Ontario to Limit Food Delivery App Fees Amid Covid Lockdown

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Canada’s most populous province is following New York City’s lead in restricting fees that companies such as Uber Technologies Inc. and DoorDash Inc. charge restaurants for delivery as coronavirus cases continue to rise.

Ontario will cap delivery fees at 15% -- similar to New York’s measures -- and limit overall fees to 20% in regions where indoor dining is prohibited, including Toronto. At present, those charges can be as high as 30%, according to the provincial government.

The province recorded 1,478 new cases of Covid-19 in the latest 24-hour period. Indoor dining is not permitted in Toronto and one of its suburbs since a return to lockdown in those areas last week.

“Ontario’s small and independent restaurants have shouldered an outsized share of Covid-19’s economic burdens,” Prabmeet Sarkaria, associate minister of small business, said in a statement. “With this legislation, our government is helping local businesses stay in business, and providing a solution that will help our local restaurants when every little bit helps.”

Food-delivery services that don’t comply with the law could be fined as much as C$10 million ($7.7 million), according to the statement.

“We recognize the challenges restaurants are facing while indoor dining is prohibited, and the difficult decisions local leaders must make to stop the spread of Covid-19,” a DoorDash spokesperson said in an email, adding that the company remains “focused on solutions that best serve restaurants, customers” and its users.

Uber Canada did not respond to a request for comment.

The move was welcomed by Restaurants Canada, a group representing thousands of food-service businesses, which said that provincial government consulted with the industry before proposing the rules.

“Third-party delivery services typically make more from a restaurant meal than the restaurant,” spokesperson Marlee Wasser said in an email. “This was a source of frustration for restaurants before the pandemic, but when they are restricted to takeout and delivery only these fees threaten the viability of their operations.”

©2020 Bloomberg L.P.

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