Summary
Today, Minister Sarkaria introduced legislation that would protect restaurants from high delivery fees charged by some food delivery companies. The Supporting Local Restaurants Act, 2020, if passed, would reduce fees charged by food delivery companies in areas where indoor dining is prohibited to help more small and independent restaurants stay in business.
Currently, fees placed on restaurants by food delivery companies can reach as high as 30% in Ontario. After working with the sector, the government intends to cap delivery fees at 15%, similar to what has been put in place in New York City, with an overall cap of 20% inclusive of all fees. This approach would ensure that delivery drivers’ pay would be protected and delivery apps would not reduce service areas or restaurant selection.
The legislation introduced today, if passed, will:
- Give the government the authority to limit fees by regulation in places where indoor dining is prohibited due to public health measures.
- Permit fines of up to $10 million to food delivery service companies that do not comply with the law.
- Provide food delivery company employees or contractors with protection that their compensation will not be affected by these changes.
Key Messages
- Food delivery services have become lifelines for restaurants and their employees, who in many cases, have seen traffic plummet by 90%.
- Our government has repeatedly called on food delivery companies to do their part and work with restaurants to help the restaurant industry through COVID-19 by instituting fees that are fair to the restaurants they depend on.
- Our government’s proposed legislation, Supporting Local Restaurants Act, 2020 would temporarily reduce food delivery fees to help support Ontario’s small and independent restaurants, sustain the vitality of our main streets and communities, and protect local jobs.
- If passed, the act will:
- Give the government the authority to limit fees by regulation.
- Permit fines of up to $10 million to food delivery service companies that do not comply with the law.
- Provide food delivery company employees or contractors with protection that their compensation will not be affected by these changes.
- Working with restaurants and these delivery companies, we believe we have reached a commission cap that will help out small restaurants while ensuring delivery drivers are protected, and consumers continue to have access to these apps.
- This new legislation will help small businesses stay in business.
- It would introduce clear penalties for food delivery companies that do not comply with lower fees in areas where indoor dining is prohibited.
- Our government will continue to explore all options to support Ontario’s small business and restaurant community, and will never stop fighting to help them weather this storm.