A few months ago, Victoria-based delivery app Tutti owed $9,000 to Zambri’s, an Italian restaurant in downtown Victoria. 

“It was March, and my accountant flagged a bunch of failed payments to us,” said Calen McNeil, co-owner of Zambri’s. 

When McNeil found out how much Tutti owed, he immediately took Zambri’s off the Tutti app, meaning people could no longer order from his restaurant through that platform. Then he threatened to sue. “That’s when they answered and paid us,” he said. 

McNeil was an outlier: several prominent Victoria restaurants went public this week with accusations that the company hadn’t paid them thousands each in outstanding bills. J&J Wonton Noodle House has taken Tutti’s parent company to court for more than $220,000 in allegedly missed payments. Other accusers include Cold Comfort Ice Cream and Agrius, though McNeil says he knows of a dozen restaurants who are having trouble being paid.

Neither Tutti’s parent company, Kavl Technology, nor its CEO, Kaisa Aierken, has responded to multiple requests for comment from Capital Daily.

McNeil said he couldn’t believe he didn’t catch on earlier. “We have the oversight to catch things like this,” he said. But with an industry labour shortage, inflation, and rent, McNeil understands how this might get away from a business that’s not as equipped as his. “Restaurants right now are scrambling,” he said.

In April, Tutti paid Zambri's in full. But the same can’t be said for many other local restaurants.

‘Under-financed and under-capitalized’

The way delivery services such as Tutti and UberEats operate is by taking a percentage of the sale after the orders have been processed. When a customer orders food through the delivery app, they pay the app, which is then supposed to pay the restaurant its cut—usually around 70-80% of the sale.

McNeil said Zambri’s receives its percentage from DoorDash, a competitor to Tutti, every Thursday. Allegedly, Tutti was either not paying or skipping payments, and McNeil chalks up the company’s inability to pay to bad business sense.

“They are under-financed and under-capitalized; they use the restaurant's money to help fund their own business.” he said. “Either you’re doing that deliberately, which is a Ponzi scheme, or you’re just incompetent—you started a business and it failed.”

McNeil, who is also co-owner of Big Wheel Burger, tried to start a delivery service of his own over a year ago. “We couldn’t do it,” he said. The delivery cost added 30% to the bill—leaving him wondering how Tutti could have imagined it would get by charging less than half that much.

That cost, he said, was mostly to pay a driver and dispatcher’s hourly wage, and have the supplies to deliver the food. “Places like DoorDash have the capacity because they have the capital and they’re publicly funded,” he said. “Tutti just doesn’t have that reach.”

McNeil is also the director for the Bread & Butter Collective—a group of 75 local restaurants providing resources to one another. He says the group will support those who are facing revenue losses from the app.  “The Bread & Butter Collective will be there to give advice and try to help and try to make sure that none of our members go under as a result,” he said.

McNeil said the ordeal has been yet another threat to businesses that have suffered tremendously through the pandemic, labour shortages, and inflation of the past two years. 

“Circumstances are already tough,” he said. “[Zambri’s] is one of the fortunate ones.”