third-party delivery fees

Quebec temporarily caps 3rd-party delivery fees

The province’s government has acted amid a fierce debate across the province and beyond.

By Tom Nightingale

The Quebec provincial government has unanimously adopted legislation that temporarily caps large-scale third-party delivery fees in the province while indoor dining remains closed.

The new temporary law, Bill 87, caps the commissions charged to restaurants by delivery platforms that serve at least 500 restaurants at a maximum of 20 per cent of the order’s value before taxes.

The bill will levy fines for those that don’t comply. Those fines could range from $5,000 to $500,000 for individuals and $15,000 and $1.5 million in other cases, depending on the infraction. The bill also prohibits companies from reducing the amount paid to delivery drivers to compensate for the impact of the fee cap.

Minister of Agriculture, Fisheries and Food André Lamontagne, previously asked Uber Eats, DoorDash, and SkipTheDishes to voluntarily cap their fees. Only SkipTheDishes, which already had its fees at 20 per cent, agreed.

Now, Lamontagne’s legislation limits the amount third-party delivery services can charge to restaurants, but only while dining rooms are ordered closed. Once in-person dining service resumes, companies will once again be allowed to charge whatever commission they want.

RELATED: The dichotomy of third-party delivery services

The move is, in part, a response to calls from restaurant owners to cap the fees.

Lamontagne said when the issue was brought to his attention in January, he felt it was necessary to act to help restaurant owners.

“They’ve been hit very hard by the COVID and we thought we’d … try to give them a break,” he told CBC.

The debate around third-party fees has raged throughout 2021 so far as foodservice operations across the country continue to be severely impacted by COVID-19.

On top of fees paid by users for delivery, many of the apps also charge a commission to restaurants for connecting them with clients and drivers. Some are reputedly charging as much as 30 per cent for each order.

In January, Montreal restaurant Deli Boyz had filed a class-action lawsuit against food delivery companies, seeking damages for alleged exorbitant and abusive commissions charged by third-party companies.

Martin Vézina, spokesperson for the Quebec Restaurant Association, called the move to table legislation “great news.” He says the association has been pushing the government for this kind of help since January, when the provincewide overnight curfew came into effect.

Lamontagne added, per Global: “We hear the requests of the restaurateurs and we consider it a priority to help them through this difficult time.”

Restaurants in both Quebec City and Montreal were forced to close down their dining rooms in October 2020 when the second wave of the virus hit the province, leaving many relying solely on takeout, pickup and delivery to stay afloat. The situation has recently been complicated by a curfew from 8 p.m. to 5 a.m. which has been pushing many restaurants to rely on third-party delivery apps perhaps more than ever before.

Following suit

By passing the legislation, Quebec has followed other major provinces in capping third-party delivery fees.

On December 19, Ontario limited fees for third-party delivery apps to 15 per cent in regions like Toronto where indoor dining had been prohibited due to the pandemic. On December 27, B.C. followed suit with its own 15-per-cent cap on third-party deliveries as well as an additional 5-per-cent cap for all other related services provided to restaurants for the use of these platforms.

In response, Canadian delivery giant SkipTheDishes made headlines recently by introducing a controversial new $0.99 surcharge on orders in B.C. in response to the province’s cap.