Ontario introduces legislation to cap delivery app fees in COVID-19 hotspots

If the legislation is passed, companies could face up to $10 million in fines for not complying

The Ontario government is moving to put a cap on the rates delivery services such as Uber Eats can charge restaurants in areas where indoor dining is prohibited.

The new legislation, which is called the Supporting Local Restaurants Act, 2020, states that the cap would be 15 percent for delivery fees and 20 percent for all fees.

If the legislation is passed, it would also permit fines of up to $10 million to food delivery services that do not comply with the law. The legislation would also ensure that the changes would not affect food delivery service employees or contractors.

Ontario’s Minister of Small Businesses, Prabmeet Sarkaria, made the announcement on November 26th and stated that the caps are similar to what has been put in place in New York City.

“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,” Sarkaria said in a statement.

The government has outlined that this approach aims to ensure that delivery apps will not reduce service areas or restaurant selection.

SkipTheDishes has responded to legislation and states that: “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.”

This comes as Ontario Premier Doug Ford asked food delivery apps to reduce the cut they take from restaurants and had threatened to take action if they didn’t.

Source: Government of Ontario