Food delivery app Skip the Dishes has retaliated against a government-imposed cap on its service fees by implementing a new surcharge on B.C. orders.
The 99 cent “B.C. fee” is now listed on orders alongside taxes, tips and delivery fees on the app.
“The province of British Columbia has temporarily capped the fees that Skip can charge local restaurants,” reads the notice.
“To continue to provide you with the food you love from your favourite restaurants while providing earning opportunities for independently-contracted couriers, you will now see a charge added to all orders in B.C. until the order is lifted.”
The company said in a statement to CHEK News that the fee is “temporary” until government lifts a cap on its service charges, which was implemented in late December.
B.C. restaurants had complained that Skip the Dishes was charging them fees of as much as 30 per cent during the pandemic, cutting into their already-dwindling profits during a time of crisis. In Victoria, downtown businesses banded together with a local app called Tutti, to try and limit fees and fend off competition from major international companies.
The government used its powers under the Emergency Act to set a fee cap of 15 per cent on food delivery services like Skip the Dishes, effective Dec. 22. The move was applauded by the business community, restaurant sector and B.C. Federation of Labour at the time as a step to end predatory practices during the crisis.
The government also said it consulted with major companies like Skip the Dishes in setting the cap, which has already been implemented in other provinces like Ontario.
“An additional cap of 5 per cent is also included for other related fees associated with use of the service, such as online ordering and processing fees,” the province said in a statement at the time. “This will ensure that companies cannot shift their delivery costs to other fees.”
Nonetheless, the creation of the new fee appears to have allowed Skip the Dishes to circumvent the government directive.
“As a result of the Food Delivery Services (COVID-19) Order put into place by the Government of British Columbia, we have introduced a temporary ‘B.C. Fee’ across the province to ensure that there is no impact to the service and support we’re able to provide all of our stakeholders while the order is in effect,” the company said in a statement. “We want to be transparent with our customers and make it clear why they are seeing this fee while the Order is in place.
Economic Recovery Minister Ravi Kahlon on social media called the surcharge “extremely disappointing.”
— Ravi Kahlon (@KahlonRav) February 4, 2021
The restaurant sector said the new surcharge will only hurt consumers and undermine Skip the Dishes’ effort to grow.
“I was quite surprised,” said Mark von Schellwitz, western vice-president of Restaurants Canada. “This is a counterproductive move by Skip the Dishes to add costs onto consumers because they are capped.
“You have to remember, over the last nine or 10 months we’ve had a three-fold increase of full service restaurants moving to take-out and delivery. At these 30 per cent fees that were being charged these third party delivery companies were making more money off a restaurant meal sale than the restaurant did
“So we certainly appreciate what the B.C. government did in capping these fees. And today adding these extra fee is only going to hurt consumers.”
The cap remains a “win-win situation” for restaurants and third-party delivery companies, offering a compromise in a sector that has notoriously slim profit-margins, he said.
“A lot of our members are saying look if you want to do take-out or delivery please call us directly, don’t go through these third-party delivery companies because we’re simply not making any money out of it. They only thing they are getting out of it is some cash flow, which they desperately need right now, but it’s literally like robbing Peter to pay Paul. So they get some cash flow there but then they have to pay bills and at the end of the day they are actually losing money.”
Von Schellwitz said restaurants hope government makes the cap permanent, despite the moves by Skip the Dishes to get around it.
The government cap remains in place until three months after the provincial state of emergency ends. There is no indication the province intends to lift the state of emergency in the foreseeable future.