Pizza Hut made over $6 billion last year, you’d think they could afford to pay their drivers.
Of course the can pay their drivers but think of the poor shareholders who may see 0.1% less profit or the CEO who may get only 99% of their usual bonus. Oh the horror!!
The Pizza Hut corporation will be fine. These are franchises we are talking about. The franchises pay an initial fee of $25k and then 6% + 4.75% sales/marketing fees to Pizza Hut.
It’s the owners of the franchises that are responsible for fucking over their employees. While Pizza Hut could reduce their fees, they won’t. Franchise owners could increase pay, but they won’t. It’s more likely that the franchise owners will offload deliveries to Uber and Door Dash and not have to worry about managing drivers anymore.
The entire model sucks, so I am not blaming franchise owners over the corporation. They are both at fault for relying on the extortion of teenagers or other people who don’t have extremely profitable job skills.
https://franchise.pizzahut.com/faqs/
Edit: Also, these aren’t one-off mom and pop franchise owners anymore. These are franchise owning conglomerates that likely have more negotiable franchise fees.
Won’t offloading the delivery to those services cost even more? They take a pretty hefty cut of the sale. Last I heard it was around 30% of an order.
It’s staggering how many people don’t understand the difference between franchises and corporations on wall street in the internet age
It’s staggering how many people assume things without looking into them. In this case, it’s a corporation called Pac Pizza, LLC and makes over $25 million per year that’s doing the layoffs. I think they can pay their delivery drivers an extra $4 (according to the USA Today article linked above) per hour.
If they had to pay all of their less than 500 employees (according to the Zoominfo page linked above) the extra $4 per hour, and they all worked full time, 40-hour weeks all year, the company would have to pay just over $4 million in extra wages.
Assuming the franchises make the low end of the estimated revenue linked above, $4.5 million would be 16% of the total. Increasing prices by 16% to cover that cost is far less than the approximately 40% customers end up paying when using third-party delivery services.
All in all, this sure seems like the franchise corporation (probably in cahoots with Pizza Hut proper) is just using these delivery jobs as a political stunt in opposition of the mandated wage increase.
Here’s the takeaway, though. Any employer, including but not limited to mom-and-pop businesses, that can’t afford to pay its employees a living wage should not be in business.
It’s staggering how many people assume things without looking into them. In this case, it’s a corporation called Pac Pizza, LLC and makes over $25 million per year that’s doing the layoffs. I think they can pay their delivery drivers an extra $4 (according to the USA Today article linked above) per hour.
If they had to pay all of their less than 500 employees (according to the Zoominfo page linked above) the extra $4 per hour, and they all worked full time, 40-hour weeks all year, the company would have to pay just over $4 million in extra wages.
Assuming the franchises make the low end of the estimated revenue linked above, $4.5 million would be 16% of the total. Increasing prices by 16% to cover that cost is far less than the approximately 40% customers end up paying when using third-party delivery services.
All in all, this sure seems like the franchise corporation (probably in cahoots with Pizza Hut proper) is just using these delivery jobs as a political stunt in opposition of the mandated wage increase.
Here’s the takeaway, though. Any employer, including but not limited to mom-and-pop businesses, that can’t afford to pay its employees a living wage should not be in business.
There’s 19,000 pizza huts, but most all of them are franchises. It’s not “pizza hut” firing drivers over this. It’s franchise owners. Also, if you were to do some napkin math, 19,000 (I know. Just california, but that would hardly be fair to everyone else) pizza huts needing say…5 drivers each at 40 hours a week paid 20 means a cost of about 28 after insurance and such… that’d be 95 thousand drivers…$106,400,000 a week…$5,532,800,000 a year.
Shit gets expensive.
But face it. Delivery drivers make a lot in tips. People have been willing to do it using their own vehicles for decades while they make super low minimum wages. Making $20/ hour plus the tips will have the delivery guy out doing everyone else at the restaurant, which means their pay will have to go to like $35/hour which means a stupid pizza is gonna cost $30. Let uber eats handle the deliveries.
What pizza hut has 5 full time drivers? There’s only 1200 people affected by this and 560 locations so a little more than 2 per location. Now let’s look at the cost those delivery apps charge 30%. So if 35% of sales are deliveries now theyre paying Uber ~110k to deliver their pizzas. 28$/hr is high closer to 23-25$/hr for overhead. That’s roughly what the delivery drivers would have cost and now they’re getting way shittier delivery service and people are much less likely to buy pizza from them. Sounds like a dumb move.
5 too many? I just figured there’d be like 2 delivery people at any given time and trying to have 3 on Friday and Saturday night.
But as to Uber, that’s the customers choice if they want to pay an arm and a leg to have pizza brought to their door. It won’t much effect the pizza hut. Store dedicated delivery drivers are a thing of the past now. They’ve been outsourced.
Pizza in Boston delivered by door dash is routinely right about $30 before tip. My credit card offers free door dash premium whatever it’s called and I usually choose places offering a promo and tend to order early when there are also promos. That brings things down to the $20s. But it’s generally about $30 with tip even doing all that. If I’m not paying attention it’s easy to order a $45 pizza.
