Flashcards Drive-Thru Convenience Charge

FlashcardsConvenience Charge
Drive-Thru
Submission 80998
“May I take your order?”
Introduction
I love going to Balzac’s Coffee Shop in
the Tannery in Waterloo because without
fail, every single time I go in there I meet
someone I know in line. It is a cornerstone of
the community of entrepreneurs in that city.
I often get to that shop by transit, sometimes
even by bike. It’s a great experience.
I contrast this to the socially isolated
experience of barking at a speaker box, idling
my vehicle, and picking up a couple extra
unnecessary fatty, salty items while going
through a drive thru window. Which would
you prefer? We have a method to raise funds
for much needed infrastructure, health,
and social initiatives while helping to curb a
number of unhealthy behaviours. We call it
the Drive Thru Convenience Charge.
Submission 80998
Here’s how it works
After implementing this program, patrons
who chose to use the drive-thru window at a
coffee shop or fast food restaurant must pay
a $0.10 Convenience Charge for each coffee
or meal order. Implemented as a municipal
by-law, funds generated by this charge can
be directed to the new transit infrastructure
fund, or a health or social program of choice
by the establishment. This charge partly
provides a dis-incentive to auto use to help
curb congestion, while raising funds for city
building efforts.
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Background and Justification
What’s the problem with drive thrus?
Several cities across Canada have tried
banning drive thrus in recent years (City TV,
2007; Huber, 2008; Russell, 2014). Once seen
as a boon to busy modern life, they are now
understood to have several detrimental impacts:
• They encourage idling, which contributes
GHG to global warming and reduces local
air quality
• They encourage automotive dependency
• They discourage active living
• They encourage unhealthy eating habits,
and are linked to increases in BMI
• They reduce opportunities for impromptu
social connections within the community
Contributions to idling
It is a well-known fact that vehicle emissions
contribute green house gasses (GHG), adding
to global warming, and harming local air
quality. Idling vehicles are exuding unnecessary
emissions, because they are just sitting in one
spot, rather than transporting their occupants(s).
One study conducted in Alberta, estimated
the average idling time in drive-thru locations in
Edmonton to be 47 hours a day, which leads to
an unnecessary 23.5 tonnes of GHG emissions
in that city every day—approximately 8,600
tonnes per year (Baniulis et al., 2006). The total
impact in Ontario can be expected to be even
greater, given a higher total population here.
Submission 80998
Justification
Coffee shops and fast food restaurants
are supported by customers who arrive at
their locations through a variety of means—
including driving, transit, cycling, and walking.
Providing parking and drive-thru facilities is a
very expensive component of doing business.
According to Pamela Blais, non-drivers
essentially subsidize these costs, because they
arrive at the location without using a parking
spot or the drive-thru, yet pay the same price
for their food and drink (2010). Charging a
sur-charge helps to highlight the true cost of
driving to drivers, internalizing the externality
of extra land used for the drive thru. It would
be ideal to charge a surcharge for parking as
well, however this would raise the complexity
of the implementation because there is no
easy way to confirm whether a patron has
walked in or driven in to a location, except at
the drive thru window.
Making us fat!
A recent study found a strong positive
association of density of fast-food restaurant
locations and BMI in Canadian communities
(Hollands, Campbell, Gilliland, & Sarma, 2014).
The greater the ease of access to the fatty,
salty food found in fast-food restaurants, the
greater the likelihood of obesity.
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Project Description
The by-law is intended to be similar to the
plastic bag by-law which experienced a
successful implementation (Draaisma, 2010)—
it is not a tax, but a mandatory charge. Each
drive-thru order will be charged an added fee
of $0.10 This fee will apply to each cup of tea
or coffee (regardless of size), and each meal
or combo (ex. $0.10 applied to the total order
of a burger and fries). Patrons ordering within
the store will not be charged the fee.
Each establishment or chain must donate
or redirect the funds raised to an approved
institution, which can include:
• The Ontario Government’s’ Transit
Infrastructure Fund
• A charity or non-profit focussed on
healthy eating
• An environmental charity
Establishments can use their marketing
expertise to promote their support of a cause
which they believe aligns with the values of
their customers, and are free to build marketing
campaigns around their implementation.
Submission 80998
Program expansion
The program is intended to provide a disincentive to unhealthy behaviours. Research
has shown a connection of increased
consumption of foods high in fat, salt, and sugar
(common in the fast food industry) with obesity.
To help curb consumption of such foods this
program should be expanded to be a surcharge
on all fast food meal items above certain fat,
salt, and sugar limits (to be determined by the
appropriate public health agency).
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Financial Analysis
When fully implemented, this surcharge can
generate upwards of $163 million annually,
for a variety of transportation infrastructure,
environment, health, and city building
initiatives. This is estimated by considering
that the fast food industry in Ontario
represents $10 billion in annual sales (Ontario
Ministry of Agriculture Food and Rural
Affiars, 2013), and the average food order is
$6.12 (Statistics Canada, 2006).
Total industry sales in Ontario
Average meal order Total orders Surcharge
Total potential of annual fund
Submission 80998
It is expected that the restaurant industry
would absorb the bulk of the administration
costs related to this program, however
municipalities and/or the provincial
government would need to invest in audit and
enforcement efforts to ensure the program
is adhered to by establishments. This is
especially true, given that the vision is for
restaurants to be given a choice as to which
organization they contribute the funds too.
