Restaurants across Ontario—and Canada at large—have faced significant challenges in recent years, including the rising cost of ingredients, staffing shortages, and the lingering economic impacts of the pandemic. Adding to these pressures is the ongoing debate around third-party delivery apps and their commission fees, which can range from 15% to 30% per order. Many restaurant owners argue these fees are eroding already thin margins, forcing them to choose between hiking prices or sacrificing profitability.

Below is an in-depth look at how these commission fees are impacting restaurants in Ontario and why the issue has become such a flashpoint.

The Need for Delivery and Online Ordering

For many Ontario-based restaurants, especially during lockdowns and capacity restrictions, third-party delivery platforms like Uber Eats and SkipTheDishes were a lifeline. They offered:

1. Expanded Reach: By listing themselves on popular apps, restaurants could tap into broader customer bases, including those who might not have discovered them otherwise.

2. Convenience: Offering delivery became a near-essential service, catering to customers who prefer online ordering and contactless drop-offs.

However, while these apps connect restaurants with new customers, they also come at a cost—commission fees, which have sparked heated debates among business owners, customers, and policymakers alike.

Commission Fees and the Profit Squeeze

A typical restaurant operates on narrow margins, often between 3% and 5%. When a delivery platform charges anywhere from 15% to 30% per order, it can consume a significant chunk of the profits. For example, a CAD $40 order with a 20% commission fee is a CAD $8 cost to the restaurant. Over multiple orders per day, these fees can substantially cut into a restaurant’s bottom line.

Ontario restaurant owners have voiced concerns that they’re caught in a bind:

• Raise Menu Prices: Passing the fees on to customers could dissuade price-sensitive diners, or lead to negative reviews if they feel overcharged.

• Absorb the Costs: Attempting to cover the fees themselves can make it nearly impossible to maintain a sustainable profit margin, especially when combined with other rising expenses.

• Opt Out of Delivery Platforms: Although this can preserve margins, it risks losing the convenience-driven clientele that has become accustomed to online ordering and quick delivery.

Government Intervention & Ongoing Debates

In response to restaurant advocacy, certain regions in Canada have enacted temporary caps on delivery commissions during lockdown periods. For instance, Ontario introduced a 15% cap on commission fees for restaurants at the height of the pandemic to help them stay afloat. However, with most pandemic restrictions easing, restaurant owners are concerned that as these caps expire, the fees will rise again.

Industry groups like Restaurants Canada have called for more comprehensive legislation to manage these fees. They argue that a more regulated environment would foster fair competition and promote healthier, long-term relationships between restaurants and delivery services. Meanwhile, delivery platforms maintain that higher commission fees are necessary to cover marketing, technology, and operational costs.

The Path Forward for Ontario Restaurants

As debates continue, some Ontario restaurateurs are exploring alternative solutions:

1. Return to In-Person Focus:
   With pandemic restrictions eased, many restaurants are emphasizing on-site experiences to drive foot traffic—by hosting special events, local collaborations, and unique in-house promotions. Additionally, community-oriented platforms like Host help businesses connect with nearby customers looking for memorable local dining, reducing reliance on third-party delivery services.

2. Partnerships & Community Apps:
   In certain communities, local business associations have launched cooperative delivery or ordering services that charge lower fees (e.g., Toronto’s Ritual). By banding together, independent restaurants can strengthen their voices, share resources, and negotiate better rates.

3. Transparent Pricing:
   Some owners explicitly show any added “delivery fee” on receipts, so customers understand where their money is going. This transparency can help maintain trust and demonstrate the financial pressures restaurants face.

While there isn’t a one-size-fits-all answer, restaurants that strike a balance between profitability and convenience will likely have an edge in the long run.

Conclusion

The debate on commission fees for restaurant delivery is far from settled in Ontario. From temporary caps on fees to the search for low-fee alternatives, entrepreneurs and policymakers are still navigating how best to structure this vital service. As the industry continues to evolve, transparency, innovation, and supportive regulations will be key to ensuring restaurants can serve their communities—both physically and digitally—without sacrificing their hard-earned profits.