Toronto City Council has unanimously approved a motion presented by Councillor Michael Ford to request the Province of Ontario to implement a temporary cap on the commissions of food delivery service companies.
A City press release notes that as Toronto fights the second wave of COVID-19, the restaurant sector across the city is being severely impacted financially due to significantly decreased diner and takeout volumes. Over the past week alone, overall diner volumes in Toronto were down almost 90% compared to the same time last year.
With many small and independently owned restaurants now relying on takeout and delivery, affordable food delivery services are critical. Some of Toronto’s smallest “mom-and-pop” shops are being charged up to 30% off
their bottom line, which is unsustainable. The City has also seen some restaurants not even open their doors because it isn’t viable for them to do so.
Throughout the pandemic, the restaurant industry has worked closely with the City to curb the spread of COVID-19. However, Toronto does not have the municipal authority to regulate food delivery services companies or cap the fees that they charge. Therefore, Councillor Ford is recommending the City to call on the province to support small businesses in the restaurant industry by placing a temporary cap on the commissions taken by foodservice delivery companies.
“Throughout the pandemic, we have been urging food delivery companies to substantially help their restaurant customers so they can stay in business,” said Tory. “While some companies have offered some help, we have heard from restaurants that more needs to be done right now which is why we are advocating for this emergency action. We will continue to do everything we can at the City to help restaurants get through this pandemic.”
Tony Elenis, President and CEO of the Ontario Restaurant, Hotel & Motel Association (ORHMA) added: “The vast majority of restaurants generate a profit of 2 to 3 per cent from delivery services, with many operating
at a loss. The issue is disproportionately more punitive to smaller businesses. A permanent solution is required through a regulation that caps commission fees. We thank Toronto City Council for their consideration of this motion.”