Montreal wants to see cap on fees charged by food delivery apps

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WATCH: As restaurants continue to struggle amid the pandemic, the City of Montreal is asking the provincial government to implement a new measure to help cut costs for businesses. As Global’s Felicia Parrillo reports, restaurants also argue that costs for food delivery platforms are taking a big bite out of profits.

Just like thousands of restaurants across the province, Falafel St. Jacques has taken a hit amid the coronavirus pandemic.

Sales are down and COVID-19 measures have forced them to resort to takeout, pickup and delivery. But owner Ronen Baruch says big delivery platforms are taking a big bite of potential profits.

“They’re running between 25 to 30 per cent in commission that they’re taking from the restaurant,” he said.

Read more: Quebec business community bracing for extended coronavirus lockdown and curfew

Baruch says even though the fees are high, they need apps like Uber Eats and SkipTheDishes to be able to give clients a variety of options.

“It’s kind of a catch 22 here,” said Baruch. “We’re in a position where we be without them. We can’t with or we can’t without. It’s very difficult.”

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Quebec’s restaurant association says Baruch isn’t alone — many struggling businesses are in the same boat.

Read more: Montreal restaurants struggling to survive in COVID-19 era

“Thirty per cent of a total sale bill in an industry where profit margins on a good year are about four or five per cent for a well-managed business — it makes the sale pointless,” said Julie Couture, a spokesperson for Quebec’s restaurant association.

In a statement to Global News, a SkipTheDishes spokesperson said, “all local, independent restaurant partners on the SkipTheDishes platform across the country are paying less than 20% in commission while their dining rooms are closed.”

And Uber Eats said “they support restaurants by driving demand through marketing campaigns, waiving activation fees, introducing daily payout, and providing flexible options like 0% pick-up, 7.5% for online ordering, and 15% for restaurants who use their own delivery staff.”

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

But the City of Montreal wants the province to regulate how much food apps can charge.

“We looked at what’s happening in British Columbia and Ontario where the governments have imposed a maximum fee of 15 per cent,” said the head of economic and commercial development of the City of Montreal Luc Rabouin.

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“So we ask the government of Quebec to do the same to help the restaurants.”

On Monday, Quebec Premier Francois Legault said he’s open to taking a look at legislation but believes it could be complicated.

“We can look at that but I’m not sure in practice it’s realistic to put some rules and make sure they are respected,” he said.

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Coronavirus: Quebec Retailers, restaurants worried over extended lockdown – Jan 7, 2021