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Pizza Hut to lay off California workers after minimum wage increase
- bell-cot 3y agoFirst 2 sentences make the situation far more clear: > Pizza Hut is set to lay off more than 1,200 delivery drivers in Los Angeles, Orange and Riverside counties in the coming year, ahead of a new state law that boosts the fast-food minimum wage by $4 to $20 per hour. > Pizza Hut franchises are preparing to pivot toward third-party apps like DoorDash, GrubHub and UberEats for pizza and food deliveries. And if you know how "minimum wage" works for DoorDash, etc. drivers in CA...
- Guvante 3y agoPizza Hut has a $4.99 delivery fee in CA so either they are claiming they can't manage to sell four pizzas and hour or this isn't about the bill but about reduced demand.
- bell-cot 3y agoAh...Pizza Hut's bottom-line cost of employing a "$20/hour" delivery driver is a lot more than $20/hour. (Assuming they're employing him legally, vs. "cash under the table".) And maybe talk to somebody who's done delivery driving about being able to sustain a 4-delivery-per-hour average, through their whole shift, day after day.
- Guvante 3y agoYou don't delivery pizza for the delivery fee... You deliver pizza to sell more pizza. My point is the delivery is alone is almost covering your cost a lot of the time.
- ratg13 3y agoAt 4 pizzas an hour you haven’t covered taxes, benefits, or any business costs.
- Guvante 3y agoWhy do you exclude the value of the pizza delivered? It isn't like they only got $20 total...
- 99catmaster 3y agoHow does minimum wage for for DoorDash etc drivers in California?
- sschueller 3y agoAren't they gig workers so they are all "self employed" on a 1099 and the minium wage does not apply?
- k33n 3y ago[flagged]
- bdcravens 3y agoI suspect they're well aware that this could happen. A business that can't function with reasonably paid workers probably doesn't have much of a legitimate business plan to begin with. After all, razor-thin margins mean minimal income to pay taxes on, so they're of little value to the state and should be replaced by more profitable ventures.
- rahimnathwani 3y ago"After all, razor-thin margins mean minimal income to pay taxes on" Not really. In San Francisco, if you're selling burritos for $10+tax, the government gets $0.86 in sales tax for each burrito, even you make nothing or make a loss.
- gruez 3y ago>After all, razor-thin margins mean minimal income to pay taxes on, so they're of little value to the state and should be replaced by more profitable ventures. 1. Sales tax/gross receipt taxes are a thing in most jurisdictions 2. Low margins are a good thing. It means there's healthy competition driving prices (and thus profits) down. 3. Supermarkets are pretty low margin as well. Should we get rid of them and replace them with GPT wrapper startups?
- oh_sigh 3y agoI suspect what will happen is the laid off drivers will still be delivering pizzas for Pizza Hut, but will be paid by Doordash et al instead of Pizza Hut, and will ultimately have reduced compensation.
- rahimnathwani 3y agoPerhaps, or they might have the same compensation overall but less idle time, i.e. work harder for the same pay.
- brianwawok 3y agoHow do you work harder delivering pizzas? Break the speed limit?
- deleted 3y ago[deleted]
- frankhorrigan 3y agoYou deliver more pizzas.
- rudolph9 3y ago> less idle time
- rahimnathwani 3y agoAIUI California minimum wages: A) fast food employee: $20/hour B) other employee: $16/hour C) delivery gig worker: $19.20/hour plus $0.30/mile (but only for the time you're actively on a job) I guess they did the math and figured out that C is cheaper than A. If the demand for pizza delivery workers is spiky, perhaps it makes more sense to link the costs to the actual output (# deliveries).
- blahyawnblah 3y agoWhy do fast food workers get to make more than other employee types?
- rahimnathwani 3y agoAccording to this article, it's the result of union strategy: https://calmatters.org/economy/2023/12/minimum-wage-2024/ https://calmatters.org/economy/2023/12/minimum-wage-2024/ I don't know much about it.
- s1artibartfast 3y agoalso, you only pay a gig worker for the time they are delivering, not between orders or sitting around on slow days.
- qgin 3y agoThink of how many employees you could have if you didn't have to pay them at all.
- gruez 3y agoBut they won't be employees. They'll be contractors. Also, you still have to pay them, it's just that rather than paying them by the hour you're paying per delivery.
- qgin 3y agoWhether that's fair and livable is a separate issue to consider. If it's not fair and livable, it doesn't mean that setting a lower minimum wage is the answer.
- gruez 3y agoBarring them from working unless they can find a job that pays them a "living wage" isn't the answer either.
- Spivak 3y agoThen it's going to be an impasse, because offering human labor for a price that is less than the generally agreed upon lowest amount a person can live on defeats the entire point of establishing a living wage. Unskilled labor, especially individual laborers, have zero practical leverage. In the absence of government controls wages get driven to zero or unions form to claw back that leverage. So by all means abolish the minimum wage and living wage, I would love to see unions pick up even more steam.
- jiveturkey 3y agokeeping it specific to this article, pizza hut does NOT have to pay them. the consumers bears the cost directly. because of the way food is priced, this will likely be net zero or slightly more expensive for the consumer, but because of the way they perceive price it’s better than pizza hut simply raising prices. for the same reason that restaurants keep the price the same but in small print charge a mandatory fee of some kind for benefits of what have you.
- hamandcheese 3y agoWhy does fast food in particular have a higher minimum wage?
- dragonwriter 3y agoIts part of large package of additional protections and controls adopted as a means of addressing the way that the industry, specifically large fast food chains, have, particularly, via the franchise structure, systemically evaded and been unresponsive to preexisting accountability measures for labor and worker-safety rules (which particularly came to a head during the COVID-19 pandemic). The specific law is actually a government-industry-labor compromise passed this year that replaces the more expansive set that was initially adopted last year and challenged by the industry.
- antifa 3y agoI noticed that Steak-n-shake went serverless (lol). I wish more restaurants would do this. I abhor begging for refills and tipping for the pleasure of it. It's strange to see so many bottom-tier restaurants have wait-staff and have not already switched over to digital kiosks.
- hakfoo 3y agoI think it's still part of the experience. I'm going out to eat, likely spending on drinks and tips I wouldn't if I took it home, so I want someone to be bringing me the order while I sit.
- iguana_lawyer 3y agoThis has nothing with minimum wage which is increasing to $20 for everyone in Seattle on January 1st and isn’t triggering a wave of fast food layoffs. This is just typical corporate cost cutting.
- bl4kers 3y agoThe quality of Pizza Hut has been going downhill for years. Support your local pizza joint