The COVID-19 pandemic has forced many restaurants to turn to food delivery platforms such as Uber Eats to survive, but reliance on these services has, ironically, been draining restaurants of money.
Delivery app models, such as Uber Eats and DoorDash, are based on providing a service to both restaurants and hungry consumers. Users get food delivered to their doors, restaurants benefit by receiving orders from the app’s customer base, and the app makes money via user fees and taking a percentage of each order. But according to a viral Instagram post, restaurants are required to pay higher rates to some delivery apps.
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“As a small business, we appreciate your support, especially during these challenging times. Please consider the rates restaurants pay to delivery providers when you order,” the post begins. They noted how the DoorDash rate is 10 per cent, Foodora (which plans to cease operations in Canada on May 11th) and Skip the Dishes are 20 per cent, and Uber Eats is a whopping 30 per cent.
“Please make your orders count and support local restaurants. Order takeout by calling ahead to place your order or delivery through delivery providers that are supporting restaurants, like DoorDash and Skip The Dishes,” the post continued.
“Restaurants are doing their part by staying open for takeout. Now it’s your turn to take an active part in the support of an industry that employs millions of people in this country,” the website states.
— Canada Takeout ?️ #TakeoutDay (@canadatakeout) April 22, 2020
In Ontario, restaurants have been prohibited from offering dine-in service since March 18. Last month, Toronto Mayor John Tory called on food delivery companies to consider lowering their commissions to help struggling restaurants during the COVID-19 pandemic survive.
“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,” Tory said in an interview with CP24, adding that these restaurants are “actually sort of losing money in some cases.”
Social media reaction has been largely sympathetic, with consumers vowing to sacrifice convenience and pick up their own food.
@UberEats is ripping off restaurants at a time when those restaurants are at a survival precipice. 30% delivery fees is too much. It is time to #boycottUberEats until they cut their exorbitant fees for delivering restaurant meals. #boycottUberEats
— Darrell Marleau (@1oWonder) May 1, 2020
In a press release, Uber Eats stated that, as of April 28, customers have contributed over $430,000 to restaurants directly through the app at checkout. The company stated that they would match that $430,000, plus every additional dollar given to restaurants up to $1,000,000, and donate it towards the Canadian Hospitality Worker Relief Fund (CHWRF).
“To provide more immediate cash flow, we’ve rolled out a new payment option for restaurants so they can opt into daily payments rather than wait through the traditional weekly billing cycle,” stated Lola Kassim, general manager, Uber Eats Canada, in a press release.