After Ontario Premier Doug Ford put food delivery apps on notice, it appears Toronto's city councillors will ask the province Wednesday to temporarily cap onerous service fees to assist the city's beleaguered restaurant sector.
Councillor Michael Ford told BNN Bloomberg in a phone interview that he plans to push a motion to request the Ontario government crack down on service fees applied by third-party food delivery businesses that have weighed down restaurants since the pandemic began.
“The vast majority of Toronto’s economy is made up of small businesses, including many restaurants. If they go under during these difficult times, our road to recovery will be that much more difficult,” said Ford, who is also the nephew of the Ontario Premier.
Toronto is one of four regions in Ontario where indoor dining has been suspended due to spiking coronavirus cases. Due to the pandemic, third-party food delivery services such as Uber Eats and Skip The Dishes account for 80 per cent of restaurants’ businesses. But Ford said the rates these services are charging is “outrageously high” and sometimes “upwards of 30 per cent.”
However, Toronto doesn’t have the legal authority to mandate a cap on delivery rates, but the province does. If Ford's motion passes Wednesday afternoon, Queen's Park will determine whether it will adopt the temporary regulation changes.
Restaurants Canada, the country's industry lobby group, estimates that without further support, nearly 40 per cent of independent restaurants may not survive beyond March 2021.
In a phone interview with BNN Bloomberg, Ford said he has already discussed the matter with the Premier and other provincial ministers who are “very open to the motion.”
Ford added he spoke with food delivery providers Monday night and found they vary on whether they would be open to changing their rates
“There are companies in the industry, I’m not going to name names, that have been willing to find a better commission path. Others don’t seem to be willing to find a middle ground and that’s disappointing,” he said.
Toronto has partnered with Toronto-based startup Ritual Technologies Inc. and DoorDash Inc. to offer free delivery from 1,000 businesses until Nov. 8 — the companies will waive fees to both businesses and consumers.
Uber charges the highest fees, often 30 per cent on top of a final food order.
A spokesperson for Uber Eats told BNN Bloomberg in an email that the company has waived activation fees for new restaurants and offers reduced rates for picking up food yourself or with another courier.
Although Ford’s motion does not include a specific cap rate, it cites jurisdictions in the U.S., including Los Angeles which mandated a 15 per cent ceiling for food delivery businesses. San Francisco, New York, Jersey City, Chicago, Seattle and Washington, D.C. have also moved to limit fees.
“In consultation with the industry, we’ve seen numbers south of the border in the range of 15 per cent, but our markets, economies, and regulations are different,” Ford said.
Ford said it will be up to the province to decide whether a cap would be region-specific and tailored to the size of the business.