California Pizza Hut Lays Off Delivery Drivers Amid New Wage Law(businessinsider.com)
businessinsider.com
California Pizza Hut Lays Off Delivery Drivers Amid New Wage Law
https://www.businessinsider.com/california-pizza-hut-lays-off-delivery-drivers-amid-new-wage-law-2023-12
18 comments
I won't use door dash for pizza. I really like that most pizza places have their own drivers. Door dash is too unreliable and loaded with fees.
I guess you may have to forgo delivery pizza if more chains go this way and realize the entire business is not profitable with higher labor costs and simply stop offering the service entirely.
Most delivery pizza service in CA is not by reataurants subject to the large fast-food chain minimum wage law, because they usually don't meet one or both of the fast-food or large chain [0] requirements.
[0] technically, “national chain”, but its a number-of-restuarants-within-the-US standard, not a breadth of geographic coverage standard.
[0] technically, “national chain”, but its a number-of-restuarants-within-the-US standard, not a breadth of geographic coverage standard.
Worst things could happen than food delivery evaporating due to living wages making it economically unviable.
Worse/worst things could happen than most things, however no wage is surely worse/worst than some wage?
That doesn't follow. Wages are just a sale of a service. If the service costs more to deliver than the wage, then it's better not to sell the service at all.
That doesn't follow? From the POV of the wage recipient / non-recipient, no money is better than some money? Have we slipped through a wormhole into bizarro world & nobody has told me?
if you had diabetes, would you be ok with a fraction of the insulin that you need to survive?
it's unethical/immoral to offer a fraction of a livable wage to desperate people who have no other options.
it's unethical/immoral to offer a fraction of a livable wage to desperate people who have no other options.
This $20 minimum was only applies to fast food workers: why do other workers only need a much lower livable wage?
Specifically, it only applies to workers employed by fast food restaurants with 60+ locations. This was easier for the legislature to pass, since they could paint it as a battle between big business and little employees.
This is confusing to me as well. Why is one industry specifically called out.
100% of insulin-dependent diabetics who don’t get enough insulin will die. Most people in unskilled entry-level jobs which pay less than a bureaucrat’s notion of what’s required to survive will not die, at least in the short term. Unskilled entry-level jobs have never really been a viable career, but they do serve a valuable function. Eliminating them by setting the price higher than the value seems like a backward step (e.g. if you’re a teenager or student trying to make a bit of extra cash).
“it's unethical/immoral to offer a fraction of a livable wage to desperate people who have no other options”
The lack of other options or desperation of the applicant are not the responsibility of the individual business making the offer. In a socialised economy, on the other hand, you might have a point.
The lack of other options or desperation of the applicant are not the responsibility of the individual business making the offer. In a socialised economy, on the other hand, you might have a point.
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Nobody should use DoorDash or any other food-delivery service. These scumbags rip off restaurants, going so far as to hijack their online presence by putting up fake phone numbers and posing as the restaurant to take orders.
Go to the restaurant and get your own goddamned food, or learn how to cook. Don't feed these parasites.
Go to the restaurant and get your own goddamned food, or learn how to cook. Don't feed these parasites.
I thought that was Grubhub, Doordash does it as well?
I've heard enough reports about more than one of them that I'm willing to condemn them all without specific examples.
My girlfriend works in restaurant management and has seen the douchebaggery first-hand. Oh, and drivers taking customers' food into the shitter. Yummy.
My girlfriend works in restaurant management and has seen the douchebaggery first-hand. Oh, and drivers taking customers' food into the shitter. Yummy.
DoorDash really seems to be the way tech has brought enshittification to restaurants. I'd love for it to revert soon, but I feel it'll get far worse before it gets any better.
Are pizza places where you are lower in fees/have free delivery? My local Domino's and Pizza Hut also have delivery fees, making Dashpass cheaper on the fees. The prices in the app are higher of course, but only by a few dollars.
Here in Germany I think we don't even have third party delivery, every food place has it's own drivers with a delivery fee ranging from 0-2€ in my city (~ 500,000 citizens)
You won't notice that it is door dash. You still order through the pizza place but the delivery is done by a door dash driver not their own driver.
