The Ontario government is introducing legislation to cap the delivery rates charged by food delivery services. The maximum percentage of a food order’s price that apps like Uber Eats can charge for delivery will be capped at 15%, total costs at 20%. It would only apply to non-chain restaurants in regions like Peel and Toronto, which are in lockdown.
This is in contrast to the current rates which can sometimes reach 30%. The move is designed to lower costs for restaurants located in areas where indoor dining has been prohibited.
“Ontario’s small and independent restaurants have shouldered an outsized share of COVID-19’s economic burdens,” wrote Progressive Conservative Member Prabmeet Singh in a press release. Singh serves as an associate Minister of ‘Small Business and Red Tape Reduction.’ He believes the legislation, once passed, will help by, “providing a solution that will help our local restaurants when every little bit helps.”
Why not Oakville?
Halton is currently in the Red Level of provincial COVID precautions, which means that restaurants can still seat up to 10 customers indoors. That being said, Oakville restaurants would benefit from being included in the regions listed in the bill. Delivery apps have faced criticism this year for their high delivery rates and “service fees.”
As revenue from in-person diners decreases, delivery and pickup options are becoming more and more important for food and drink establishments. Ontario’s accommodation and food services sector was showing signs of recovery in the late summer and into September. However, October’s Labour Force Survey showed that job growth in the industry had stalled again. This is probably because of the reintroduction of COVID-19 safety measures during the second wave and could affect more than 300 businesses across Halton. Some business owners believe the fee caps should be applied in Oakville as well.
“I think it’s a brilliant move that can really help alleviate the stress on the industry,” says Julia Hanna, local restauranteur and activist. But, she thinks the fee cap should be in place here too. In her opinion, food delivery services can often have an unfair amount of control over their dealings with food places.
“Don’t get me wrong, these services are needed,” she says. “They are a godsend to our industry. But they’re not even acting as a Band-Aid right now when they’re charging 30%.”
Matthew Granger agrees. Granger is the general manager at Hanna’s Oakville restaurant Ritorno. He believes that something needs to be done to make businesses’ interactions with food delivery services more equitable.
“The problem with these services is that we’re not even connected with the customer; Skip [SkipTheDishes] is dealing with the customers,” he says, adding. “Another dark side of these apps is the in-app promotion. If you don’t use their in-app delivery services, you’ll see your sales decrease substantially.”
Enforcement of Act TBA
The 2020 lockdowns have created a new business ecosystem in Oakville and independent businesses will begin to rely on new, more important partners as the pandemic continues into the new year.
Hanna points out that some forms of industry are thriving during all of this.
“They’re doing really well and that’s great. You can do well, but you shouldn’t exploit.”
The act is not official yet, but will come into force in lockdown regions once declared by Ontario’s Lieutenant Governor.