CA Pizza Hut Layoffs due to $20 minimum wage

[storewanderer]

https://www.foxbusiness.com/economy/cal ... nimum-wage

So basically using the wage increase as an excuse to stop doing deliveries themselves. A lot of liability and other issues doing their own deliveries. I'm surprised they were still doing their own deliveries. I wonder what the reason was. Franchisor requirement? Competition?

Could have added it into the fee... like the third party providers do...

I'm surprised they hadn't already shifted this to the third party providers. Luckily for customers thanks to the third party providers they now have way more food delivery choices than just pizza.

[Alpha8472]

Apparently having their own delivery drivers was profitable enough with a low wage. A small increase to $20 seemed to put them over the edge.

[ClownLoach]

https://www.foxbusiness.com/economy/cal ... nimum-wage

So basically using the wage increase as an excuse to stop doing deliveries themselves. A lot of liability and other issues doing their own deliveries. I'm surprised they were still doing their own deliveries. I wonder what the reason was. Franchisor requirement? Competition?

Could have added it into the fee... like the third party providers do...

I'm surprised they hadn't already shifted this to the third party providers. Luckily for customers thanks to the third party providers they now have way more food delivery choices than just pizza.

The service level provided by these companies has been in decline for a couple of years now and is just getting worse. Meanwhile their algorithms now have them make multiple pickups and deliveries resulting in their delivery of cold food. I have stopped using Doordash and other services because they are too expensive and unreliable. Pizza Hut is not what I consider a quality pizza but at least their delivery crews had hot bags etc., now they are likely to just take a cardboard pizza box and throw it in the back seat guaranteeing a bad result. Their deliveries will probably be an hour or more out now.

Domino's is hardly a great pizza but since they revamped about a decade ago (when they ran the commercial admitting their pizza was crap) it is much better, and I consider it an acceptable pizza when we need one because sometimes things go wrong (dinner doesn't come out right, etc). The key is that their delivery service process is quick and effective, pizza always arrives hot and in good condition plus their drivers are attentive and friendly. In my old apartment complex Doordash people could not find my apartment even when I left explicit instructions such as what color doormat and door wreath to look for so it doesn't go to the wrong place. Their people were leaving other people's food at my door all the time. Domino's never made those mistakes, was always fast, and the process is transparent through their delivery tracker website. I have seen where their tracker website showed the pizza waited too long for delivery pickup and as a result they notified me they were stopping and remaking the order. If they switched to a crappy gig service I would no longer have any reason to consider Domino's because I value the reliability of their delivery over their pizza.

I expect these companies like Pizza Hut will just rework their websites and send delivery pickup requests to Doordash or Uber Eats or whoever asks for the least pay. The customer probably won't be told that Grubhub or whatever is delivering their pizza.

[reymann]

pizza huts around fresno have slowly been closing over the years due to their declining quality. the majority of pizza places around town have already outsourced delivery. i now just take my own pizza warmer bag and opt for carry out since they can't me in the county island. the $20 minimum wage may result in some fast food places closing earlier and others may simply opt to go back to the takeout model to save labor costs.

[storewanderer]

Pizza delivery volume should be down significantly since there are so many other food delivery options now...

They could give hot bags to the Doordash or whatever drivers and instruct them to place the product into those hot bags. I have seen Doordash insulated bags used by some pick ups at various fast food places. Not sure when those get cleaned or how that works. The driver's dog walks all over it in the back seat when they're off duty etc.

[ClownLoach]

Pizza delivery volume should be down significantly since there are so many other food delivery options now...

They could give hot bags to the Doordash or whatever drivers and instruct them to place the product into those hot bags. I have seen Doordash insulated bags used by some pick ups at various fast food places. Not sure when those get cleaned or how that works. The driver's dog walks all over it in the back seat when they're off duty etc.