You'll notice. I was in New York and wanted to get a good pizza. I called the place my friend recommended to place a delivery order, and it arrived 40 minutes late and cold. To add insult to injury, we didn't get some of the other items we ordered. We called back the pizza place, there was massive confusion, and then finally they said that we'd have to take it up with DoorDash. We had to argue for 10 minutes before they finally got the driver to deliver the rest of our stuff.
I wondered what kind of impact a minimum labor law on a specific industry would cause, and this is one example. Instead of first party delivery, Pizza Huts in CA will rely on 3rd party delivery (Uber Eats, Door Dash) to deliver their pizzas.
Seems like a huge gap in worker protections if its as simple as running all your delivers through third party contractors at below minimum wage.
Uber pays below minimum wage in California? How? Maybe their economics are better since they deliver for different types of restaurants or something?
> Uber pays below minimum wage in California? How?
By falsely classifying its drivers as independent contractors (and bamboozling the courts).
By falsely classifying its drivers as independent contractors (and bamboozling the courts).
They also bamboozled the voters. In 2019 the CA legislature passed AB5 in reaction to Uber being independent contractors. AB5 applies to tons of other industries too, including software development. It's extremely difficult to write software on contract in California now. Uber then created Proposition 22 and managed to get it passed, which exempted the original target of AB5, themselves, but left all sorts of other independent contractors still covered by AB5.
AB5 codified in statute and created exceptions to the existing case-law rule on classification, from the 2018 Dynamex v. Operations West ruling of the Supreme Court of California. It is more accurately a response to that ruling, not Uber’s status prior to the ruling.
Falsely?? How about a source for that bs?
Here's an example of a sane court ruling, with a detailed explanation for why: https://www.bbc.com/news/business-56123668 . Unfortunately US courts seem to pay too much attention to the form of of their business arrangements and not enough to the substance.
That is in the UK.. in the US, no one considers driving for Uber or Door Dash a job. It is side income, or better known as contract work. I don’t see how going onto an app and choosing gigs for people can be confused as doing work for a company.
For one, uber drivers can't set their own rates.
> in the US, no one considers driving for Uber or Door Dash a job.
I've seen plenty of posts to the contrary.
> I don’t see how going onto an app and choosing gigs for people can be confused as doing work for a company.
Well, there is a detailed explanation for why what Uber does constitutes employment in the article I linked.
I've seen plenty of posts to the contrary.
> I don’t see how going onto an app and choosing gigs for people can be confused as doing work for a company.
Well, there is a detailed explanation for why what Uber does constitutes employment in the article I linked.
I used to use Uber a lot more than I do now, and so many drivers I met were contract drivers for various transport and delivery app as their entire source of income.
More recently the ride share drivers I’ve gotten have been older folks who report that they’re just supplementing income. A lot of the delivery drivers (Uber, DoorDash, Postmates, Amazon Flex, Instacart, etc) I see are younger and seem to be doing it full time.
More recently the ride share drivers I’ve gotten have been older folks who report that they’re just supplementing income. A lot of the delivery drivers (Uber, DoorDash, Postmates, Amazon Flex, Instacart, etc) I see are younger and seem to be doing it full time.
That’s old news. Uber responded to that ruling by changing the specific things the Supreme Court based their decision on. They did not switch to employing people for set hours.
There's a separate minimum wage for delivery services that use pseudo-contractors. It's 20% higher than standard minimum wage but only when they're actively on their way to/from a delivery
The $20 min wage is only for fast food workers. I’ve seen a study that showed that Uber drivers actually make below minimum wage after accounting for gas and wear and tear too.
>I’ve seen a study that showed that Uber drivers actually make below minimum wage after accounting for gas and wear and tear too.
There are studies that show the opposite[1] as well, although they seem to reach different conclusions depending on the costing model. The studies that show they earn below minimum wage use a pro-rata model (eg. if you drive for uber 50% of the time, and drive personally the other 50%, then 50% of your depreciation, insurance, etc. gets subtracted against your earnings). This seems reasonable, until your realize that in many parts of the US, you need a car already, so it only makes sense to factor in the marginal cost, not the pro-rata cost.
[1] https://ecommons.cornell.edu/server/api/core/bitstreams/29f0...