$10,015,700,000.00
$6.12
$1,636,552,288.00
$0.10
$163,655,229.00
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Challenges and Vision
Vision
Challenges
One day, all Ontarians will understand
the true cost of driving an automobile and
unhealthy eating habits. We will adjust our
behaviours accordingly to minimize excessive
driving, and lead more active, healthy
lifestyles. This drive thru convenience charge
is one element of broader social policy to
encourage this change.
There are three main groups of stakeholders
who may be opposed to this plan: residents,
business owners, and politicians.
Residents
Of course, no one likes new taxes. Research
shows however, that people are willing to
pay a new tax if it is directly connected to a
benefit and not placed into general government
coffers. If people see that the surcharge will be
applied to transit or transportation initiatives
to help reduce congestion on the roads, they
are more likely to agree to the charge. If the
establishment they are visiting redirects the
funds to another cause that is aligned with their
values—environmental, health, or community
building of a different nature, they are also
likely to be supportive.
Customers are not mandated to pay the
charge—they have choice. The charge can be
avoided by one of the following means:
• Go inside the store to make their purchase
• Bring a re-usable cup (for tea or coffee)
The charge will also be waived for drivers
with a valid disabled sticker—as drive thru
services are helpful for some people with
mobility concerns.
Submission 80998
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Business owners
Government and Politicians
Business owners may fear that this will
reduce their business. This is unlikely—in our
initial survey of 30 local residents, we found
that none would avoid the establishments
altogether, a portion would park and go
inside if they were not in a rush, and most
appreciated the choice. In a recent survey
of the food service industry, 60% ranked
environmental sustainability as an important
issue for their chain (GE Capital Canada, NPD
Group, & FS Strategy, 2014). Business owners
can utilize the surcharge to their advantage,
by aligning their own corporate social
responsibility initiatives to it. For example, a
business can declare that it will match every
$0.10 contribution to the Transit Infrastructure
Fund (or any other designated cause), to help
encourage patronage to the chain.
Policy makers may be hesitant to propose
such a surcharge, and politicians may be even
more fearful of voter backlash. However,
the introduction of such a scheme can be
bridged with strong public engagement and
the use of a trial run prior to a public vote on
implementation. This has been shown to be
effective in the introduction of congestion
charges in London and Stockholm (Eliasson,
2010; Goodwin, 2006; Pridmore & Miola, 2011).
Submission 80998
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“Thank you for your business, have a great day!”
Conclusion
In summary, a simple $0.10 surcharge on
all coffee and fast-food orders placed at a
drive-thru can help curb several unhealthy
behaviours. When used in a portfolio
approach of fiscal tools (such as increased
gas taxes, parking levies, and tolls) to provide
dis-incentives to auto use this can be an
effective means to curb congestion.
We encourage you to take transit, cycle, or
walk into your local coffee shop. This beats
idling your car while sitting in a drive-thru line
up. It will help improve our environment, and
more importantly you may meet some cool
new people while you’re there!
Submission 80998
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Appendix
Works Cited
Baniulis, M., Boyd, C., Dacyk, A., Gobert, J.,
Howery, J., Isaac, K., … Martin, J. (2006).
Double double your drive-thru emissions.
University of Alberta.
Blais, P. (2010). Perverse cities: Hidden
subsides, wonky politics, and urban sprawl.
Vancouver, BC: UBC Press.
City TV. (2007). Toronto ponders drive-thru
ban to help environment. City TV News.
Draaisma, M. (2010). And they said it wouldn’t
catch on. CBC News. Retrieved from
http://www.cbc.ca/news/canada/and-theysaid-it-wouldn-t-catch-on-1.901224
Eliasson, J. (2010). So you’re considering
introducing congestion charging? Here’s
what you need to know. In OECD/ITF
Round Table on Implementing Congestion
Charging.
GE Capital Canada, NPD Group, & FS
Strategy. (2014). 2014 Canadian Chain
Restaurant Industry Review.
Goodwin, P. (2006). The gestation process
for road pricing schemes. Local Transport
Today, 444, 17.
Hollands, S., Campbell, M. K., Gilliland, J.,
& Sarma, S. (2014). Association between
neighbourhood fast-food and full-service
restaurant density and body mass index: A
cross-sectional study of Canadian adults.
Canadian Public Health Association.
Submission 80998
Huber, J. (2008). Cities mull drive-thru bans,
anti-idling bylaws to combat pollution. The
National Post.
Ontario Ministry of Agriculture Food and
Rural Affiars. (2013). Food store and
foodservice industry sales, Ontario and
canada, 2012-2013.
Pridmore, A., & Miola, A. (2011). Public
acceptability of sustainable transport
measures: A review of the literature. In
International Transport Forum Discussion
Papers (pp. 1–24). Leipzig, Germany.
doi:10.1787/2223439x
Russell, A. (2014). Mississauga mayor wants
stricter enforcement on drive-thru idling.
Global News, 2014–2015.
Statistics Canada. (2006). Canadians
Spending More Eating Out. CYB Overview
2006.
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