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California Pizza Huts lay off all delivery drivers ahead of minimum wage increas

60 points by MoBarouma 3y ago

fithisux 3y ago
Cook at home.
zzappper 3y ago
this will be bad for stores doing this, uber eats and door dash choose what they want to take and I have seen many times in my second jobs Sitting job pizzas ordered through those services sit on a shelf for up to and even longer than hour to be picked up. Plus you pay a ridiculous amount of fees to have something delivered through those services.
superduty 3y ago
[flagged]
crooked-v 3y ago
I find it wild that they'd rather just hand all that money over to Grubhub.
- altairprime 3y ago
  “Move fast and externalize costs” is the private equity slogan, and it’s very applicable here. Deliveries are a competitive feature, not a core market focus. Replacing benefits-laden delivery employees with a temp agency that can just invoice for deliveries is a dream come true for a megacorp. Are temp workers for DoorDash et al. paid the new fast food minimum wage when performing contract work for fast food businesses in California?
  - csa 3y ago
    > Are temp workers for DoorDash et al. paid the new fast food minimum wage when performing contract work for fast food businesses in California? Yes and no, if my understanding of the current CA gig economy is correct. They will be guaranteed $20 an hour (edit: plus a 20% premium?) while picking up and delivering, but earn nothing while waiting to receive an order to work on. This may seem bad on the surface, but many delivery folks I have spoken to value the flexibility of not having to be on someone else’s schedule.
    - altairprime 3y ago
      $20/hour regardless of whether it’s Best Buy or McDonalds, though?
      - csa 3y ago
        Good question. Definitely not Best Buy. There is only an increase for fast food workers and certain health care workers. Not sure whether food delivery gig work will fall under “fast food”. Probably not. Note that I think most of the CA people make 19+ an hour for “pick up and delivery” already. $16 an hour plus $3.20 for the gig bump plus mileage (and tax write offs).
        altairprime 3y ago
        So, then, if California’s new law fails to pierce the subcontracting veil, then this arbitrage loophole is valid: Pizza Whatever Corp outsources delivery for $X less per hour than a fast food worker would cost, either pocketing the difference in wages rather than paying it to workers as the state intended, and/or undercutting the prices of any competitors still using delivery employees. I imagine there would be interesting outcomes from filing unpaid wages claims with the California m labor department against Doordash and other temp agencies for the difference between hourly wages paid and fast food worker hourly wages owed, when performing delivery services for fast food businesses that are in-scope for the law.
- Trumpi 3y ago
  My understanding is that they aren't handing over any money... we are.
- wlesieutre 3y ago
  You’re also allowed to order takeout and pick it up yourself if you don’t want to pay Grubhub prices
  - Larrikin 3y ago
    Delivery used to be free, especially at chain pizza places
    - SV_BubbleTime 3y ago
      It was never free, it was subsidized by pick up or eat in. Now that prices are high and margins are tightened (blame practical downstream or “greedy corporations” or just MBAs, I don’t care) that subsidy isn’t bearable. So you pay for delivery.
      - JoyfulTurkey 3y ago
        I think “free” in the sense that it was the same price whether you picked it up or had the place deliver. You only had to tip the driver. This was for delivery only places like Dominos/local chains near me. The couple of dollars extra for delivery fees started maybe in the mid/late 2000s where I am (midwest USA).
      - s1artibartfast 3y ago
        >It was never free, it was subsidized by pick up or eat in. Or not. Sometimes extra costs simply come out of the bottom line because it is better to make a delivery sale with lower margin, than lose the sale entirely. The idea that it must be subsidized only makes sense if every pizza place has no profit.
- noduerme 3y ago
  I imagine that the premium they pay Grubhub is going to be a lot less than employing full time drivers. And Grubhub drivers live on tips and don't make minimum wage,right? So this will end up being cheaper for consumers than a 25% increase in delivery cost.
- Larrikin 3y ago
