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Pizza Hut franchises in California lay off all delivery drivers ahead of $20 minimum wage increase
(www.sfchronicle.com)
this post was submitted on 26 Dec 2023
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It would take a lot to convince me that they haven't been discussing this for years and have been waiting for the right time. The market is now loaded with others to do the delivery, which was probably one of the considerations. I'm sure another was how to announce it where they can blame someone else; at least to the point of ensuring some will defend them.
The minimum wage increase is their excuse. What they are doing is outsourcing their delivery to a 3rd party (GrubHub, Uber eats, etc). They wont have to pay them anything, the customer will. They are decreasing their head count, payroll, insurance, taxes, benefits, etc. They will lose some sales, but that wont even be close to their cost savings. They will easily make more money while selling their product at the same price. Any business would love to be in the same position.
Weird part is that San Diego increased their minimum wage to $15 an hour in 2016, $18 an hour in 2018, and $20 an hour in 2020. Papa Johns and Domino's still have delivery drivers. I can't actually speak to Pizza Hut, since I never order from them.
Methinks this is just more corporate greed that will be masked as "inflation," even though their costs just went down.
Domino's runs very tight delivery radius like 2 miles so they probably just get by with less staff and more locations
I'm not sure. I worked for all three chains, and it is true that all the Domino's and Papa John's locations strictly restricted their delivery to 2 miles, all the Pizza Huts that I worked for restricted their delivery to 2.5 miles.
I cannot imagine that it's better to give up 40-60% of your sales just because of an extra half mile delivery range, rather than simply reducing your delivery range.
They will just use Doordash drive where you can summon a driver for $6 usually and charge a $6 delivery fee. That's what my place does in Florida as insurance rates for the business to have drivers is insane. Those drivers are higher caliber and need to be the top few % of Doordash drivers to qualify to get summoned.
It's such a short sited goal though. Those delivery apps are going to start dictating terms and extracting money from restaurants eventually.
Delivery apps are not in a strong position though - both demand (customers) and supply (delivery personnel) easily change where they are on.
😂 Come on, man, like they're not use this to increase prices.
That's not true that pizza hut won't pay Uber etc to deliver. Uber takes 30%. Since it's a large chain they might be able to negotiate something better. If you can make 2- 4 deliveries an hour depending on your rang and how busy the place is. I used to deliver in highschool and sometimes could do 6 an hour when it was real busy and deliveries were close to each other but averaged 2-4. Then with Uber eats the drivers aren't reliable and drivers don't have pizza warmers to keep it hot in the car. Sounds like this just means their delivery business will drop to near nothing.
I'd say that they'd lose more business than that, but I guess not considering how happy people are to pay ridiculous prices to Uber Eats and DoorDash for fast food that's already overpriced. My neighbors get DoorDash from fast food places 5-6 times a week.
Why would they need an excuse? No one cares about the principle of the matter except anti-consumerist hipsters who weren't eating their pizza anyway.
Shareholders. They might have a opinion on massive layoffs and long term success of the company