New limits placed on how much delivery apps can take from restaurants in Nova Scotia

Third-party companies like Uber Eats, DoorDash and SkipTheDishes will now be limited in terms of how much they're allowed to charge Nova Scotia restaurants for using their delivery service — something local restaurants hope will increase profits.

"If we're not making money through these national third-party apps, it's a really frustrating way to do business," said John Scott, the co-owner of Steak And Stein in Halifax.

On Wednesday, the Nova Scotia government announced a 15 per cent cap on fees restaurants and bars pay for third-party deliveries and a 10 per cent cap if a customer uses a food delivery app to order.

Luc Erjavec, Atlantic vice-president for Restaurants Canada, said the new cap will definitely help restaurants raise their profits.

"This will put thousands of dollars back into the pockets of operators at a time when they're losing money, struggling to survive, accumulating debt. This is a big deal," said Erjavec.

'We're just not seeing the extra money'

The change, which came into effect Wednesday, is being implemented under the Emergency Management Act and will continue until the state of emergency ends.

During the pandemic, various restaurants throughout the province have chosen to use apps to deliver their food, and some say they are being charged too much.

Cindy Wheatley, the owner of Boneheads BBQ on Barrington Street in Halifax, said though they're thankful for the customers they get through apps, using those services to order makes things a lot more difficult for restaurants.

"We're just not seeing the extra money. The profit margins are so low already, when the apps take their large cuts up to 30 per cent, it really hurts," said Wheatley. "By the time we pay those fees, we're not making any money on those orders."

Smaller, local options for delivery

HaliHub, an independent food-delivery business based in Halifax, said those apps charge restaurants up to three times more than it does to deliver. 

"We've got a network of about 40 drivers throughout the [Halifax Regional Municipality]. With our local services, we recognized earlier on that in order for restaurants to survive through this pandemic, they had to be able to deliver their product at a cost that works for them," said Brian MacDonald, who runs HaliHub.

With a small, four-person office, he's able to charge fees as low as nine per cent and still make a profit.

Scott said the number of people ordering through third-party apps has drastically increased since before the pandemic when those orders only represented five to eight per cent of the business Steak And Stein received.

"Today, third-party apps cover about 50 to 75 per cent of our business when we're closed [to the public], and 25 to 30 per cent when we're open," said Scott.

Scott said they haven't been able to turn a profit during the pandemic using third-party delivery apps, and he's confused as to why local restaurants seem to be charged more than larger chains.

"It's just not fair when I know some of the larger chains like McDonald's and Burger King and so on, they get charged a 10 per cent fee," said Scott. 

He said the nine per cent fee charged by local delivery services like HaliHub is a "survivable rate."

Fees cover operating costs

Uber Eats Canada told CBC News in an email that its fees cover operating costs, and it will keep the fees capped until told otherwise.

"We are compliant with these measures. Like our restaurant partners, we look forward to a time when restrictions are lifted, enabling restaurants to return to dine-in as a main revenue channel," Uber Eats Canada said in an email.

SkipTheDishes and DoorDash told CBC News via email they were disappointed not to be consulted on the new cap plan.

Wheatley said she welcomes the cap announcement, but has questions about how it will be implemented. 

"It's a really good thing. I kind of wish it would have happened a little bit sooner," she said.

Scott said he doesn't see online ordering going away any time soon, so he's leaning more and more toward using local delivery services.

"It's something we've been highly advertising and marketing to make people aware what's available, local and more sustainable," said Scott.