  Big chain delivery serviced through the delivery apps is the worst of all worlds. Various services, credit cards, and banks will get you "premium" membership for free at this point, but the store front on Door dash.com is locked down corporate shit that barely allows substitutions, no notes, and no coupons. Ordering on the restaurants actual website will get you the coupons, the member points, the specials, but then they hide the fact it's delivered by a delivery app until the very last step, which charges the full fee of the delivery app plus a little more to make up for what the company is paying for the service. You end being able to get what you actually want but still pay more. Then you get a driver sitting around so they can make multiple deliveries while your food gets cold. And they still want a tip. And Door dash couldn't make a profit when we were all locked inside of our houses and restaurants could only make deliveries. It will be nice when people realize how shitty the deal has become and these delivery service companies finally crash and we go back to restaurants needing their own drivers
  - solardev 3y ago
    I dunno, it's really nice being able to get food other than pizza delivered. Most restaurants can't afford to do that on their own.
- cowsup 3y ago
  Grubhub takes between 5%-20% [0]. So for a $30 meal from pizza hut, assuming they're charged the full 20% (not likely), that's $6. Four deliveries in an hour would be $24 lost. Compare that to paying someone $20 an hour, with no guarantee that that single employee will do four deliveries each hour. If it's a typical day, you may send them out to 20 or fewer deliveries in an eight hour shift, and they get $160 for that shift. Compared to Grubhub, which charges a flat $120 for those 20 deliveries. Not to mention the benefit of not worrying about them calling out sick, training, payroll taxes, etc. And, again, Pizza Hut is likely able to negotiate something better than that 20%. https://get.grubhub.com/faq/what-fees-does-grubhub-charge-restaurants/ https://get.grubhub.com/faq/what-fees-does-grubhub-charge-re...
throwup238 3y ago
> The layoffs come as fast-food workers in California are set to get a pay bump of close to 30% in April as the minimum wages rises from $16 to $20 an hour. It's not "close to 30%," it is "exactly 25%." Whoever wrote that needs to be sent back to middle school remedial math. As if I needed another reason to not eat at pizza hut. This sounds like a cynical ploy to get sub-minimum wage gig economy delivery drivers via third party services that they can then blame when the plan goes pear shaped.
- voidfunc 3y ago
  Reporting is dead. They probably reached out to Pizza Hut PR department for the exact figure and went with what corporate told them. The PR department wants to make the increase looks as unreasonable as possible so gave them the 30% line. The reporter then writes that in the article. Close to 30% is technically true, but it sounds like a bigger hike to the reader.
  - karaterobot 3y ago
    To be fair (?) I think reporting is not as much the problem as the death of editorial and fact-checking departments. This is the kind of mistake that ought to be caught by a process. It's sort of like saying programmers are getting worse because so many bugs get into code, and then finding out that, actually, all the unit tests and CI processes were turned off because they were expensive; the programmers may be worse, but in the end they aren't really the biggest problem.
  - deleted 3y ago
    [deleted]
- kube-system 3y ago
  I guess that is probably what that sentence intends to mean, but it also presumes that all fast food workers are making minimum wage. On first reading, I would have presumed that they were talking about two different statistics -- the change in minimum wage and the change in average gross wage, but given the context I presume that is probably not the case.
- 3y ago
toomuchtodo 3y ago
Related: Pizza Hut to lay off California workers after minimum wage increase - https://news.ycombinator.com/item?id=38784345 https://news.ycombinator.com/item?id=38784345 - Dec 27th, 2023 (12 comments) California Pizza Hut Lays Off Delivery Drivers Amid New Wage Law - https://news.ycombinator.com/item?id=38778657 https://news.ycombinator.com/item?id=38778657 - Dec 26th, 2023 (79 comments) [flagged] California Pizza Hut operators laying off all delivery drivers - https://news.ycombinator.com/item?id=38775754 https://news.ycombinator.com/item?id=38775754 - Dec 26th, 2023 (47 comments)
jpalawaga 3y ago
This feels a little short-sighted. Just this year, New York City implemented new minimum payment schedules for "self employed" app delivery drivers, which brings their minimum hourly payment to nearly $30/hr. I will strongly suspect that the big centres in california will do likewise, or potentially the state as whole.
- tekla 3y ago
  Yeah, stopped using delivery for that reason. It got hilariously too expensive.
  - jpalawaga 3y ago
    the pay bump i'm talking about is very recent, but yes, I agree, delivery became too expensive. And it's no wonder. Restaurants delivering have very low overhead. A phone line and a delivery driver. When you're on grubhub/doordash/etc, now somebody has to pay for a mountain of software engineers, marketing expenses, servers, customer service people, executive comp, etc. It inserted an expensive middleman where there was none. alas, it's probably still a better option than each restaurant trying to build their own website/app. But not better than picking up food or calling the restaurant for delivery.
