New delivery service coming to Toronto will charge restaurants way less than Uber Eats
Food delivery services have seen some major blowback from restaurants in recent months for their commission fees, but a new app called Foodzinga is promising to do away with those exorbitant costs when it arrives in Toronto next month.
The app, which launched in Winnipeg last year, is making its move to Toronto in July. When it arrives, and all goes according to plan, it will have the lowest commission rates out of all the major delivery services.
According to its founder Daniel Lolobrigida, Foodzinga doesn't charge any sign-up fees, monthly or annual feels, or even cancellation fees.
And when it comes to commission rates, Foodzinga only charges 7 per cent across the board.
"We are trying to start a small revolution," says Lolobrigida.
That number seems suspiciously low, especially compared to other apps like Uber Eats, which has come under fire for charging restaurants 30 per cent of every order, or DoorDash and SkipTheDishes, which charge between 10 to 20 per cent.
Public backlash has seen several Toronto businesses publicly boycott Uber Eats, urging other restaurants to do the same.
Meanwhile, ordering directly from restaurants as a way to dodge commission fees has become a more popular method of supporting local during the pandemic.
But Lolobrigida says that 7 per cent is more than enough for Foodzinga to operate.
"It's very profitable, very fair," he says. "I think that the current delivery platforms make restaurants believe that they, and only they, can bring customers to restaurants, which [has] created an extreme dependency and a toxic relationship between them."
Like other delivery services, customers and restaurants operate directly through the Foodzinga app. Drivers sign up and make 100 per cent of the tips they receive from customers through the app.
It sounds pretty no frills, responsible solely for food delivery, nothing more.
Foodzinga also doesn't run their own promotions, unlike other apps who offer discounts and free delivery options that aren't negotiated with or even benefit the businesses they're picking up from.
"The decision belongs to the restaurant," said Lolobrigida. "If the restaurant decides to offer the free delivery, we don't take over."
Delivery fees are flat rates based on distance, ranging from $3.50 to $9. It's a heftier minimum than most other apps, but there's a bright side: no service fees, which can range up to 11 per cent on apps like DoorDash, on top of fees and tips.
Lolobrigida is giving other apps an extra run for the money but offering restaurants migrating over from services like Uber Eats or DoorDash a special rate of 4.5 per cent on commission.
"Why do we have companies worth [billions] when restaurants are broke?"
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