Ontario has officially begun capping the fees charged by food delivery apps under its Supporting Local Restaurants Act, 2020.
The act took effect from 12:01 a.m. on December 19. The temporary Ontario food delivery cap is intended to help small and independent restaurants survive the COVID-19 pandemic, says a government release.
Food delivery companies such as SkipTheDishes and Door Dash will now be required to limit the rates they charge to 20 per cent for each transaction, with no more than 15 per cent for commission for food delivery services.
The Ontario food delivery cap applies to the largest food delivery companies in the province that serve 500 or more restaurants and will be in force in areas where indoor dining is prohibited. Moving forward, if indoor dining is banned in new regions of Ontario, the cap will apply.
The measure has been introduced despite mixed reviews. The Ontario Restaurant, Hotel, and Motel Association (ORHMA) previously voiced support for the move, but it has faced opposition from delivery services and workers unions.
To support this change, the government says it will:
- Provide food delivery company employees or contractors who perform delivery services with protection that their compensation will not be reduced in response to these changes.
- Enable restaurants and food delivery company employees or contractors to file online complaints if they are charged fees that exceed the cap or if their compensation or payments are reduced.
- Impose fines of up to $10 million to food delivery service companies that do not comply with the law.
“This new cap will provide needed support for small and independent restaurants in communities weighed down by the devastating effects of COVID-19,” said Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction.
“We’re all in this together. Food delivery companies, consumers and communities are all part of the solution. This holiday season, let’s support local restaurants by getting takeout, ordering delivery, or buying gift cards for family and friends. By giving to the people who mean so much to us, we can give back to the restaurants that make our main streets bright.”
The Supporting Local Restaurants Act is one of many ways the government is supporting small businesses and restaurants when and where they need it most. Other measures include permanently allowing licensed restaurants and bars to sell alcohol with delivery and takeout orders, and offering up to $1,000 to help small businesses with two to nine employees to recover the costs of personal protective equipment (PPE) through the $60-million Main Street Relief Grant.
However, last week, ORHMA president Tony Elenis wrote to Premier Doug Ford to urge the province to adjust foodservice measures before the foodservice sector suffers more damaging repercussions.