    - mytailorisrich 3y ago
      The issue of pay for delivery drivers is that the job is very low productivity (cannot make that many deliveries per hour and consumers are not willing to pay much for delivery). I think in general it works for pizzas because pizzas have very high margins so that some or all delivery costs can be bundled in the retail price of the pizza.
    - anon291 3y ago
      Doordash provides the service of matching delivery drivers (which most restaurants cannot justify having, since delivery is not a big portion) with orders. If each restaurant had their own fleet there would be a lot of inefficiency. Doordash can (theoretically... don't know how they actually work) schedule several routes with several orders on them simultaneously, thus reducing cost. I'm not sure how many SW engineers they would need. My SW engineering experience says they'd need a few dozen of very competent, well compensated engineers. My engineering management experience tells me they probably have hundreds of underpaid, overworked, barely competent new graduates that cost a lot of money in aggregate.
karaterobot 3y ago
> Customers must use third-party apps like DoorDash, GrubHub and Uber Eats for food deliveries at the affected chain restaurants. I don't order delivery very often, so I was surprised when the last time I did it, the pizza place that advertised delivery just silently passed the order on to Doordash, with all the downsides of that process (data sharing, increased price, decreased pay for the driver, and generally worse service). Maybe this is just how most places do it now, but I was surprised. I understand that Doordash gives workers the option of being paid minimum wage, but they get money only when the worker is actively making a delivery, so almost by definition that means less than minimum wage in practice. I'm not sure what the fairest strategy would be, because it's not like there are defined shifts for gig workers, but it feels like they could find a better policy than this.
- CharlesW 3y ago
  > I understand that Doordash gives workers the option of being paid minimum wage… Is it even an option in California? "Guaranteed minimum earnings: When you dash in California you earn at least 120% of minimum wage (based on the local minimum wage at the pick-up location) for active time on the platform (time spent on a delivery, starting from when you accept an offer to when you complete it), plus $0.34 per mile during active time, when driving a motor vehicle (for example, a car, motorcycle, motor scooter)." https://help.doordash.com/dashers/s/california-dashers https://help.doordash.com/dashers/s/california-dashers https://driver-support.grubhub.com/hc/en-us/articles/360053871292-How-does-Prop-22-affect-how-I-m-paid- https://driver-support.grubhub.com/hc/en-us/articles/3600538... > …but they get money only when the worker is actively making a delivery… "Active time" is acceptance to delivery, including wait time.
  - karaterobot 3y ago
    It is elsewhere; maybe not in California. There appears to be two payment modes, base pay and earn by time, and the driver can choose which they want to operate under.
- whatamidoingyo 3y ago
  This happened to me as well. To my surprise, the DoorDash driver didn't actually deliver the pizza, they just grabbed it and went home, I guess. Quite funny. I got a refund.
_jal 3y ago
I guess we're down to music, movies and microcode.
doctornoble 3y ago
Perhaps Yum Brands has the data to back this up, but it seems quite a silly response that feels more political/ideological than based on sound economics. BIL was COO of a pizza chain. The cost for a large pizza was around $1.50 - even for pricey toppings and gluten free bread. Labor is cheap at ~60 seconds per pie. Biggest costs was rent. A $5 raise could be absorbed across and then some with a 10¢ increase in price or adding an extra $1 delivery fee. Strategically this makes little sense. A key factor of chain pizza’s business model is convenience & cost rather than quality. When faced with the inconvenience of not having delivery available or the extra cost associated with third party delivery services I wonder how many people will just opt for Dominos, Papa Johns or something else?
- toomuchtodo 3y ago
  If rent is the predominate cost, why do pizza delivery only ghost kitchens not take off? Doesn’t matter where it’s made, just where the customer is. You could make them in a shipping container dropped in a big box parking lot with a roll up door for delivery drivers to load their trunk, like Spirit Halloween for pizza. What am I missing? You don't need a robot pizza machine, you need an operating model where rent doesn't hold your bottom line hostage (based on my very limited understanding of the business fundamentals). Rent goes up? Class 8 Semi pulls up to pull the trailer to somewhere else with hookups. Edit: thanks for the learnings y’all!
