motion on Tuesday that, if passed, would ask the province to cap fees for third-party food delivery apps at 15 per cent. Danica Ferris has more.

Lethbridge city council is set to debate a motion on Tuesday that could help local restaurants that are struggling due to the COVID-19 pandemic.

Read more: Calgary city council supports 15% cap on food delivery fees

Councillor Rob Miyashiro is the mover of the item, which, if passed, would direct Mayor Chris Spearman to get in touch with the province. The motion reads in part:

“Be it resolved that city council direct the mayor to write to the appropriate provincial ministers and the premier requesting that the usage fees for app-based food delivery services be capped at 15 per cent.”

Read more: Ontario moves to cap delivery fees in COVID-19 hotspots where restaurants are takeout only

Ontario and British Columbia have seen discussions of similar caps, and Los Angeles, San Francisco and New York have already implemented limits.

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“I’ve looked at some jurisdictions that are looking at it,” said Miyashiro. “They are looking at 15 per cent being pretty common in other jurisdictions across the U.S. and Canada.”

Third-party delivery such as Skip the Dishes and Uber Eats currently charge restaurants as much as 30 per cent on the total cost of a food order.

“It means the restaurant might be getting hardly any of that, because any of the profit margin in that purchase has been taken by the food delivery service,” said Miyashiro.

“I think we just want to look at some fairness and equity.”

Read more: Lethbridge business owners react as Alberta government mandates 2nd COVID-19 shutdown

Ram Khanal owns three restaurants in the Lethbridge area and employs more than 70 people. He says his establishments aren’t currently doing delivery, but if a cap like the one proposed was instituted, his restaurants might start.

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“If they are taking 30 per cent, we would be making no money,” said Khanal. “Why many restaurants are getting into is is there are slow times, so even if they don’t make money, they’re not losing it as much.”

Read more: The New Reality: Canadian restaurants in peril, delivery apps not helping: owners

Owner and general manager of Lethbridge’s Canadian Brewhouse Tyler Harvey says restaurants have been put in a difficult spot; missing out if they don’t join third-party delivery apps, while making little to no revenue while on them.

“If you don’t get involved, you’re not reaching all the customers that take advantage of that service,” Harvey said. “But at the same time, Skip the Dishes does take up to 25 per cent.”

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Harvey says a savings of 10-15 per cent through a cap on fees would be huge for restaurants in terms of revenue during a tough time.

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“That just helps us out that much more, and then we have a little extra cash to bring on some more staff,” he said.

The motion will be discussed when city council meets for the first time in 2021, on Tuesday at 1:30 p.m.