Tory calling on food delivery apps to reduce commissions to help struggling restaurants
Chris Fox, CP24.com
Published Tuesday, April 21, 2020 7:24AM EDT
Last Updated Wednesday, April 22, 2020 1:31PM EDT
Mayor John Tory is calling on food delivery companies and apps to consider lowering their commissions in order to help restaurants that are already struggling during the COVID-19 pandemic stay afloat.
Restaurants across Ontario have been prohibited from offering dine-in service since March 18 but many of them have remained open for delivery and takeout orders, often using apps like Uber Eats and Skip the Dishes to fulfill those orders.
The problem, Tory said, is that those apps take large commissions which have made it difficult for restaurants that are now entirely reliant on them to get by.
“There are restaurants that are really struggling. They welcome having the business but the commissions that are being taken from them – in the 30 per cent range - are making it such that it is not a business that they can make any money off or pay any of their bills with,” he told CP24. “They are actually sort of losing money in some cases. So I hope that we can get one of those delivery companies to show some leadership. I hope we can see one of them come forward and say we are going to take the lead here and say that for a temporary period during the emergency we are going to reduce our commissions so that these restaurants can stay in business.”
Tory’s comments come after the head of Restaurant Hotel and Motel Association told CTV News Toronto that many businesses are struggling to stay open for delivery and takeout with the high fees they have to pay to delivery apps.
In an interview on April 17, Tony Elenis said that restaurants that are new to delivery game have faced the double blow of having to invest in more durable packing for their food and then shell out double-digit commissions that have eliminated their profit margins.
“It’s like someone drowning in a pool, throw them a rope,” he said. “They need a lifeline.”
For his part Tory told CP24 that he is “actively” talking with representatives from popular delivery companies and apps about reducing their commissions and remains hopeful that there will be a widespread show of goodwill to ensure the city’s restaurant industry can thrive, as much as possible, during the pandemic.
It should also be noted that some companies have already lowered their commissions. DoorDash, for example, reduced commissions by 50 per cent last week while Skip the Dishes has offered restaurants a 25 per cent rebate on commissions. Uber Eats continues to charge a commission of 15 per cent but reduced fees for restaurants using their own delivery people and waived them for pick-up orders.
“We are talking to most of the bigger apps and delivery people. They are willing to talk about it. They have done some things like knocking down some of their rates and waving their delivery fees so they are coming to the table but we do think it should be lower, especially on the independents who don’t have the bargaining power that others do,” James Rilett, who is the vice-president of the Central Canada region for the industry lobby group Restaurant’s Canada, told CP24 on Tuesday. “It is a pretty dire time to be honest. Most restaurants are now looking at how do we pay a second month’s rent with no income and I think people are looking at the debt load they are starting to incur and saying can I keep going?”