  - jimbob45 3y ago
    That's what Chuck E Cheese should be doing. They've got the playground/arcade business to be able to subsidize their pizza business to out-compete every other pizza chain out there. Instead, they're cutting costs on both fronts to have...two bad businesses.
    - deleted 3y ago
      [deleted]
    - sparcpile 3y ago
      Chuck E Cheese runs a virtual brand for their pizza called Pasqually's Pizza https://www.youtube.com/watch?v=7OTpHqq6bFg https://www.youtube.com/watch?v=7OTpHqq6bFg # Comparing Chuck E Cheese pizza and a rebranded CEC frozen pizza https://www.lastsqueaktonight.com/ https://www.lastsqueaktonight.com/ # Last Week Tonight's alternative episode when they discussed HOAs. it's a full and funny history of the pizza chain and includes the virtual brand
natas 3y ago
What surprises me is that all states with high minimum wage (CA, WA, OR, etc.) are the ones with the most homelessness; while all others do not have homelessness, drugs, and other sort of problems; or at least, not to the magnitude of high-wages states. Probably because low-wage jobs are necessary for the lower class to find jobs.
- CamperBob2 3y ago
  So, it's not surprising after all, it sounds like. Pretending that every job is worth $20/hour apparently has "unforeseen consequences"... the kind that the legislators and voters were warned about repeatedly.
  - JumpCrisscross 3y ago
    Every [1] study [2] on minimum wages [3] using empirical data showed de minimis to positive effects on employment. There is absolutely a wage where employment is curtailed. But there is no evidence anyone in America has hit it. Much more corrosive to hiring is the amount of paperwork involved. [1] https://davidcard.berkeley.edu/papers/njmin-aer.pdf https://davidcard.berkeley.edu/papers/njmin-aer.pdf [2] https://irle.berkeley.edu/publications/working-papers/minimum-wage-effects-in-low-wage-areas/ https://irle.berkeley.edu/publications/working-papers/minimu... [3] https://www.journals.uchicago.edu/doi/abs/10.1086/685449 https://www.journals.uchicago.edu/doi/abs/10.1086/685449
    - CamperBob2 3y ago
      And yet there are a lot of unemployed people hanging around in the areas in question. If correlation==causation is sauce for the goose, it's good for ganders, too. Paperwork? Really?
      - JumpCrisscross 3y ago
        > yet there are a lot of unemployed people hanging around in the areas in question It’s almost like there are other variables involved. And again, you’re comparing highly-productive regions to ones that require federal subsidies to stay afloat.
caycep 3y ago
Pizza Hut here seems to be on its last legs too...the last time I saw one was at some rest stop on a trip to Arizona...
- CharlesW 3y ago
  It's definitely dying in SoCal, apparently the result of private equity firms having purchased most franchisees.
- downrightmike 3y ago
  I stopped eating it years ago because they changed something that always made me sick
SV_BubbleTime 3y ago
The thing that won’t happen, happened. Time will tell who is right.
zoklet-enjoyer 3y ago
I'm surprised that drivers in California aren't already making that much. I don't know what delivery drivers make where I'm at, but I see signs for store clerks paying $18-$20
Racing0461 3y ago
All the pizza huts by me have switched to carry out/delivery only and now they are removing delivery. Pizza hut is a shell of what it once was.
- downrightmike 3y ago
  They actually were just dine in carry out until the 80's when Dominos was making serious money delivering, so every other pizza chain started to deliver too.
zzzeek 3y ago
perhaps Pizza Hut has a product that is total garbage that nobody wants anymore anyway?
- ahallock 3y ago
  I'm not sure how people eat there anymore, even as a guilty pleasure. The ingredients got worse (cheaper ingredients, no whole milk mozz) and the dough, from what I understand, is shipped frozen, not made in store. Even in the 90s their pizza sent me running to the bathroom it had so much oil in it.
  - zzzeek 3y ago
    even in the 90's "Pizza Hut" made Dominoes look like Arturo's on Houston Street. This is like a non-food product created in the most cynical way as some kind of corporate feed trough for extremely nutritionally impoverished people.
- SV_BubbleTime 3y ago
  This is basically my problem with the Bud Light boycott. There was a time when it was popular for its cheap and consistent qualities. But now there are so many options, and so many customizations and flavor with relative cost that it’s clear the brand was going to die anyway. That doesn’t excuse their piss poor messaging that was the real grievance most former drinkers had. Insulting and attacking your primary customers defensive someone who is never going to be your customer is just not a good move. But as the effectiveness, it was a prime situation, not necessarily the world’s most effective boycott.

