Calgary to ask Alberta to cap food delivery app fees

If Calgary's mayor has his way, local restaurants won't have to pay delivery apps sky-high fees for connecting you to ginger beef or pho.

City council voted unanimously on Tuesday evening to request the mayor write a letter to the Alberta jobs minister and premier, requesting the province consider enacting legislation that would cap delivery app fees at 15 per cent, with the focus of the legislation directed at supporting independent restaurants. 

"On the one hand, the creation of the new app marketplace with third-party delivery apps … has really led to a massive increase in business for many of these restaurants," Calgary Mayor Naheed Nenshi said. 

"However … this business has not yet rationally developed a pricing model in my opinion."

Nenshi said the restaurant and hospitality industry has been hit hard by the COVID-19 pandemic, especially by the new restrictions that have closed in-person service until at least mid-January. 

Many restaurants are now relying on apps like SkipTheDishes, DoorDash and UberEats as their main source of income, but some apps charge up to 30 per cent of an order's value — encroaching on restaurants' already thin margins. 

"This is not about demonizing the third party apps. It is about supporting small local restaurants," Nenshi. 

New York and Los Angeles have enacted similar caps, as well as Ontario which permits fines up to $10 million for companies that break the law and includes protection to ensure deliver drivers' compensation won't be impacted by the changes. 

B.C. and Manitoba are also exploring fee cap legislation.