Widespread rip-offs by food delivery services continue due to the COVID-19 crisis. And, in most jurisdictions, little or nothing is being done to protect consumers from horrendous delivery ‘fees’ and ‘premiums’ being charged by services such as Uber Eats and Skip The Dishes. Until now…
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Until now, resto operators have been caught between a rock and a hard place,
trying to keep their doors open with delivery and pick-up orders only,
and having their profits on those orders eroded by rip-off
delivery service fees and premiums…
If you weren’t aware of how they work, these fees are charged when you get a third-party delivery company to deliver your restaurant orders. The rip-off comes when the fees, usually based on a percentage of the pre-tax total of the order, are added onto the bill. The whole situation is now worse than it was a year ago, when the pandemic first set in, because so many restos are agreeing to let the big delivery companies handle app-based ordering and payment for delivery orders.
Amazingly (to me, anyway), some of these management deals involve as much as a 40 percent mark-up to the customer for the order/delivery process. It’s no wonder consumers and restaurant operators alike have been calling out the delivery companies for ‘extortion’ and ‘holding restos and customers hostage’.
Finally, one government acts decisively
Many state and local jurisdictions across North America have acted in mostly minor ways to deal with the rip-off. But none has acted in a big way. Until now.
Surpringly, it’s mild-mannered Saskatchewan (innocuous licence plate moto: ‘Land of Living Skies’) has clamped down on the delivery services passing a fee cap of 18 percent on them until further notice. Naturally, resto owners are delighted since, at 18 percent, the fees will be much easier for customers to stomach, and both the servers and the served will have a much better chance of surviving the remainder of the pandemic crisis (whatever that entails, and however long it takes to wait it out) without suffering unnecessarily.
Under the heart-warmingly simple new Saskatchewan law, fees are also capped at 10 percent if a customer picks up the food from the restaurant, but uses a third-party app to order and purchase the food.
Official, market reaction positive
“Our restaurant sector has been especially challenged by the economic impacts of COVID-19 and this is one more way we are working with industry to support this important sector and the jobs it provides,” provincial Trade and Export Development Minister Jeremy Harrison says. “These caps will mean more money remains with small businesses and I encourage all Saskatchewan residents to continue to support their local restaurants.”
Hospitality Saskatchewan President and CEO Jim Bence says the news. “terrific for the industry. […] These are extremely difficult times for hospitality, especially in Regina right now, and further demonstrates the government’s unwavering commitment to our sector.”
No surprises there, either.
Only one flaw in this picture…
The delivery services fee cap is only good one month, designed to give the Saskatchewan legislature a chance to formulate and pass more-permanent measures.
We’ll keep an eye on the situation and let you know what happens by April 30, when the current fee cap expires…
~ Maggie J.