There’s a good reason food delivery charges are being capped in B.C. | iNFOnews | Thompson-Okanagan's News Source

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There’s a good reason food delivery charges are being capped in B.C.

Image Credit: ADOBE STOCK

The B.C. government is putting a cap on what food delivery companies can charge restaurants this Sunday.

It will not only put more money in the pockets are the restaurant owners – who have relied heavily on food delivery during the COVID-19 pandemic – but ensure the drivers don’t have their pay docked either.

As of Sunday, Dec. 27, food delivery services can only charge restaurants a maximum of 15 per cent for delivery and only five per cent for other services such as online ordering and processing fees.

In February, shortly before COVID-19 caused most restaurants to close and/or convert to pick-up and delivery only, Karyn Mackenzie, owner of DunnEnzies Pizza in Kelowna, told that many delivery services were charging 25 per cent or more of the cost of a meal.

After she paid staff wages, benefits, overhead, food costs, insurance and taxes, she was left with no profit.

“The 30 to 35% taken off the top will cripple most small businesses over time,” she said.

READ MORE: This Kelowna restaurateur wants you to know the true cost of meal delivery services

The B.C. government has taken other measures to support the industry, such as allowing restaurants to sell and deliver sealed, packaged alcohol with the delivery of a meal. Patio season was also extended beyond summer months to allow guests to sit outside and at a safe distance.

Public safety minister Mike Farnworth says some delivery companies have been charging upwards of 30 per cent or more but he doesn't believe consumers will stand for paying the difference in fees if they're passed on, especially if competitors charge prices that are fair.

"We expect the companies will be very mindful of the competition that they will be facing from each other but also new entrants into the marketplace," he said of the delivery services.

Farnworth says small delivery service businesses will be exempt from the order on fee caps that also ensures delivery companies can't reduce drivers' wages or keep tips.

Adam Walker, parliamentary secretary for the new economy, says Canada's three major food delivery companies were consulted as part of the cap that is similar to that established in other jurisdictions.

"We've determined that the approach that we're taking is a balanced approach that will allow them to sustain their business throughout the pandemic while supporting restaurant workers and the delivery drivers themselves who will rely on this non-standard work."

Small delivery services will be exempted from the new Ministerial Order, according to a news release from the Ministry of Public Safety and Solicitor General. Companies also won’t be able to reduce pay or take tips away from drivers.

The new rules will stay in place for three months after the provincial state of emergency is lifted.

The food services sector of the B.C. economy employed 150,260 people in September, down 25 per cent from a year earlier, the ministry said.

The Ministerial Order can be seen here.

— With files from The Canadian Press.

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