Food delivery services like Uber Eats and Skip the Dishes are adjusting the fees they charge restaurants to process and handle orders, after pressure from politicians to do more to help an industry that has been devastated by COVID-19.
Delivery and takeout orders have been a lifeline for restaurants in the ongoing pandemic that has wiped out demand for indoor dining. But fees charged by the delivery services can often be up to 30 per cent of the bill, which eats into the restaurant’s profit margins which were razor thin to begin with.
Uber Eats said Friday it has lowered its “delivery-only” fee for restaurants that process the order themselves but simply need a delivery service, to 7.5 per cent. That service was only launched last month, but the rate will be in effect until the end of the year at least, at which point that rate will be 15 per cent.
And the company has added an option that charges zero per cent commission for pickup orders, when the order is processed by Uber but the food itself is picked up by the customer. That option didn’t exist prior to the pandemic, but Uber says it is extending that option until next March at least.
“As delivery moves from a luxury to a utility during the pandemic, we have a responsibility to support restaurants, delivery people and customers,” Uber Eats Canada’s general manager Lola Kassim said. “We’re continuing to build on the needs of our partners to create flexible delivery options and new features that will help local restaurants reach new customers, increase demand, and generate revenue in a sustainable way.”
Ontario Premier Doug Ford called on the industry to do its part, given the precarious financial position of their restaurant customer base.
“Consider capping your fees,” Ford said. “You’re hurting these restaurants.”
Restaurants like King Rustic in downtown Toronto have been relying on those services’ apps to process almost every order they have some days, co-owner Loren Amos says.
But fees that come with each order are hard to swallow, adds co-owner Amena Ali-Ridha.
“Even though they do take 30 per cent, it’s better than nothing,” she said. “I would rather take 70 per cent of something than nothing.”
Those apps are likely to be even more crucial for restaurants in the coming months, as cold weather shuts patios and COVID-19 protocols forbid seating diners indoors, too.
Uber Eats is a major player in the market, but it isn’t the only one. Skip the Dishes handled 23 million orders across Canada last quarter, almost double the pace of a year ago. The company says it is also cutting some of its fees given surging demand.
“Skip’s support package for local, independent restaurants in affected regions will give back 25 per cent of the commission rate they’ve agreed to when joining the network on all pickup and…