Even if they have to pay commissions of up to 30% of the bill, more and more restaurateurs are using services like Doordash or Uber Eats. These applications that attract millions of consumers are now essential to their survival and are redefining the restaurant industry.
The duty dissected invoices for orders placed through these applications to understand who benefited from these transactions. For a tofu pad thai ordered via Uber Eats, for example, the restaurateur barely receives half of the total amount billed to the consumer at his doorstep.
The restaurant pockets $10.77 on this dish paid $21.64 by the customer. The restaurateur will have paid $4.61 in commission to Uber Eats (30%).
With this commission, the restaurateur pays for the delivery, but also and perhaps especially so that his menu is visible on the site of Uber Eats, a vast market place, frequented by a pool of hungry customers who are looking for a meal in a nearby restaurant.
The application also charges delivery and service fees to the consumer. It is also necessary to count the tip to the delivery man.
Since December 20, restaurateurs have benefited from a law that temporarily caps the fees collected by delivery platforms at 20% during health restrictions. During his research, The duty knowingly calculated a commission of 30% since the usual rate will apply from March 14, when all the measures will be lifted.
The vice-president of public and governmental affairs of the Association Restauration Québec (ARQ), Martin Vézina, regrets that its members have to share the bill with the delivery giants. “These costs are significant. Imagine, when we add a $40 bottle of alcohol for the same trip, we will give a $12 commission for putting a bottle in a bag, which will go in the same vehicle, to go to the same place ” , laments Mr. Vézina.
The commission, fixed by contract, usually varies between 25 and 30%. Only certain large restaurant chains benefit from preferential rates, such as St-Hubert, Mandy’s or Pizza Hut. “We were able to negotiate the fees with the volume we have, for all our branches,” says Josée Vaillancourt, communications manager for the St-Hubert Group.
Ceiling for good?
In Quebec, the three opposition parties advocate a 20% cap on fees. “If having such high fees is not acceptable during the pandemic, it is not more so in normal times”, launches Ruba Ghazal, spokesperson for Quebec solidaire in terms of the economy. “Big delivery app companies need to stop scamming small restaurateurs, who feel like they’re being taken by the throat,” adds Ms.me Ghazal. A position that the Liberal Party of Quebec also espouses. The Parti Québécois wants to extend the cap for a period of two years post-pandemic.
In interview with The duty, the Minister of Agriculture, Fisheries and Food, André Lamontagne, does not intend to modify the law. “In a context where restaurants can operate normally, there are no plans to intervene in the market to regulate how relations should be between merchants and people who provide services,” he said.
“There are different services to which the restaurateur can subscribe or not. There are also various Quebec services, excellent solutions on the Quebec market that have the advantage of attractive cost,” adds Mr. Lamontagne.
A model completely turned upside down
Reza Sedighi, owner of La New York pizzeria, has long provided his own deliveries. Until he is no longer able to do so, for lack of personnel. Today, it is about 125 deliveries per week that he entrusts to Uber Eats. “The market has been unbalanced by the arrival of Uber. I wasn’t even able to find delivery people anymore. They would prefer to work for the applications, when they wanted…”, specifies Mr. Sedighi.
The St-Hubert group has decided to continue to ensure its deliveries via its own application, while using Uber Eats or Doordash. “We have been providing this service for years. But these applications bring us a varied clientele, sometimes tourists, who would not have been on our site without this delivery service,” observes Josée Vaillancourt, communications manager for the St-Hubert group.
Towards more flexible tariffs
Uber Eats announced on Monday the launch of a new, more flexible price list which will be applied next spring. In particular, restaurateurs will be able to choose to use only delivery services by paying a 20% commission. No marketing services will be offered to them. The restaurant will not have visibility on the application. Consumers will therefore already have to know the restaurant and type its name into the search engine to access its menu. They will also pay higher delivery costs.
“Uber Eats doesn’t just facilitate delivery. We also do marketing for restaurants, we generate new customers for them. Over the past few months, many restaurants have told us that they have their own customer base and only want to have a delivery facilitation service,” explains Jonathan Hamel, public affairs manager for Uber Eats in Quebec.
Doordash also played the flexibility card by launching similar options in April 2021.
Local solutions?
Doordash and Uber Eats share the global home meal delivery market. At 4and quarter of 2021, Uber Eats had revenue of US$2.4 billion, and Doordash of US$1.3 billion.
New local apps like UEAT, RestoLoco, Chk Plz or Radish Coop have emerged over the past few years, with very competitive rates compared to delivery giants. The Association Restauration Québec (ARQ) strongly believes in a local solution. “We have to change consumption habits, put several local delivery players together. We want to give back some control to restaurateurs through a new platform, a marketplace. It’s very exploratory,” explains Martin Vézina of the ARQ.
He is full of praise for the UEAT platform, based in Quebec. It allows restaurateurs to manage an integrated delivery service on their own site. Local partners then take care of the delivery. The restaurateur thus keeps in hand all the information about his customers, whose contact details and habits he can know.
“UEAT does not do marketing. It is not a marketplace. Restaurant owners remain in control of their marketing, unlike Uber Eats, which keeps all consumer information to itself. “We equip restaurateurs to reach as many consumers as possible, without doing it for them. Otherwise it will no longer be an affordable service,” says Alex Martin, CEO of UEAT.
UEAT charges on average less than 2% commission to restaurateurs who then partner with local deliverers such as the Eva cooperative, Livro-Sud or Chasseurs Courrier. They charge an average of $8 for delivery. A cost that the restaurateur can choose to share in part with consumers.
Mr. Martin does not deny the interest of using multinational platforms, but emphasizes the importance of keeping control over the image of his restaurant. “A restaurateur who has worked for decades on his branding works to get loyal customers. He doesn’t want to suddenly leave their marketing in someone else’s hands,” he says.
Despite the local offering, this is still a David vs. Goliath fight. The majority of restaurateurs continue to do business with multinational delivery companies. “We negotiated affordable prices with RestoLoco, which encourages the local economy (18% commission, including delivery). But we didn’t get any positive responses,” says Cyrille Bodiot, general manager of the commercial development company Les Quartiers du Canal in Montreal. “Many establishments prefer to go to Uber Eats and Doordash, given the publicity and scale of these platforms. »