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B.C. to put cap on fees that delivery companies charge restaurants

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B.C. is looking to permanently cap the fees that delivery companies can charge restaurants in the province.

During the pandemic, services like Uber Eats and SkipTheDishes became very popular. Those services got Virtuous Pie in downtown Victoria through tough times. Now, many of their customers continue to use the service.

"People are still only ordering delivery and not coming out to our restaurant," said Kelsey McInnes, general manager of Virtuous Pie.

Currently, fees charged to restaurants from those delivery services are capped at 20 per cent. That policy was set to expire on Dec. 31.

On Thursday, the province proposed legislation that would keep those fees at 20 per cent permanently.

"We’re also insuring that food delivery drivers are protected as part of this legislation by making sure compensation for drivers doesn’t decrease as a result of this legislation," said Ravi Kahlon, Minister of Jobs, Economic Recovery and Innovation, outside of Virtuous Pie on Thursday.

For the general manager of Virtuous Pie, this brings certainty to the business.

"Having a cap is really important," said McInnes. "It means we can keep our prices where they are for our customers."

BREAKING DOWN DELIVERY FEES

This is how the fees work.

If a business was to sell $100 worth of takeout, $20 would go to the delivery companies.

Menu prices at many restaurants have been built to reflect our new takeout habits. If delivery fees were to increase post-Dec. 31, menu prices could possibly climb as well.

(CTV News)

"Really, it’s a good thing," said Ian Tostenson, president and CEO of the British Columbia Restaurant and Food Services Association.

"It could have gone the other way where there is no cap and they could have flowed-up to 25 to 30 per cent, and that would be tough on us," he said.

Tostenson calls the proposed legislation a win for all parties.

Twenty per cent will give a restaurant basic services on food delivery apps. That includes being on the app, and the order being picked-up and delivered.

"So that keeps the economic side of the delivery whole," said Tostenson.

With this proposed legislation, restaurants will continue to be able to choose to spend a bit more, giving them a more prominent spot on the app.

"Some restaurants do that because they find that the third-party delivery company has become like a marketing department for them," said Tostenson. "They don’t mind paying a few extra percentages to do it."

It's an option Virtuous Pie has taken advantage of in the past.

"We’ve always seen great returns on that, even if it means just being visible to one more new customer," said McInnes. "That’s a great investment in our opinion."

It’s another way restaurants are attempting to get a piece of the post-pandemic pie. 

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