There are studies that show the opposite[1] as well, although they seem to reach different conclusions depending on the costing model. The studies that show they earn below minimum wage use a pro-rata model (eg. if you drive for uber 50% of the time, and drive personally the other 50%, then 50% of your depreciation, insurance, etc. gets subtracted against your earnings). This seems reasonable, until your realize that in many parts of the US, you need a car already, so it only makes sense to factor in the marginal cost, not the pro-rata cost.
[1] https://ecommons.cornell.edu/server/api/core/bitstreams/29f0...
One limitation I see to the marginal cost model is the lack of information about how many of the part-time drivers got a more expensive car because they expected the extra income from driving to pay for itself.
For example, Uber requires a 4-door car that can carry 4 passengers. Someone may waver between buying a 2-door and more expensive 4-door model, and justify buying the latter to work for Uber part-time.
Similarly, it assumes one-person = one-car but there are one-car families. If one of the families decides to become a two-car family with the new vehicle used 50% for Uber, with the Uber work helping to pay for the car, then the marginal cost model also becomes more like the pro-rata model.
Without driver survey information, it's hard to say how this affects the marginal cost model is.
Uber also says the vehicle "cannot have any cosmetic damage, missing pieces, commercial branding or taxi paint jobs", so while plenty of people are willing to drive their own beat-up car, they need extra repair work to drive for Uber. This additional cost cannot be described as a marginal cost.
Again, I don't know how big an effect this might be, only observe I couldn't find where the authors mention this point.
I'm also a bit put off by this sentence: "The highest possible cost would be a driver renting a car ($290.66) and getting private personal insurance ($19.25) for $309.91 per week."
The $19.25/week is based on: "We have also included additional personal insurance. Such insurance costs vary widely, but in downtown Seattle an average seems to be $77 per month or $19.25 a week, which is considerably cheaper than buying insurance through the rental car company."
That number seems to be from 2021, at https://web.archive.org/web/20210613171346/https://quotewiza... which says:
> In Seattle, insurance rates vary based on which neighborhood you live in. The Seattle neighborhood with the most expensive insurance rates is Columbia City, where average rates cost $90 per month. Compare that to Seattle’s cheapest neighborhood, downtown, where average rates are only $77 per month.
Thing is, at the top of the page it says "On average, your neighbors pay $129 a month". This may be because "It's not a great idea to buy only legal minimum coverage. While it costs less, minimum coverage becomes more expensive if you file a claim."
Thus, the sentence is wrong, as that's choosing the lowest possible private personal insurance, rather than the average for the city.
Which means the $309.91/month does not reflect "the highest possible cost" because it's choosing the lowest possible location cost for the lowest possible insurance - and most Uber drivers don't live in downtown Seattle, I assume. Do they also all opt for the minimum insurance? I don't know, but surely that number is relevant.
Do people who opt to drive part-time for Uber keep their existing insurance coverage, or do they get higher insurance coverage? I don't know, and I didn't see the report consider this non-marginal cost.
For example, Uber requires a 4-door car that can carry 4 passengers. Someone may waver between buying a 2-door and more expensive 4-door model, and justify buying the latter to work for Uber part-time.
Similarly, it assumes one-person = one-car but there are one-car families. If one of the families decides to become a two-car family with the new vehicle used 50% for Uber, with the Uber work helping to pay for the car, then the marginal cost model also becomes more like the pro-rata model.
Without driver survey information, it's hard to say how this affects the marginal cost model is.
Uber also says the vehicle "cannot have any cosmetic damage, missing pieces, commercial branding or taxi paint jobs", so while plenty of people are willing to drive their own beat-up car, they need extra repair work to drive for Uber. This additional cost cannot be described as a marginal cost.
Again, I don't know how big an effect this might be, only observe I couldn't find where the authors mention this point.
I'm also a bit put off by this sentence: "The highest possible cost would be a driver renting a car ($290.66) and getting private personal insurance ($19.25) for $309.91 per week."
The $19.25/week is based on: "We have also included additional personal insurance. Such insurance costs vary widely, but in downtown Seattle an average seems to be $77 per month or $19.25 a week, which is considerably cheaper than buying insurance through the rental car company."
That number seems to be from 2021, at https://web.archive.org/web/20210613171346/https://quotewiza... which says:
> In Seattle, insurance rates vary based on which neighborhood you live in. The Seattle neighborhood with the most expensive insurance rates is Columbia City, where average rates cost $90 per month. Compare that to Seattle’s cheapest neighborhood, downtown, where average rates are only $77 per month.