60 points by MoBarouma 3y ago

Cook at home.

this will be bad for stores doing this, uber eats and door dash choose what they want to take and I have seen many times in my second jobs Sitting job pizzas ordered through those services sit on a shelf for up to and even longer than hour to be picked up. Plus you pay a ridiculous amount of fees to have something delivered through those services.

superduty 3y ago

[flagged]

crooked-v 3y ago

I find it wild that they'd rather just hand all that money over to Grubhub.

altairprime 3y ago
“Move fast and externalize costs” is the private equity slogan, and it’s very applicable here. Deliveries are a competitive feature, not a core market focus. Replacing benefits-laden delivery employees with a temp agency that can just invoice for deliveries is a dream come true for a megacorp. Are temp workers for DoorDash et al. paid the new fast food minimum wage when performing contract work for fast food businesses in California?
- csa 3y ago
  > Are temp workers for DoorDash et al. paid the new fast food minimum wage when performing contract work for fast food businesses in California? Yes and no, if my understanding of the current CA gig economy is correct. They will be guaranteed $20 an hour (edit: plus a 20% premium?) while picking up and delivering, but earn nothing while waiting to receive an order to work on. This may seem bad on the surface, but many delivery folks I have spoken to value the flexibility of not having to be on someone else’s schedule.
  - altairprime 3y ago
    $20/hour regardless of whether it’s Best Buy or McDonalds, though?
    - csa 3y ago
      Good question. Definitely not Best Buy. There is only an increase for fast food workers and certain health care workers. Not sure whether food delivery gig work will fall under “fast food”. Probably not. Note that I think most of the CA people make 19+ an hour for “pick up and delivery” already. $16 an hour plus $3.20 for the gig bump plus mileage (and tax write offs).
      - altairprime 3y ago
        So, then, if California’s new law fails to pierce the subcontracting veil, then this arbitrage loophole is valid: Pizza Whatever Corp outsources delivery for $X less per hour than a fast food worker would cost, either pocketing the difference in wages rather than paying it to workers as the state intended, and/or undercutting the prices of any competitors still using delivery employees. I imagine there would be interesting outcomes from filing unpaid wages claims with the California m labor department against Doordash and other temp agencies for the difference between hourly wages paid and fast food worker hourly wages owed, when performing delivery services for fast food businesses that are in-scope for the law.
Trumpi 3y ago
My understanding is that they aren't handing over any money... we are.
wlesieutre 3y ago
You’re also allowed to order takeout and pick it up yourself if you don’t want to pay Grubhub prices
- Larrikin 3y ago
  Delivery used to be free, especially at chain pizza places
  - SV_BubbleTime 3y ago
    It was never free, it was subsidized by pick up or eat in. Now that prices are high and margins are tightened (blame practical downstream or “greedy corporations” or just MBAs, I don’t care) that subsidy isn’t bearable. So you pay for delivery.
    - JoyfulTurkey 3y ago
      I think “free” in the sense that it was the same price whether you picked it up or had the place deliver. You only had to tip the driver. This was for delivery only places like Dominos/local chains near me. The couple of dollars extra for delivery fees started maybe in the mid/late 2000s where I am (midwest USA).
    - s1artibartfast 3y ago
      >It was never free, it was subsidized by pick up or eat in. Or not. Sometimes extra costs simply come out of the bottom line because it is better to make a delivery sale with lower margin, than lose the sale entirely. The idea that it must be subsidized only makes sense if every pizza place has no profit.
noduerme 3y ago
I imagine that the premium they pay Grubhub is going to be a lot less than employing full time drivers. And Grubhub drivers live on tips and don't make minimum wage,right? So this will end up being cheaper for consumers than a 25% increase in delivery cost.
Larrikin 3y ago
Big chain delivery serviced through the delivery apps is the worst of all worlds. Various services, credit cards, and banks will get you "premium" membership for free at this point, but the store front on Door dash.com is locked down corporate shit that barely allows substitutions, no notes, and no coupons. Ordering on the restaurants actual website will get you the coupons, the member points, the specials, but then they hide the fact it's delivered by a delivery app until the very last step, which charges the full fee of the delivery app plus a little more to make up for what the company is paying for the service. You end being able to get what you actually want but still pay more. Then you get a driver sitting around so they can make multiple deliveries while your food gets cold. And they still want a tip. And Door dash couldn't make a profit when we were all locked inside of our houses and restaurants could only make deliveries. It will be nice when people realize how shitty the deal has become and these delivery service companies finally crash and we go back to restaurants needing their own drivers
- solardev 3y ago
  I dunno, it's really nice being able to get food other than pizza delivered. Most restaurants can't afford to do that on their own.
cowsup 3y ago
Grubhub takes between 5%-20% [0]. So for a $30 meal from pizza hut, assuming they're charged the full 20% (not likely), that's $6. Four deliveries in an hour would be $24 lost. Compare that to paying someone $20 an hour, with no guarantee that that single employee will do four deliveries each hour. If it's a typical day, you may send them out to 20 or fewer deliveries in an eight hour shift, and they get $160 for that shift. Compared to Grubhub, which charges a flat $120 for those 20 deliveries. Not to mention the benefit of not worrying about them calling out sick, training, payroll taxes, etc. And, again, Pizza Hut is likely able to negotiate something better than that 20%. https://get.grubhub.com/faq/what-fees-does-grubhub-charge-restaurants/ https://get.grubhub.com/faq/what-fees-does-grubhub-charge-re...

