Ontario to Enforce Commission Cap on Food Delivery Apps
Aimed at protecting local restaurants from high delivery fees, the Ontario government is introducing the Supporting Local Restaurants Act, 2020, which enforces a commission cap on food delivery services operating in the province.
Currently, fees placed on restaurants by food delivery apps can reach as high as 30% in Ontario. Under the new legislation, restaurants should expect a cap of 15% for delivery fees, similar to what has been put in place in New York City, with an overall cap of 20% inclusive of all fees.
If passed, the legislation would:
- Cap the rates charged by food delivery service companies and apps in areas where indoor dining is prohibited.
- Permit fines of up to $10 million to food delivery service companies that do not comply with the law.
- Provide food delivery service company employees or contractors who perform delivery services with protection that their compensation will not be affected by these changes.
In an emailed statement to iPhone in Canada, SkipTheDishes expressed disappointment at the proposed regulation, noting that it has been providing what it says is industry-leading support to small businesses since the start of the pandemic.
Below is the statement provided by SkipTheDishes:
While we are glad the Ontario government recognizes the work SkipTheDishes has been doing since March to support our restaurant partners, we are disappointed that they have decided to regulate private enterprise by enforcing a commission cap on food delivery services operating in the province.
Our restaurant partners are of the utmost importance to us. SkipTheDishes is a proud Canadian brand, and since the start of the pandemic we’ve worked tirelessly beside our restaurant partners and have proactively provided them with over $30 million dollars in industry leading support since March, months before being called upon by Premier Ford or Mayor Tory to do so.
When taking into account the 25% commission rebate we have implemented in affected regions of the province, all local, independent restaurant partners on the SkipTheDishes platform are already paying less than 20% in commission while their dining rooms are closed.
If the regulation is passed, restaurants will be able to file complaints online if a food delivery app has overcharged fees in excess of the cap.