Thing is, at the top of the page it says "On average, your neighbors pay $129 a month". This may be because "It's not a great idea to buy only legal minimum coverage. While it costs less, minimum coverage becomes more expensive if you file a claim."
Thus, the sentence is wrong, as that's choosing the lowest possible private personal insurance, rather than the average for the city.
Which means the $309.91/month does not reflect "the highest possible cost" because it's choosing the lowest possible location cost for the lowest possible insurance - and most Uber drivers don't live in downtown Seattle, I assume. Do they also all opt for the minimum insurance? I don't know, but surely that number is relevant.
Do people who opt to drive part-time for Uber keep their existing insurance coverage, or do they get higher insurance coverage? I don't know, and I didn't see the report consider this non-marginal cost.
Does the law not affect drivers for third party services?
Doordash, grubhub, and friends deliver bread so presumably they get the same exemption as Boudin
No. DoorDash and Uber drivers are not classified as “fast food” workers.
Technically this is a benefit as it would bring economies of scale - many restaurants can now enjoy delivery since they all share the same delivery network, resulting in more efficient delivery across the board.
There's an additional benefit. If the delivery side of the business results in a disproportionate number of 1 star reviews, then they can offload those reviews onto Door Dash.
An apartment complex I'm familiar with has 4.5+ star reviews on Google. They use a separate business to handle all of their tenets' package deliveries. If you look at that company's ratings it's filled with negative reviews.
An apartment complex I'm familiar with has 4.5+ star reviews on Google. They use a separate business to handle all of their tenets' package deliveries. If you look at that company's ratings it's filled with negative reviews.
This seems like another case of the law working as intended - when everyone thinks instead this is the opposite of what "they" wanted to happen.
I'd have agreed with you if you hadn't used "they" in quotes as if "they" are the same ones that keep UFO's under wraps.
I am not sure how it is there but here in NZ most places charge more for Uber Eats and Dash deliveries because margins are lower as these services charge both the customers and businesses.
I rather pay more knowing it goes to an employee salary than pay more and have the money go to these large corporations that try everything to pay drivers less.
I rather pay more knowing it goes to an employee salary than pay more and have the money go to these large corporations that try everything to pay drivers less.
Isn't this exactly what you'd think would happen? If a job is worth $x in the free market and the state puts an artifical restriction on wages that they should be at least $x+y, one of two things must happen. Either the cost to customers goes up by y or the job disappears. Guess pizza is not worth x+y right now.
Some missed parameters for the payment: The cost goes up and/or the margin goes down and/or the product gets cheaper.
It seems like a mistake to me. Uber managed to normalize the luxury of having your food delivered at a high markup. With Silicon Valley companies tightening their belts, their competitive advantage (running ads, tons of deals, etc) will dry up, so you’d think Pizza Hut franchises could just bump the delivery fee.
Title seems misleading, it’s not all of California, mostly SoCal.
It makes conceptual sense, if the third party delivery firms aren't subject to the same regulation, but I can't see them being happy with their reliability.
Some people specifically order from pizza places due to bad experiences with DoorDash and friends.
Some people specifically order from pizza places due to bad experiences with DoorDash and friends.
They should abolish tipping.
Once they abolish tipping, then they can set minimum wages.
Sadly, I wouldn't be surprised to see tipping integrated into self-check out stations soon.
Once they abolish tipping, then they can set minimum wages.
Sadly, I wouldn't be surprised to see tipping integrated into self-check out stations soon.
There are self-checkout machines that now ask for a tip [1]...
I don't see tipping going away any time soon, more's the pity...
[1] https://www.cbsnews.com/news/tipping-self-checkout-machine-c...
I don't see tipping going away any time soon, more's the pity...
[1] https://www.cbsnews.com/news/tipping-self-checkout-machine-c...
Wow. I mean, I've seen tipping hyperinflation with options for 20, 25 and 30% (I've been told some have even higher defaults) rather than the previous 10, 15, 20% and I've seen it integrated at places where a clerk merely rings you up (lots of airport shops) but not when there was no interaction with any person as in the article.
That's outrageous. I think I'm going to actively decline tipping as a protest. This is "tipping usury".
That's outrageous. I think I'm going to actively decline tipping as a protest. This is "tipping usury".