throwup238 3y ago

> The layoffs come as fast-food workers in California are set to get a pay bump of close to 30% in April as the minimum wages rises from $16 to $20 an hour. It's not "close to 30%," it is "exactly 25%." Whoever wrote that needs to be sent back to middle school remedial math. As if I needed another reason to not eat at pizza hut. This sounds like a cynical ploy to get sub-minimum wage gig economy delivery drivers via third party services that they can then blame when the plan goes pear shaped.

voidfunc 3y ago
Reporting is dead. They probably reached out to Pizza Hut PR department for the exact figure and went with what corporate told them. The PR department wants to make the increase looks as unreasonable as possible so gave them the 30% line. The reporter then writes that in the article. Close to 30% is technically true, but it sounds like a bigger hike to the reader.
- karaterobot 3y ago
  To be fair (?) I think reporting is not as much the problem as the death of editorial and fact-checking departments. This is the kind of mistake that ought to be caught by a process. It's sort of like saying programmers are getting worse because so many bugs get into code, and then finding out that, actually, all the unit tests and CI processes were turned off because they were expensive; the programmers may be worse, but in the end they aren't really the biggest problem.
- deleted 3y ago
  [deleted]
kube-system 3y ago
I guess that is probably what that sentence intends to mean, but it also presumes that all fast food workers are making minimum wage. On first reading, I would have presumed that they were talking about two different statistics -- the change in minimum wage and the change in average gross wage, but given the context I presume that is probably not the case.
3y ago

toomuchtodo 3y ago

Related: Pizza Hut to lay off California workers after minimum wage increase - https://news.ycombinator.com/item?id=38784345 https://news.ycombinator.com/item?id=38784345 - Dec 27th, 2023 (12 comments) California Pizza Hut Lays Off Delivery Drivers Amid New Wage Law - https://news.ycombinator.com/item?id=38778657 https://news.ycombinator.com/item?id=38778657 - Dec 26th, 2023 (79 comments) [flagged] California Pizza Hut operators laying off all delivery drivers - https://news.ycombinator.com/item?id=38775754 https://news.ycombinator.com/item?id=38775754 - Dec 26th, 2023 (47 comments)

jpalawaga 3y ago

This feels a little short-sighted. Just this year, New York City implemented new minimum payment schedules for "self employed" app delivery drivers, which brings their minimum hourly payment to nearly $30/hr. I will strongly suspect that the big centres in california will do likewise, or potentially the state as whole.

