The Ontario government has proposed new legislation that will cap the commission fees of third-party delivery services in COVID-19 hotspots.
If passed, the Supporting Local Restaurants Act will cap the fees charged by third-party delivery services, like Uber Eats and SkipTheDishes, in areas where indoor dining is prohibited.
Premier Doug Ford announced last Friday that the city of Toronto and neighbouring Peel Region would enter a 28-day lockdown, meaning restaurants would not be able to offer indoor or patio dining at their restaurants, and would be limited to pick-up and delivery options only.
While this is not the first time restaurants have faced this challenge, it could be the final setback that puts their business into a collapse.
Amidst the pandemic, Toronto residents have learned about the impact third-party delivery services have on businesses through social media.
In some cases, delivery partners are charging up to 30 percent of every sale, which have narrowed profits for many small restaurants that rely on delivery apps to keep their business afloat.
Restaurant owners can expect to see a cap of 15 percent on delivery service fees, said Prabmeet Sarkaria, the associate minister of small business, at a news conference on Thursday.
Premier Ford has previously urged delivery services to lower commission fees to help small businesses weather the pandemic.
While some delivery companies have done so voluntarily, like SkipTheDishes, others have been reluctant.
Mayor John Tory expressed his support in the Supporting Local Restaurants Act.
“This is the right thing to do and will help our restaurants who are working to provide takeout and delivery options right now,” said Tory in a press release.
Tory says the city will continue to do what they can to assist restaurants through the pandemic, and reminds residents to “support those restaurants through takeout and delivery during the period of the current restrictions.”
