restaurant delivery app

Ontario to cap third-party food delivery app fees in lockdown zones

Some third-party restaurant delivery apps charge as much as 30 per cent to transport food from a restaurant to your home. In the best of times, these fees are a lot for restaurant owners to shoulder but when you add the current pandemic lockdown to the mix, delivery app fees are unsustainable.

New legislation delivered under the Supporting Local Restaurants Act 2020 will put an end to the highest of fees for restaurants struggling in lockdown zones.

Premier Doug Ford has made his dislike of delivery app fees known previously when he pleaded with delivery companies to lower fees during the pandemic.

While many restaurants survived the first wave of the virus despite high fees charged by apps such as Uber Eats, the province is set to make charging those fees impossible. The new Act would impose a cap of 15 per cent on delivery fees and a 20 per cent limit on all additional fees.

App companies caught breaking this new law could be charged up to $10 million. New York City recently put similar laws into place when the New York City council voted to cap app delivery fees at 15 per cent. The new Ontario law would apply to any restaurants in lockdown zones of Toronto and Peel Region currently offering delivery options.

Another aspect of the Supporting Local Restaurants Act is a clause protecting app employees. Under the new law, contractors and employees working for food delivery apps cannot be impacted by the percentage limit.

“Ontario’s small and independent restaurants have shouldered an outsized share of COVID-19’s economic burdens,” said Minister Sarkaria, in a press release. “But through it all, they’ve continued to serve our communities, our families and have lifted our spirits. With this legislation, our government is helping local businesses stay in business and providing a solution that will help our local restaurants when every little bit helps.”

The province is also offering restaurant owners relief in the form of financial relief with a $600-million fund to help with taxes and utility bills. The Supporting Local Restaurants Act is expected to be in place swiftly and will apply to the GTA and any area in Ontario where restaurants are currently closed.

Article exclusive to TRNTO