tekla 3y ago
Yeah, stopped using delivery for that reason. It got hilariously too expensive.
- jpalawaga 3y ago
  the pay bump i'm talking about is very recent, but yes, I agree, delivery became too expensive. And it's no wonder. Restaurants delivering have very low overhead. A phone line and a delivery driver. When you're on grubhub/doordash/etc, now somebody has to pay for a mountain of software engineers, marketing expenses, servers, customer service people, executive comp, etc. It inserted an expensive middleman where there was none. alas, it's probably still a better option than each restaurant trying to build their own website/app. But not better than picking up food or calling the restaurant for delivery.
  - mytailorisrich 3y ago
    The issue of pay for delivery drivers is that the job is very low productivity (cannot make that many deliveries per hour and consumers are not willing to pay much for delivery). I think in general it works for pizzas because pizzas have very high margins so that some or all delivery costs can be bundled in the retail price of the pizza.
  - anon291 3y ago
    Doordash provides the service of matching delivery drivers (which most restaurants cannot justify having, since delivery is not a big portion) with orders. If each restaurant had their own fleet there would be a lot of inefficiency. Doordash can (theoretically... don't know how they actually work) schedule several routes with several orders on them simultaneously, thus reducing cost. I'm not sure how many SW engineers they would need. My SW engineering experience says they'd need a few dozen of very competent, well compensated engineers. My engineering management experience tells me they probably have hundreds of underpaid, overworked, barely competent new graduates that cost a lot of money in aggregate.

karaterobot 3y ago

> Customers must use third-party apps like DoorDash, GrubHub and Uber Eats for food deliveries at the affected chain restaurants. I don't order delivery very often, so I was surprised when the last time I did it, the pizza place that advertised delivery just silently passed the order on to Doordash, with all the downsides of that process (data sharing, increased price, decreased pay for the driver, and generally worse service). Maybe this is just how most places do it now, but I was surprised. I understand that Doordash gives workers the option of being paid minimum wage, but they get money only when the worker is actively making a delivery, so almost by definition that means less than minimum wage in practice. I'm not sure what the fairest strategy would be, because it's not like there are defined shifts for gig workers, but it feels like they could find a better policy than this.

CharlesW 3y ago
> I understand that Doordash gives workers the option of being paid minimum wage… Is it even an option in California? "Guaranteed minimum earnings: When you dash in California you earn at least 120% of minimum wage (based on the local minimum wage at the pick-up location) for active time on the platform (time spent on a delivery, starting from when you accept an offer to when you complete it), plus $0.34 per mile during active time, when driving a motor vehicle (for example, a car, motorcycle, motor scooter)." https://help.doordash.com/dashers/s/california-dashers https://help.doordash.com/dashers/s/california-dashers https://driver-support.grubhub.com/hc/en-us/articles/360053871292-How-does-Prop-22-affect-how-I-m-paid- https://driver-support.grubhub.com/hc/en-us/articles/3600538... > …but they get money only when the worker is actively making a delivery… "Active time" is acceptance to delivery, including wait time.
- karaterobot 3y ago
  It is elsewhere; maybe not in California. There appears to be two payment modes, base pay and earn by time, and the driver can choose which they want to operate under.
whatamidoingyo 3y ago
This happened to me as well. To my surprise, the DoorDash driver didn't actually deliver the pizza, they just grabbed it and went home, I guess. Quite funny. I got a refund.

_jal 3y ago

I guess we're down to music, movies and microcode.

doctornoble 3y ago

Perhaps Yum Brands has the data to back this up, but it seems quite a silly response that feels more political/ideological than based on sound economics. BIL was COO of a pizza chain. The cost for a large pizza was around $1.50 - even for pricey toppings and gluten free bread. Labor is cheap at ~60 seconds per pie. Biggest costs was rent. A $5 raise could be absorbed across and then some with a 10¢ increase in price or adding an extra $1 delivery fee. Strategically this makes little sense. A key factor of chain pizza’s business model is convenience & cost rather than quality. When faced with the inconvenience of not having delivery available or the extra cost associated with third party delivery services I wonder how many people will just opt for Dominos, Papa Johns or something else?

toomuchtodo 3y ago
If rent is the predominate cost, why do pizza delivery only ghost kitchens not take off? Doesn’t matter where it’s made, just where the customer is. You could make them in a shipping container dropped in a big box parking lot with a roll up door for delivery drivers to load their trunk, like Spirit Halloween for pizza. What am I missing? You don't need a robot pizza machine, you need an operating model where rent doesn't hold your bottom line hostage (based on my very limited understanding of the business fundamentals). Rent goes up? Class 8 Semi pulls up to pull the trailer to somewhere else with hookups. Edit: thanks for the learnings y’all!
- jimbob45 3y ago
  That's what Chuck E Cheese should be doing. They've got the playground/arcade business to be able to subsidize their pizza business to out-compete every other pizza chain out there. Instead, they're cutting costs on both fronts to have...two bad businesses.
  - deleted 3y ago
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  - sparcpile 3y ago
    Chuck E Cheese runs a virtual brand for their pizza called Pasqually's Pizza https://www.youtube.com/watch?v=7OTpHqq6bFg https://www.youtube.com/watch?v=7OTpHqq6bFg # Comparing Chuck E Cheese pizza and a rebranded CEC frozen pizza https://www.lastsqueaktonight.com/ https://www.lastsqueaktonight.com/ # Last Week Tonight's alternative episode when they discussed HOAs. it's a full and funny history of the pizza chain and includes the virtual brand

