The BC Government Comes Through In Saving Restaurants From DoorDash, Uber Eats And Skip The Dishes

As of December 27th global third party delivery apps will only be able to charge restaurants up to 15% of a customers order. This is big for an industry reeling heavily due to the pandemic. But is there more to this issue we’re forgetting?

CBC

• By Jamie Mah @grahammah

“We understand why many people are relying on delivery and take-out during the pandemic. People are trying to stay safe and stay home, and we thank them for that. Struggling restaurants shouldn’t have to be charged exorbitant delivery commission fees by third-party apps. If these delivery app companies do not agree to keep to limit their rates at 15%, a re-elected BC NDP government will move to regulate a temporary cap to protect B.C.’s restaurant industry.”

This was a quote from BC Attorney General David Eby back on October 9th. I’ve interviewed him before. This past summer in fact when we discussed the new liquor pricing measures his government enacted back in early July. He was candid. Honest. Genuine. I came away from our chat feeling that he cared. This quote and yesterday’s surprising news that as of December 27th global third party apps will only be able to charge restaurants up to 15% for customers orders is game changing for the struggling BC restaurant sector. Looks as if my original assessment of the Attorney General might have been on point.

However, not to pin all credit for yesterday’s decision on Eby, how this decision will play out for global third party apps like DoorDash, Uber Eats and Skip the Dishes is simple. They’ll raise their prices and dump this revenue loss on consumers. There’s already a precedent for this. Back on December 9th, Eater Chicago reported that after their city council enacted a similar 15% cap, third party app DoorDash soon followed with a $1.50 “Chicago fee” to cover the cost of their lost revenue. Las Vegas currently has a similar $2.00 DoorDash fee. In a statement by the company, here’s what they had to say on the matter. Via Eater Chicago:

“Chicago has temporarily capped the fees that we may charge local restaurants. To continue to offer you convenient delivery while ensuring that Dashers are active and earning, you will now see a charge added to Chicago orders.”

There are many ways in which you can look at this whole situation. First, the move by the BC government is big. It’ll help immediately. Saving upwards of 15% per order when many dining rooms sit empty will certainly give restaurants a greater chance of survival.

Furthermore, passing along this tax to customers should not surprise anyone. As a business, doing so is based around the simple economics of capitalism. Being slapped with a new levy isn’t going to give any of these companies a conscience, so if you’re hoping for one, dream on.

Also, if I’m to be frank, leaving aside the insane valuation of DoorDash’s current position on the public market, one must realize the simple truth between the sheets of the partnership which connects delivery apps and restaurants - both operate under the guise of undervaluing their services. The two of them do so because customers demand they do.

What either side offers is of utmost importance to all citizens. We crave delicious food and drink, which ultimately leads us to seek out both at restaurants. Similarly, when we’re being lazy, we love the convenience of just ordering from our favourite restaurant without the hassle of having to get up off our sofa. The simplicity of both transactions has led to the proliferation of restaurants everywhere and to the aforementioned third party apps many enjoy daily.

How they operate and function comes down to what we’re willing to accept. For most reading this now, I’m open to betting a vast majority had no idea of the cost restaurants paid to use third party delivery services. In such a novel and new space, asking such questions precludes from the obvious, that what DoorDash and Uber Eats offer is genius. Caring how they got there is often negligible.

Facebook, Google, Instagram, AirBnb and Uber have all become dominant players in our lives because of their unique services. Regulation and understanding of their businesses and moral practices has taken some time to figure out, and as we have seen today, regulate. But we’re getting there. It’s going to take time but Facebook will be broken up. Google and YouTube possibly as well. The dawn of the computer age has resulted in a massive amount of technological innovation. These companies have given us products we couldn’t dream of living without now. Yet, with how new and fast this age has progressed, their rise has come about with limited to zero regulation. Essentially, many took a mile when they should have taken a foot.

Saving restaurants from being gouged a 30% fee from DoorDash is a good thing. But just as we laud such oversight, realizing that DoorDash as a company has yet to turn a profit should ring in one’s ears to wonder why? It took DoorDash the great fortune of a pandemic to luck out and seek an IPO. With heavy competition all around, I highly doubt it will ever turn a profit, especially once dining rooms re-open. This comes with the awareness that Dashers are paid barely above minimum wage with zero benefits. This only happens because Dashers are not considered employees. We have laws for the old guard, but we’re not there yet for this new breed. California tried recently with Prop 22 but failed to change the status quo. Ironically, even as DoorDash and Uber continue to skirt labour laws, at what cost does their workforce suffer? Who gets squeezed along the way?

The unprofitability of global third party delivery apps strikes at the centre of why I cried slavery a few weeks back when I learned of the horrendous working conditions of Canada’s temporary seasonal workers program. We want everything as cheap as possible, even it means companies must cut corners to do so. For Uber and DoorDash to pay drivers living wages, with benefits and all the bells and whistles we’d hope for with most corporate companies, the cost of each Uber ride would have to go up significantly. We love the service, but are we ready to pay for what it truly costs to run it?

Like restaurants, no, we are not.

Until that day comes, this tax will help restaurants now but it won’t solve the underlying problem the industry has struggled with for decades. That we live in a world where most get paid very little, while some get paid way too much.

So many restaurants barely made ends meet before the pandemic and it’s not because they were run by moronic owners. The system is broken, much like how the system between delivery apps, restaurants and consumers is broken. Regulation and understanding by the public might one day get us to where we need to go. Hopefully we do. In the meantime, I’ll leave you with this quote from Mireya Loza, she’s a visiting assistant professor at Georgetown University who specializes in food studies and labor. Her quote is from a piece by Jaya Saxena from Eater.

“And coming to the understanding that dining out has long depended on another food supply person’s poverty should emphasize the fact that the restaurant system is already broken, and that it requires some rebuilding. “I think oftentimes we think that entrepreneurs are creating jobs and that’s the important thing, but we’re not asking what kind of jobs they’re creating,” says Loza. “And if they’re not creating [good] jobs, it’s worth questioning: is their business valuable to society, to everyone?” 

Loza, Sprouse, and Cornelius all hope the pandemic will provide the opportunity for an overhaul. “We now fundamentally can really see that all of these individuals that hold up our food system are not only essential workers, but they are highly, highly exploited and marginalized workers,” says Loza. “And if this doesn’t convince us that we need to double down and rethink what it is that we prioritize within this food system and how we can reimagine a more just food system, I don’t know when we’ll have another opening like this.” By prioritizing workers, and being honest and transparent with customers, restaurants can become spaces of true community and hospitality. Maybe food will cost more. Maybe some people won’t be able to eat out as often as they used to. But, says Sprouse, “if it comes with people making a real minimum wage, it is, I think, definitely worth it.”

A real minimum wage. A profitable restaurant sector. Restaurateurs and employees thriving. It can happen. Just depends if we think it’s worth it. I have a feeling the pandemic has shown all how vital the restaurant industry truly is to a thriving society. Hopefully we don’t lose sight of this appreciation.