B.C. extends food-delivery fee caps as new COVID-19 restrictions take effect

As new public health restrictions take effect in B.C., the provincial government has extended a key support for the ailing restaurant industry.

A cap on food delivery service fees, first implemented in December 2020, has been extended to Dec. 31, 2022. It was set to expire at the end of this month.

“The fee cap leaves more hard-earned money in the hands of people working in the restaurant industry,” said Jobs Minister Ravi Kahlon on Monday.

“The order also ensures that delivery drivers are fairly compensated and stops delivery companies from shifting their delivery costs to other fees.”

Under the cap, food delivery companies like Skip the Dishes and Uber Eats can charge restaurants a maximum of 15 per cent for delivery.

Another cap of five per cent has been added to other fees associated with using their services, such as ordering and processing fees.

The rules also state that delivery companies can’t reduce compensation for their drivers or retain staff gratuities.

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Mark von Schellwitz, vice-president of Restaurants Canada, called it a “win-win” for the restaurant industry and food delivery service companies.

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“We’re in very challenging times still, we’ve still got about 60 per cent of our table service restaurants that are losing money and going into more debt each month,” he explained.

“So anything government can do to help stabilize our costs when we’ve seen food price increases, labour cost increases, all the uncertainty about the supply chain.”

Third-party delivery sales from B.C. restaurants had already increased before the COVID-19 pandemic, said von Schellwitz, but when the crisis struck, those sales increased three-fold as indoor dining was cut in half.

The cap on fees, he added, is particularly important as food delivery applications become a “more important component” of each restaurant’s sales mix.

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New public health restrictions, including indoor gathering limits and large venue capacity limits, took effect on Monday.

Restaurants are still allowed to operate at maximum capacity provided guests stay seated and wear masks when not at their tables, and retail stores must have COVID-19 safety plans in place.

Scott Seth, a B.C. senior policy analyst at the Canadian Federation of Independent Business, said the restrictions will undoubtedly impact small businesses in the province.

Every day they’re open, he told Global News, about a third of them lose money.

“Right now only 37 per cent of small businesses in B.C. are making normal revenues. Huge numbers of COVID debt — over $129,000 on average,” said Scott. “We need a fresh kind of go at government grants and loans for small businesses.”

He said the cap on food delivery fees is a “good start,” but ultimately, he’d like to see the province renew a number of grants for businesses that expired months ago. He’d also like to see the federal government reinstate rent and wage subsidies at their initial value.