Saskatchewan

Sask. restaurants join call for cap on fees taken by food-delivery apps

Local businesses say third-party delivery apps are draining their profits

Posted: February 24, 2021
Last Updated: February 25, 2021

Güd Eats is closing its Regina location this month. (Matthew Howard/CBC)

Chris Cole says food delivery apps — which take up to 30 per cent commission on each order that goes out the door — contributed to the shuttering of his business.

Güd Eats, a vegan restaurant in downtown Regina, is closing its doors despite opening to great fanfare last year. 

"I think it's absolutely robbery that these applications are taking 25 to 30 per cent of a restaurant's gross revenue," Cole said. 

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This week, Saskatchewan's Opposition NDP asked the government to follow provinces like British Columbia and Ontario that placed commission caps on food delivery apps. 

NDP jobs and economy critic Aleana Young has suggested a 15 per cent cap, which Cole said is more than fair.

"I think the government should have taken action five months ago when things really started to get rough for us," Cole said. 

"These are family ruined, lives ruined, business owners, entrepreneurs lives ruined. We need help, and I don't feel like we're getting that help."

Due to the COVID-19 pandemic, many restaurants feel the pressure to be on food-service delivery apps because indoor dining is limited to allow for physical distancing, said Jim Bence, president and CEO of Saskatchewan Hospitality. (Bryan Eneas/CBC )

According to a survey conducted by Restaurants Canada in September, an estimated 10 per cent of Saskatchewan's food service establishments have already permanently closed due to the impacts of COVID-19 and roughly half are still losing money.

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About 48 per cent of survey respondents said they are operating at a loss and 28 per cent said they are just breaking even. 

"Once the meal is produced, out the door and in customers hands, often times the restaurateur makes zero money. It's extremely difficult," president and CEO of Hospitality Saskatchewan Jim Bence said. 

Saskatchewan Hotel and Hospitality Association President and CEO Jim Bence says third-party delivery services are hurting local restaurants. (CBC)

Many restaurants feel the pressure to be on food-service delivery apps due to the COVID-19 pandemic, because indoor dining is limited to allow for physical distancing.

"It's a real love-hate relationship. On the one hand, if they're not on the apps their competitors are and they get the eyeballs. But then on the other hand they have to pay these really high commissions and that's where their margins evaporate, and they're left with nothing," Bence said. 

"So it's been an extremely difficult experience over the last 11 months."

Some relief for businesses 

Asked about high commission fees, the Saskatchewan government pointed to the Strong Recovery Adaptation Rebate established during the pandemic. It provides businesses making changes due to the pandemic — changing floor plans, installing physical infrastructure, taking on new technology — up to $5,000.

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Customers order food at Güd Eats in Regina on Feb. 23, 2021. (Matthew Howard/CBC)

But Cole, who says he applied for all the financial support he possibly could, said the rebate doesn't address the problem.

"$5,000 might not even cover payroll in most restaurants," Cole said. "We need everything we can to keep our doors open, and we don't feel like we've been getting that support."

Push to support local directly 

Like Güd Eats, 80 per cent of restaurants in Saskatchewan are family-owned businesses, Bence said.

"When they're at risk, those are our friends and neighbours. Those are the most heart-wrenching calls I take. They're right at the edge, and that's why mental health and wellness is really a key priority in our industry."

Cole is hoping people become more aware of commission fees taken by third-party delivery apps and encouraging people to truly support local.

"Supporting local is supporting the business directly and making sure 100 per cent of those profits stay in the pockets of these establishments and businesses in order for them to operate and keep their doors open," Cole said. 

"I'm just wishing and praying that everyone can survive this and that there is a light at the end of this tunnel for a lot of entrepreneurs and small businesses."

ABOUT THE AUTHOR

Mickey Djuric
Reporter

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