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Ford government caps fees for food delivery companies during COVID-19

Last Updated Dec 19, 2020 at 8:29 pm EST

The Ford government has moved to cap the fees charged by food delivery companies.

Starting today, companies such as Uber Eats, DoorDash and SkipTheDishes will be limited to charging 20 per cent for each transaction with no more than 15 per cent commission for food delivery services.

Some delivery apps charge restaurants upwards of 30 per cent for delivery service.

“The cap applies in areas where indoor dining is prohibited, to help restaurants stay in business and continue contributing to their communities. If indoor dining is prohibited in new regions, the cap will also apply in those locations,” read a statement released by the government.

The caps will apply to the largest food delivery companies in the province that serve 500 or more restaurants.

Delivery companies who do not comply with the new rules could face fines of up to $10 million.

Ontario joins several New York, Los Angeles and San Francisco in capping fees for third-party delivery apps at 15 per cent.

The Canadian Union of Postal Workers expressed concerns last month when the legislation was first introduced that app-based delivery workers would bear the brunt of any changes to their delivery fee structure.

“We’re worried that the employers will pass the cost onto the workers, who have little to no transparency about their pay rates as it is,” said Jan Simpson, CUPW National President.

There is a mechanism available within the Ontario legislation to allow restaurants or employees of food delivery apps to file an online complaint if they are charged fees that exceed the cap or if their compensation or payments are reduced.

“Workers often have no idea how their pay is calculated and rates can vary wildly from hour to hour,” Brice Sopher, a courier in Toronto, said last month when the initial legislation was proposed. “Expecting gig workers to conclusively prove they’ve had their pay cut through some nebulous complaints process essentially allows companies like Doordash, SkipTheDishes and Uber Eats to slash pay for couriers with very little risk of any repercussions.”