The B.C. government has announced a temporary cap on delivery fees to help restaurants and hospitality businesses struggling with high costs during the pandemic.
Effective Dec. 27, food delivery service providers must not charge a restaurant more than 15 per cent of the total cost of the customer order, before taxes, for delivery services.
To make sure that delivery companies don’t shift their costs or charge restaurants under different fees, an additional five per cent cap of the total meal cost, before taxes, has been introduced for other related services, such as online ordering and processing fees.
Restaurants previously paid as much as 30 per cent of the total meal cost in delivery fees.
The order comes from the creation of an Emergency Program Act order from the B.C. Ministry of Public Safety and Solicitor General to help restaurants that have been struggling for months to keep up with high fees charged by third-party food delivery companies.
Restaurants are relying on third-party food delivery companies to sustain their businesses since the pandemic has limited in-person dining options. The high fees charged by these companies are an added financial burden for businesses that have seen a huge decline in sales this year.
“Capping food service delivery fees is another way our government is providing immediate relief to our local businesses to ensure they can focus on retaining staff and keeping their business running,” said Public Safety Minister Mike Farnworth.
Small delivery service businesses that are locally based are exempt from this order.
The order also states that food delivery service providers must not reduce the compensation they provide to an employee or contractor. Also, it mandates that tips and gratuities collected must be paid in full to the person who delivered the food or beverages.
“This cap on food service delivery fees is tremendous news for our sector, and represents another tangible way that this government is helping restaurants weather the storm of COVID-19,” said Ian Tostenson, president and CEO of the BC Restaurant & Food Services Association.
Effective Dec. 27, food delivery service providers in B.C. must not charge a restaurant more than 15 per cent of the total cost of the customer order, before taxes, for delivery services.
The cap will be in place until three months after the provincial state of emergency is lifted.
“On behalf of the entire industry and our over 190,000 employees, we thank the government for their proactive and common-sense approach,” Tostenson said. “This is truly an early Christmas miracle!”
Priya Bhat / Local Journalism Initiative / Canada’s National Observer