I've also seen anecdotal evidence where the percentage options weren't actually right - they were way more than what the percentage would actually be.
My theory, assuming this wasn't an outright fake, is that the options were actually free-form text (with a percentage set separately and not obviously displayed) and the scumbag running the place set the title to let's say "15%", with the actual underlying percentage much higher.
My theory, assuming this wasn't an outright fake, is that the options were actually free-form text (with a percentage set separately and not obviously displayed) and the scumbag running the place set the title to let's say "15%", with the actual underlying percentage much higher.
That particularly sucks because as a bike rider who sometimes likes to roleplay as a delivery rider, the one thing I cannot pick up is pizza. I would need a purpose built pizza backpack in order to reasonably deliver myself pizza, as I live in a hilly area and the panniers aren't enough.
[Dupe]
More discussion earlier: https://news.ycombinator.com/item?id=38775754
More discussion earlier: https://news.ycombinator.com/item?id=38775754
In other news, nearly 1200 new Door Dash and/or Uber Eats drivers join the ranks.
Im not getting this. Is fast food companies not making enough money?
Not enough to pay the new $20 wage to drivers and come out ahead on them.
They are making enough to pay their drivers $20/hour, but they are unwilling to do so as it will cut into their profits.
It's entirely possible that they would lose money on deliveries.
Not just make less profit, but actually lose money.
And it makes zero sense for the profit from eat-in diners to subsidize delivery. If delivery loses money, you end it.
Not just make less profit, but actually lose money.
And it makes zero sense for the profit from eat-in diners to subsidize delivery. If delivery loses money, you end it.
The big problem with CA's minimum-wage laws is that they're piecemeal bullshit. A minimum wage should not depend on what sub-niche of a particular industry you work in. A living wage is a living wage. Are they going to pass 10,000 separate minimum-wage laws for every possible vocation?
California is a bloated hog of bureaucracy, gobbling up billions or trillions of dollars for no benefit. Disgusting.
California is a bloated hog of bureaucracy, gobbling up billions or trillions of dollars for no benefit. Disgusting.
Why is this regulating just fastfood workers?!
It's specifically regulating fast food workers employed by large companies, presumably because it would have been harder to pass a law that also affected mom-and-pop restaurants. Of course, now those mom-and-pop businesses have to compete for labor with $20 fast food wages as the backdrop, so they are affected either way. But I suppose they also benefit from these mass layoffs, which increase the supply of available labor.
My point is that it discriminates one type of business against another. Labor is labor - if one type of labor should be paid at least $20/hour, so should all others.
I'm sure the proponents of the bill would have preferred an across-the-board bump, but this is all they could get passed. I wouldn't be surprised if this were rolled back via referendum after its effects are felt.
Everywhere else in the world there's a minimum wage. And it works well. There are other basics with decades of data behind. I don't get why America wants to reinvent the square wheel so badly!
Just another reminder that the actual minimum wage is, in fact, always $0.
Minimum wage can surely be negative? Consider unpaid internships.
And the actual amount of work done for that wage is proportionate. Don't you just love economics?
You are confusing wage with income.
Touché
Right, that’s why the service industry is flooded with job applications right now..
> Pizza Hut fires all delivery drivers due to CA fast food minimum wage law
This is not the original headline and misrepresents the article, which is that two large Pizza Hut franchisees in CA are doing that.
This is not the original headline and misrepresents the article, which is that two large Pizza Hut franchisees in CA are doing that.
“Two Pizza Hut operators in California are eliminating their in-house delivery services at hundreds of stores, resulting in more than 1,200 driver layoffs”
No mention of any layoffs in the Bay Area. Seems mostly concentrated to SoCal + Sacramento.
Probably trimmed due to HN's length limit
totally and inaccurately rephrased ≠ trimmed
If you complain about headlines on HN you'll get attacked. Or even you mention this fact.
Flag away, infants.
Flag away, infants.
As the OP of the headline complaint, I do that a fair amount, and I've almost never gotten attacked for it.
I suspect if you are getting attacked when you complain about headlines, its about something more specific than just the fact you are complaining about a headline.
I suspect if you are getting attacked when you complain about headlines, its about something more specific than just the fact you are complaining about a headline.
No one has ever stated any other reason (even on the very, very few occasions when someone even bothers to make an excuse).