COVID-19 and restaurants: Ensemble Montréal wants the provincial government to cap delivery service fees
Montréal, January 12, 2021 – While it’s true that the present COVID-19 crisis affects every aspect of the Montréal economy, it's obvious that the restaurant sector is currently one of the worst hit.
The curfew imposed by new government measures on top of the existing lockdown will not make life better for Montréal restaurant owners. They’ve been forced to partner with third-party delivery platforms which charge them fees ranging up to 30% of the customer’s bill. Their financial peril is escalating as their profit margins melt before their eyes.
“We need to provide more help to restaurant owners; that’s why we’re asking the City of Montréal to pressure the Québec government to impose a 15% ceiling on the fees charged by delivery platforms, such as UberEats, DoorDash and Skip the Dishes, until the pandemic ends”, declared Mr. Lionel Perez, Leader of the Official Opposition and instigator of the motion.
Many restaurants that didn’t offer delivery before the pandemic have been forced to do business with one of the delivery industry’s major players in order to generate income now and avoid bankruptcy. However, this kind of service costs them a fortune.
“It’s completely unfair; restaurants have been taken hostage: we have no choice but to pay to survive the crisis”, declared Mr. Fabio Broccoli, Manager of the Fishbone and Elefanté restaurants in Old Montréal.
10,000 Canadian restaurants are believed to have closed permanently in 2020, and it’s also estimated that 75,000 jobs are presently on ice in the region’s restaurant and hotel sector, with tens of thousands of Montrealers awaiting a reopening to return to work.
“In this exceptional situation of the pandemic and now the curfew – where free market rules no longer apply – limiting the costs charged to restaurants would constitute prompt, direct action toward a straightforward solution. “We have to help them keep their heads above water if we want the Montréal we know and love to be there when the pandemic is over”, added Mr. Perez.
Cognizant of various proposals that have been circulating across Canada over the past few months, the Official Opposition is particularly inspired by the Ontario government’s recent adoption of similar measures in response to a request from the City of Toronto municipal council.
“We’re also asking for delivery companies to be prohibited from compensating for the loss of income caused by our measure by either reducing the salaries of their delivery people or increasing other administrative charges”, stated Mr. Aref Salem, Official Opposition spokesman for economic development.
Ensemble Montreal, which has maintained continuous contact with the food service industry since the start of the crisis, sees a clear consensus building around its motion, particularly following a call last week from Restauration Québec for the provincial government to limit delivery fees.
“If measures similar to those we’re proposing are already in place in Ontario, New York, San Francisco, Chicago and Los Angeles, then why not in Montréal?”, concluded Mr. Perez.
The motion will be debated at the next Municipal Council session on January 25, 2021.
Motion requesting that the gouvernement du Québec limit the fees charged to restaurants by delivery service companies
Whereas at this moment, due to the COVID-19 pandemic, Montreal is still a “red zone” as defined by the Government of Québec, thus requiring that dining rooms and bars remain closed;
Whereas in 2018, the accommodation and food services sector employed 75,000 people in the Montréal Urban Agglomeration and more than 80% of these jobs were related to restaurant and bar services;
Whereas, since March 2020, restaurant services is one of the sectors most affected by pandemic-related restrictions;
Whereas Restaurants Canada evaluates the number of restaurants permanently closed in 2020 at 10,000 and estimates that 40% of restaurants will probably not survive until March 2021;
Whereas Montreal is recognized for its gastronomic excellence and frequently ranks among the best in North America and even world-wide;
Whereas restaurants can currently only provide delivery and takeout orders;
Whereas, the gouvernement du Québec announced on January 6 that, due to the curfew, restaurants may take orders for delivery only after 8 p.m. between January 11 and February 8 2021;
Whereas a large number of restaurants did not offer delivery service before the pandemic and now use delivery services offered by third-party companies, particularly delivery apps or “platforms”;
Whereas these delivery companies charge service fees to restaurants of up to 30% of the sale price;
Whereas this business model disadvantages independent restaurants in particular, given that some major chains have the power to negotiate a reduction in these delivery service fees;
Whereas, according to the Journal de Montreal, using a delivery app for certain meals may raise the customer’s cost up to 60% without benefiting the restaurant;
Whereas a growing number of American cities, including New York, Chicago, San Francisco, Los Angeles and Washington, have limited the fees charged to restaurants by delivery services to a maximum of 15%;
Whereas the province of Ontario, in response to a City of Toronto municipal council motion, has temporarily limited delivery costs to 15% in areas where dining rooms are closed;
Whereas many Montreal restaurant owners and associations have already expressed a desire to see the Québec government limit these costs;
Whereas, according to various studies, the salary of a third-party delivery person is close to the minimum wage, and Ontario has prohibited these services from reducing commissions paid to these persons to compensate for the decrease in delivery fees;
It is proposed by Lionel Perez, City Councillor for the Darlington district;
Seconded by Aref Salem, City Councillor for the Norman-McLaren district;
That the City of Montréal ask the gouvernement du Québec to limit the fees charged to restaurateurs by third-party delivery services to 15% until the pandemic ends;
That in doing this, the gouvernement du Québec make sure that it prohibits delivery companies compensating for this loss of income by decreasing the remuneration of their delivery persons or other employees.