Toronto council turns to Ontario government to reduce delivery app commissions

Click to play video: 'Toronto looks to provincial government to cap delivery app commissions' Toronto looks to provincial government to cap delivery app commissions
WATCH ABOVE: Councillor Michael Ford has a motion before Toronto city council requesting the provincial government to cap commissions on third-party delivery apps. The companies say they’re already doing their part to reduce rates, but restaurants say they need more to survive. Matthew Bingley reports. – Oct 27, 2020

A motion before Toronto city council is requesting the Ontario government use its legislative might to reduce the commissions restaurants are paying to third-party delivery apps.

Lawrence La Pienta, like many other restaurant owners and operators, said he has relied heavily on app-based services like Uber Eats and Skip the Dishes during the coronavirus pandemic. The owner of Elm St. Italian Deli and Cherry St. Bar-B-Que said it connected the business with customers after finding themselves suddenly cut off.

But La Pienta said it was never meant to be a long-term substitution for lost walk-ins, noting the commissions some of the apps take on each order are becoming harder to absorb.

Read more: Canadian restaurants say delivery app fees eating away at bottom line amid COVID-19

“You have had what you think is a fairly good week and you realize that, in some cases, 30 per cent of that is being removed off the top,” he told Global News.

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If commissions were cut in half, La Pienta said it would make a big difference.

“It would be the difference from just staying alive and being able to make a living,” he said.

Mayor John Tory said he has been working to lower the commission rates since April, including as recently as Monday. But he said what has been offered so far isn’t enough to help their customers stay in business.

“They seem to be relatively unyielding in saying that’s something they can’t or won’t do,” Tory said.

Toronto City Councillor Michael Ford has put forward a motion that would see the city ask the province to use its legislative might to cap third-party app commissions. Matthew Bingley/Global News

Also sensing the urgency from the restaurants in his ward, Coun. Michael Ford has a motion before city council requesting the provincial government to step in.

“They are the regulatory authority to put something in like this in,” he said.

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“I don’t think any of us want to put in regulations … but I think we are all prepared to do.”

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Ford’s uncle, Premier Doug Ford, also said he was hoping for more of a buy-in from third-party apps to prevent the need for legislation to cap commission fees.

“If (Toronto needs) our support, we’ll be there to support them,” said Premier Ford.

“But I always like asking the companies first, you know, step up.”

Uber Canada issued a statement to Global News, which said it has already begun allowing restaurants to choose what services it wants for reduced commission rates.

The statement said an establishment could choose to use Uber Eats for only its marketing services or only its delivery services for a commission of 15 per cent on each sale. But for both, it said it would charge up to 30 per cent. For pick-up orders, it has cancelled all commission fees until March 31.

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Read more: London, Ont., deputy mayor urges residents to skip delivery apps, order directly from restaurants

The company also said it and other third-party delivery services are operating at a negative margin, so whatever changes need to be sustainable for all parties.

Skip the Dishes said in a statement that it began offering a 25-per cent rebate on commission for local, independent restaurants on Oct. 10. It is also offering a 10-per-cent commission rate to restaurants for delivery services.

Other apps, like Ritual and DoorDash, have been widely lauded by Tory for reducing service fees and commission rates early on.

Council will vote on Coun. Ford’s motion on Wednesday. It is widely expected to pass with the support of Tory and a majority of councillors.

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