To be fair I don’t eat from pizza Hut or Dominos or other chains. Those might be a few percent cheaper.
That’s half my point, though. You choosing to pay $30 through door dash or Uber eats is your choice. The restaurant isn’t charging way more for their pizzas because they have to pay everyone on staff a lot more. Delivery has been outsourced and so have the added costs that go along with it.
$20/hour is only part of employee compensation. It does not include benefits or taxes. Your employer pays a lot of taxes on your behalf.
Don’t even get me started on the money and time taken to recruit, hire, and train new employees.
Don’t misunderstand me. I support a higher minimum wage. I am a firm believer that minimum wage should be $25/hour and increases should be tied to inflation.
Don’t even get me started on the money and time taken to recruit, hire, and train new employees.
For delivery drivers?
Know how to drive? If not, next. Here’s the pizza. Put it on a flat surface in the vehicle, don’t throw or flip it. Use Google maps to get to the house. Hand it to the customer. Come back. Done.
They could have just focused on providing a better delivery experience, instead they’re going to let uber drivers deliver cold pizza with the wrong soda.
With higher delivery fees! Why on earth would anyone even order Pizza Hut after this? If I’m paying obscene delivery fees and jacked up menu prices through doordash or whoever anyway, I’m getting better food than that. Or just eating at home like I end up doing every time I look at the total from one of those services.
It doesn’t even make sense as sure, Uber doesn’t pay drivers much and Pizza Hut won’t have to employ them, but customers will have to pay more. So Pizza Hut could have just said “due to increases in wages we have to implement a delivery fee”, and actually paid their drivers. They’d rather do this dramatic ‘omg we have to fire them’ thing though.
Its a punitive measure. Our lords want to send the message that further wage legislation will not be tolerated.
You are vastly overestimating the brain dead American population that will see the higher price, order delivery anyway, and then stop thinking about it.
Like, they just don’t think about how it will affect their finances at all. People order takeout and delivery every day without a second thought.
To be clear I am not victim blaming the poor, but we are beyond late stage capitalism here. They won.
After winning on Prop 22, Uber/Lyft guaranteed drivers $13/hr. I’m not sure where the likes of Uber Eats/Grubhub stand in comparison, but even if we assume they’re also at $13/hr, that’s a full ‘federal minimum wage’ less than the Pizza Hut drivers would need to be paid. For doing literally the same job but with way, way worse benefits (e.g., having to provide your own insurance).
It’s actually insane. Prop 22 is a travesty.
$20/hr isn’t even what I would consider a living wage in California, and Pizza Hut is here proudly admitting they were paying their drivers substantially less than that. But the deliveries will still happen, just to even worse-paid people. It’s a crazy cycle of abuse of labor.
Seriously. I don’t see why companies that were already paying for delivery drivers (eg, the chain pizza companies) don’t sell their delivery services as a value add. When I order a pizza from DoorDash, it doesn’t come wrapped in an insulated carrier and so often arrives cold. I’m not sure what else they could throw in but they’re just tossing it (no pun intended).
I’m also curious as to the numbers on this. I don’t know if this was done after a full evaluation of raising delivery service fees or other ways of addressing it, but the fact that they’re doing it in all of California instead of keeping it in markets like SF or LA makes me think it was a petulant act rather than a rationally justified one.
Just as a clarification (not a defense) from someone that drives for DoorDash - every time the driver picks up a pizza order, they are required to provide photo proof that they own a pizza bag. I’m not saying this forces drivers to use them, but they have to upload different pics of their pizza bags sometimes with every pickup.
Edit: autocorrect
The reason you have to do this is because you drivers are notorious for having absolutely zero standards and a solid “idgaf” attitude.
This is so weird to me because pizza is one of the few things I actually order for delivery… there isn’t much around here other than 3rd party services, which I don’t use because I’m rural and the way it works here is just gross. Had 6 come in for the same failed order while I was out on Tuesday (menu wasn’t open for that item but it was ordered through another platform, and 6 people came asking for it for the same order because of how the platform works). I can’t imagine actually working there.
But I suppose in more urban areas, pizza hut is competing with actually good food also on delivery (for a very steep markup people are apparently willing to pay or the services would die), so it’s no surprise they can’t compete on their own; and still also turn record profits. Heaven forbid they die in the region. 🙂
And they are going to charge for it. I hate pizza places that have done this. It’s at LEAST $20-$30 more now to get delivery.
If it even comes at all. I had several just disappear driving all over town and never show. Last one I got a bag of soup. That’s the plastic bag, with spilled bowl of soup, leaking out of said bag. Never again
It has been getting worse.
Out of curiosity, did you send that message recently or a day or two ago? My inbox says it’s been like 20m. Looking at the thread it says 2 days.
If your business plan can’t make a profit while paying your people a living wage, than it doesn’t deserve to be in business.
Expecting people to live paycheque to paycheque in order to subsidize your desire to be a business owner is the Pinnacle of bullshit.
Pizza Hut is a joke in the bay area and Sacramento area. There are just too many good pizza places. I think it’s messed up, but I also think they aren’t doing well for more than just the delivery process.
