The Government is being urged to consider placing a cap on how much third party food delivery apps can take as commission by the Restaurant Association of New Zealand.
Uber Eats, the industry leader when it comes to delivery apps, charges up to 35 per cent in commission on its orders, which the association argues only leaves a profit margin of a maximum of 5 per cent for all restaurants.
"Without margins in mind, Uber Eats commissions are crippling for many hospitality businesses," says association CEO Marisa Bidois.
She says restaurants "don't feel they can take the risk" by not using third-party services, fearing they may struggle without the customer reach that apps like Uber Eats allow.
Other areas of the world have already moved towards placing a cap on delivery services, like San Francisco, where there is a 15 per cent cap on commissions charged from food delivery platforms.
Ms Bidois says it's a "bitter pill to swallow" for businesses where employers are struggling to pay staff during the lockdown, with some having to work for free to keep themselves afloat without in-store sales.
"With all shop fronts remaining closed and as the market leaders, Uber Eats is essentially taking the shift off the industry's back."