Food delivery helps ease drop in ride-sharing for Uber
MONTREAL - A Quebec restaurant is launching a class-action lawsuit against food delivery companies for the alleged exorbitant and abusive commissions they are charging during the pandemic.
Montreal restaurant Deli Boyz is the lead plaintiff in the case that is targeting food delivery companies that operate smartphone applications, including Uber Eats, DoorDash and SkipTheDishes.
The restaurant says the commissions these companies demand are in excess of 15 per cent, which the applicant says are abusive during a pandemic because restaurants are limited to takeout as indoor dining is banned.
The Quebec Superior Court filing - which needs to be authorized by a judge - seeks damages equal to the money paid to these companies in commissions charged above 15 per cent of customers' orders, since Jan. 8. It is also requesting a judge bar the defendants from charging a commission above 15 per cent of the total customer order.
“There can be no doubt that by maintaining these same high commissions during the pandemic and curfew period - when food delivery orders skyrocketed - that Uber Eats' commissions are abusive and that it acted contrary to the requirements of good faith,” the filing reads.
Deli Boyz says between Dec. 27, 2020 and Jan. 4, 2021, it paid Uber Eats $737 in commissions for 67 orders totalling about $2,550.
According to the filing, if the cap had been set at 15 per cent, the commissions would have totalled $368. “Consequently, an excessive disproportion exists when the defendants charge restaurants commissions in excess of 15 per cent,” the filing reads.
Lawyer Joey Zukran, who filed the lawsuit on behalf of Deli Boyz on Monday, said it could take up to one year for a judge to authorize the class action and even longer for the case to be heard on its merits.
Zukran said restaurants have little choice but to work with food delivery companies that use smartphone applications. “In order to stay competitive and relevant, they have no choice.”
Places such as New York, California, British Columbia and Ontario, however, have capped delivery commissions at 15 per cent of customers' orders. “So restaurants in Montreal have been saying, 'Why do I have to pay double what a similar restaurant in Toronto has to pay?”' Zukran said.
In a emailed statement, Uber spokesman Jonathan Hamel did not directly comment on the class action. “Uber Eats supports restaurants by driving demand with marketing campaigns, eliminating activation fees, instituting daily payments, and providing flexible options,” he said.
Last Saturday, Montreal Mayor Valerie Plante called on the Quebec government to temporarily cap delivery commissions to ensure profitability for restaurant owners.
Premier Francois Legault told reporters Monday he was open to looking at the issue of commissions, but appeared hesitant when asked about imposing a cap.
Deli Boyz's class action is in addition to two other lawsuits filed last month by a different law firm against Uber Eats and DoorDash over undisclosed service charges.