That’s good to hear. I left the bay area almost 20 years ago and I remember there being very little good pizza back then. Don’t get me wrong - there was some great food to be found, but the pizza wasn’t it
Look there is always better pizza, but I’m still going to have to buy Pizza Hut once in a while unless The Pizza Shop in SF starts selling stuffed crust
This is exactly why we have the type of shit we have right now. Because stuffed crust is more important than principles. I swear people have no willpower anymore.
If you actually want cheap shitty pizza, then at least go to Little Caesars and only pay $5 for it
You mean some gimmick no one gives a fuck about? Have you seen a real pizza restaurant sell stuffed crust? I haven’t. And if they did I wouldn’t order it.
You’ll eat shitty pizza that tastes like ass purely because it has stuffed crust.
Bullshit like this is why everything in this country is going down the toilet.
The new law, a modified version of the FAST Act proposing a minimum wage increase for fast-food workers to $22 an hour this year, has faced resistance from major chains such as McDonald’s, Chipotle and Chick-fil-A. These chains said they plan to raise menu prices to offset higher operating costs.
Can’t trim executive pay or profits. Must cut out services. All hail the mighty dollar.
Same reason my bank branch has tons of empty stations and only two tellers and a long line. Same reason they’re closing the drive-through lanes where my mom banks in the midwest. Convenience for customers is now the enemy getting in the way of higher profits.
I recently introduced my partner to The Sopranos. It opens with Tony Soprano commenting that he feels like he got into the scene (the mob) at the end of its heyday. I feel that way about capitalism.
Anecdotal for sure, but I can’t remember the last time I actually had to step foot in a bank. I’d argue that banks CAN cut staff as I can’t be alone in not really needing to go into a physical shop to bank anymore. All my banking requires an appointment.
However, fast food, in particular pizza places, need delivery drivers. Especially pizza hut. I can’t for the life of me think that people are going to go in and sit at a pizza hut anymore… what is it, 1988?
They’ll probably partner with door dash and triple the price of delivery doing so
To be fair, just because you may be out of touch with some part of business or society doesn’t mean it no longer exists or operates… That’s incredibly self centered. We are all out of touch with various industries, but that doesn’t mean it no longer operates as intended.
Every pizza shop I’ve been to in the last 5 years has been bustling with sit down eaters. Just not pizza hut.
There’s a bunch of old dumbasses who refuse to learn any new skills. We’re still gonna need people at banks until uhhhh… they’re gone.
I’m sure no one has needed to wire large sums of money or get cashiers checks these days, no one buys homes either anymore right? Fraud definitely doesn’t exist either 🤣
Just because you don’t have a use for it doesn’t mean others don’t. I’m sure there are many reasons I can’t think of for wanting to go into a bank in person, if that works for the folks that do it, how is that a problem? Does that harm you?
Can’t trim executive pay or profits. Must cut out services. All hail the mighty dollar.
Well I mean yeah, how else are CEOs going to have 15 yachts? You think having only 14 yachts is acceptable? Yeah right!
F*ck the people who empower gig economy. Fuck Uber eats, door dash and everything similar.
People generally should use the best option. Often expense is the metric. These are able to operate at competitive rates because they get away with shenanigans. They should be regulated properly, then their rates would reflect that and people would use them less.
Already they are expensive AF. The menu prices on doordash can be like 50% more, then there are the service fees and more.
Yeah, it’s this. The only thing innovated by DD or UberEats is avoiding regulation. This is the real cause of all of the enshittification that everyone is seeing. It’s been the plan all along; charge an absolutely unsustainable price, jack things up when you’re the only option. DD is already well along this pattern; it used to be much cheaper, and it’s still going to go up.
I look forward to the downvotes again because everyone has their heads so far up their asses but we are the problem. Fuck us.
We are the reason we are racing to the bottom. We expect cheap & fast and we don’t care how it happens as long as it does.
I think about this a lot whenever Airbnb comes up. People mention it and I’m like airbnb caused rents to rise a lot, and I just get deafening silence.
Honestly I would respect “I know it has externalized costs I’m not paying for, but it’s convenient and I accept it’s not the best thing” more than awkward silence or clumsy justifications.
I’m guilty too, sometimes. I should probably order directly from the restaurant instead of using seamless or whatever
I look forward to the downvotes again because everyone has their heads so far up their asses but we are the problem. Fuck us.
We are the reason we are racing to the bottom. We expect cheap & fast and we don’t care how it happens as long as it does
Yep. Some More News had a sobering bit in their video on the generation war about how Millennials are also responsible for fucking up the world for the people coming after us like the Boomers were (as in, the real problem lies with politicians but we do make it worse in some ways). The gig economy was one example of fucking shit up for Gen Z without us realizing it at the time.
(Obviously the major problem here is that somehow DoorDash and Uber Eats get to pay people less, poorly written regulation that carves out concessions to make shit worse for everyone.)
Been a while since I watched it and I don’t know how well it holds up but it was interesting.
For every else (like me) who had never heard the term ‘gig economy’ before:
A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. The term “gig” is a slang word for a job that lasts a specified period of time. Traditionally, the term was used by musicians to define a performance engagement.
