CELPIP Reading Part 4 Practice Test: Capping Food-Delivery App Commissions

During the pandemic, food-delivery apps were a lifeline for many restaurants; some owners now regard them as a millstone. The platforms typically retain 25 to 30 percent of every order, and Manitoba’s government is contemplating legislation capping commissions at 15 percent, making permanent an idea several provinces tried temporarily during the pandemic.

Luis Carvalho, whose Portuguese grill in Winnipeg’s West End now earns nearly 40 percent of its sales through delivery, calculates that on a $50 order the app keeps up to $15, leaving him less than a dollar after food and wages. When he raised his menu prices on the apps, customers noticed and grumbled in online reviews. Abandoning the platforms is unthinkable, since that is where the customers are. “That’s not a partnership,” he remarks. “That’s a toll booth.”

Diane Fontaine, the minister responsible, casts the cap as a matter of equity. “Independent restaurants have no leverage against multinational platforms,” she argues, and the largest apps posted record profits last year even as dozens of local establishments closed. Her bill would also oblige apps to show customers an itemized breakdown of where their money goes.

Megan Aldridge of the Canadian Delivery Platforms Association counters that commissions finance marketing, customer service and the couriers themselves. “Cap them and those costs merely land on customers through higher delivery fees,” she warns, “or apps curtail service in smaller towns.” Restaurants, she notes, can already select lower-commission plans offering fewer features, and many would never reach these customers otherwise.

Economist Raymond Oduya of Assiniboine Valley University recalls that where temporary caps were imposed, some apps appended new “service fees” to customers’ bills within weeks. Price controls, in his judgment, rarely succeed in markets with so many moving parts; he would rather foster competition, for instance by supporting delivery co-operatives owned by restaurants. He also questions the 15 percent figure, given that rural deliveries are substantially pricier.

Jasmin Toor, who delivers for two apps in Brandon, earns about $18 an hour before gas and has watched tips dwindle as customers tire of escalating surcharges. She knows that “whenever the companies lose money, couriers suffer first.” Yet she supports the cap, reasoning that if restaurants close, nothing remains to deliver.

Ordering takeout twice a week, I consider this cap 6. Choose…long overduea well-meaning mistakea carefully balanced compromisefar too timid. Ms. Fontaine’s sympathy for neighbourhood restaurants is admirable, but Dr. Oduya’s evidence suggests the apps would simply 7. Choose…pass the cost on to dinersabandon rural communitiessqueeze couriers’ hourly earningsoffer pared-down plans, leaving 8. Choose…the tech giantsthe eateriespeople like metaxpayers at large to absorb the cap. A pizza already arrives burdened with a delivery fee, a service fee and a tip, and my patience for further surcharges is exhausted. Mr. Carvalho has my sympathy, yet as Ms. Aldridge observes, owners are not obliged to accept the priciest arrangement; they could 9. Choose…handle deliveries with their own staffraise their app pricesjoin a co-operativesettle for fewer features. If the province genuinely wants to help, it should nurture 10. Choose…higher courier wagescompetition from restaurant-owned servicesitemized receipts for every single customera return to the temporary pandemic caps instead of dictating what private companies may charge.