Back in November, the Ontario provincial government announced legislation to cap the fees that food delivery companies like Uber Eats and Doordash can charge restaurants.
The government now says that legislation, dubbed the ‘Supporting Local Restaurants Act, 2020,’ will come into effect starting December 19th at 12:01am. According to a release from the province, food delivery companies “will be required to limit the rates they charge to 20 percent for each transaction — with no more than 15 percent for commission for food delivery services.”
The cap will only apply in areas where indoor dining has been prohibited in order to help restaurants in those areas stay in business. Additionally, if indoor dining restrictions come to new regions, the fee cap will apply there as well. The new caps apply to food delivery companies that serve 500 or more restaurants.
To support the change, the province says it will provide food delivery company employees or contractors who perform delivery services with protection to prevent their compensation from being reduced in response to the changes. On top of that, the government will let restaurants and food delivery company employees or contractors file online complaints if they are charged fees that exceed the cap or if compensation is reduced.
Finally, the province says it will impose fines of up to $10 million on food delivery service companies that fail to comply with the new legislation.
Hopefully, the cap will help ease the pressure on smaller restaurants that may be struggling in areas where there are indoor dining restrictions.