natas 3y ago

What surprises me is that all states with high minimum wage (CA, WA, OR, etc.) are the ones with the most homelessness; while all others do not have homelessness, drugs, and other sort of problems; or at least, not to the magnitude of high-wages states. Probably because low-wage jobs are necessary for the lower class to find jobs.

CamperBob2 3y ago
So, it's not surprising after all, it sounds like. Pretending that every job is worth $20/hour apparently has "unforeseen consequences"... the kind that the legislators and voters were warned about repeatedly.
- JumpCrisscross 3y ago
  Every [1] study [2] on minimum wages [3] using empirical data showed de minimis to positive effects on employment. There is absolutely a wage where employment is curtailed. But there is no evidence anyone in America has hit it. Much more corrosive to hiring is the amount of paperwork involved. [1] https://davidcard.berkeley.edu/papers/njmin-aer.pdf https://davidcard.berkeley.edu/papers/njmin-aer.pdf [2] https://irle.berkeley.edu/publications/working-papers/minimum-wage-effects-in-low-wage-areas/ https://irle.berkeley.edu/publications/working-papers/minimu... [3] https://www.journals.uchicago.edu/doi/abs/10.1086/685449 https://www.journals.uchicago.edu/doi/abs/10.1086/685449
  - CamperBob2 3y ago
    And yet there are a lot of unemployed people hanging around in the areas in question. If correlation==causation is sauce for the goose, it's good for ganders, too. Paperwork? Really?
    - JumpCrisscross 3y ago
      > yet there are a lot of unemployed people hanging around in the areas in question It’s almost like there are other variables involved. And again, you’re comparing highly-productive regions to ones that require federal subsidies to stay afloat.

caycep 3y ago

Pizza Hut here seems to be on its last legs too...the last time I saw one was at some rest stop on a trip to Arizona...

CharlesW 3y ago
It's definitely dying in SoCal, apparently the result of private equity firms having purchased most franchisees.
downrightmike 3y ago
I stopped eating it years ago because they changed something that always made me sick

SV_BubbleTime 3y ago

The thing that won’t happen, happened. Time will tell who is right.

zoklet-enjoyer 3y ago

I'm surprised that drivers in California aren't already making that much. I don't know what delivery drivers make where I'm at, but I see signs for store clerks paying $18-$20

Racing0461 3y ago

All the pizza huts by me have switched to carry out/delivery only and now they are removing delivery. Pizza hut is a shell of what it once was.

downrightmike 3y ago
They actually were just dine in carry out until the 80's when Dominos was making serious money delivering, so every other pizza chain started to deliver too.

zzzeek 3y ago

perhaps Pizza Hut has a product that is total garbage that nobody wants anymore anyway?

ahallock 3y ago
I'm not sure how people eat there anymore, even as a guilty pleasure. The ingredients got worse (cheaper ingredients, no whole milk mozz) and the dough, from what I understand, is shipped frozen, not made in store. Even in the 90s their pizza sent me running to the bathroom it had so much oil in it.
- zzzeek 3y ago
  even in the 90's "Pizza Hut" made Dominoes look like Arturo's on Houston Street. This is like a non-food product created in the most cynical way as some kind of corporate feed trough for extremely nutritionally impoverished people.
SV_BubbleTime 3y ago
This is basically my problem with the Bud Light boycott. There was a time when it was popular for its cheap and consistent qualities. But now there are so many options, and so many customizations and flavor with relative cost that it’s clear the brand was going to die anyway. That doesn’t excuse their piss poor messaging that was the real grievance most former drinkers had. Insulting and attacking your primary customers defensive someone who is never going to be your customer is just not a good move. But as the effectiveness, it was a prime situation, not necessarily the world’s most effective boycott.