Quebec moves to temporarily cap fees charged to restaurants by food delivery apps

·2 min read
Companies like Uber Eats and other third party delivery apps charge a commission to restaurants which is a percentage of the cost of the customer's order. Quebec is now looking to cap that percentage while dining rooms remain closed in red zones. (Dirk Waem/Belga Mag/AFP via Getty Images - image credit)
Companies like Uber Eats and other third party delivery apps charge a commission to restaurants which is a percentage of the cost of the customer's order. Quebec is now looking to cap that percentage while dining rooms remain closed in red zones. (Dirk Waem/Belga Mag/AFP via Getty Images - image credit)

The Quebec government has responded to calls from restaurant owners who say food delivery apps like Uber Eats, DoorDash and SkiptheDishes are charging them unchecked fees.

On Thursday, Minister of Agriculture, Fisheries and Food André Lamontagne tabled legislation aimed at capping the amount third party delivery services can charge to restaurants, but only while dining rooms are ordered closed.

With dining rooms still closed in red zones, including the greater Montreal area, many restaurants are relying on apps to keep their businesses afloat.

On top of fees paid by users for delivery, the apps also charge a commission to restaurants for connecting them with clients and drivers.

Some companies are charging as much as 30 per cent for each order. The proposed law, called Bill 87, would cap those fees at a maximum of 20 per cent of an online order before taxes.

Lamontagne said when the issue was brought to his attention in January, he felt it was necessary to act to help restaurant owners.

"They've been hit very hard by the COVID and we thought we'd ... try to give them a break," he told CBC's Daybreak.

Quebec Agriculture, Fisheries and Food Minister André Lamontagne said he wanted to help out restaurant owners hit hard by the pandemic closures.
Quebec Agriculture, Fisheries and Food Minister André Lamontagne said he wanted to help out restaurant owners hit hard by the pandemic closures.(Jacques Boissinot/Canadian Press)

If the bill passes, companies who won't comply will be subject to fines of up $1.5 million, depending on the case.

However, once in-person dining service resumes, companies will once again be allowed to charge whatever commission they want.

The minister had asked the three largest companies offering these services — Uber Eats, DoorDash and SkipTheDishes — to voluntarily cap their fees. Only Canadian company SkipTheDishes, which already charged a 20 per cent fee, agreed.

Lamontagne said that these companies experienced huge growth during the pandemic and he doesn't expect that any of them will refuse to do business within the province as a result of this cap.

This proposed legislation comes after a Montreal restaurant filed a class-action lawsuit against food delivery companies in January.

Deli Boyz, a restaurant in Côte Saint-Luc, is the lead plaintiff in the suit seeking damages for alleged exorbitant and abusive commissions charged by third-party companies.

Emmanuel Darmond, co-owner of Deli Boyz, told CBC that a temporary cap while dining rooms are closed doesn't help in the long-term.

He said he'd rather see a permanent cap that helps restaurants hang on to more of their revenue.