I respectfully disagree. There is a relatively small number of people who are using the delivery apps still, versus the old fashioned "just order Domino's" crowd. Plus pizza delivers better than most foods which is why it's been delivered for so long. Domino's annual revenues were up 2019, 2020, 2021, 2022 and so forth.

[HCal]

I respectfully disagree. There is a relatively small number of people who are using the delivery apps still, versus the old fashioned "just order Domino's" crowd. Plus pizza delivers better than most foods which is why it's been delivered for so long. Domino's annual revenues were up 2019, 2020, 2021, 2022 and so forth.

Perhaps this may be generational, but in my observation younger people are more likely to default to a general delivery app. They aren't going to install a specific app for a restaurant, and they certainly aren't going to (gasp) talk to someone on the phone.

The people who are old enough to have been ordering pizza before Doordash existed might be continuing to do so out of habit.

I would guess Domino's annual revenues were up mostly due to COVID and inflation.

[ClownLoach]

I respectfully disagree. There is a relatively small number of people who are using the delivery apps still, versus the old fashioned "just order Domino's" crowd. Plus pizza delivers better than most foods which is why it's been delivered for so long. Domino's annual revenues were up 2019, 2020, 2021, 2022 and so forth.

Perhaps this may be generational, but in my observation younger people are more likely to default to a general delivery app. They aren't going to install a specific app for a restaurant, and they certainly aren't going to (gasp) talk to someone on the phone.

The people who are old enough to have been ordering pizza before Doordash existed might be continuing to do so out of habit.

I would guess Domino's annual revenues were up mostly due to COVID and inflation.

People are not switching to 80% marked up cold burger and fries deliveries over pizza. Domino's is actively building and opening new stores while Pizza Hut has been declining and closing stores for years which will be worsened by this decision to move to gig worker delivery. The impact of these app based delivery services is greatly overstated, and fact is they were already consolidating due to declining business before COVID. They got a temporary bump and that is gone, plus legislative changes have forced significant charges into their model. I can't get a driver to pick up any Doordash order in my area; in the college town that was very busy I lived in before once again it became impossible to get a Doordash delivery by late 2021 due to the loss of most of their drivers because of their deteriorated business and over-staffing of gig workers. I flew to the Vancouver, WA area where Doordash simply wasn't even available in the area I stayed recently, and meanwhile Domino's is everywhere and opening new stores due to growing business. I am just going to say again this is a apples and oranges comparison. There aren't any customers at Domino's who are suddenly switching to the Doordash app and ordering Wienerschnitzel hot dogs or gas station sushi or whatever else. At the end of the day, you can try to deliver anything from soft serve ice cream cones to a grilled filet mignon but most food does not travel well over long distances or time frames... Pizza does and that's why the vast majority of delivered food is still pizza.

And to be clear, not one of the customers ordering Pizza Hut delivery today is going to be switching to ordering on the Doordash or Grubhub or whatever other app right now either. These are two completely different business models. The work will be all behind the scenes and the customer will most likely not know that their Pizza Hut delivery is being taken by Doordash.

Only 14% of the entire pizza delivery industry is delivered by the combination of Doordash, Uber Eats, Grubhub etc. And 65% of delivered food is still PIZZA! And that is UP from 59% Pre pandemic according to the lovely Google AI response I received when I searched. That means 86% of pizzas are delivered the old fashioned way by drivers employed by the pizza shops and that is after all of these years of alleged "explosive growth" of these insanely expensive services that won't get a small pizza pie to your house for less than $40 by the time you're done with the up charged price, mysterious operating cost percentages hidden in the sales tax (done this way for people who can't do math, you'll see your sales tax is totalling 20%+), plus a fixed surcharge, plus a tip, and it'll take Doordash an hour to get it there frozen cold after 3 other pickups and stops when Domino's would have delivered it in a company car, clean with installed warming oven, electric powered, and less than 30 minutes from order time plus it costs $10 less. And don't even get me started on how Doordash steals intellectual property by uploading restaurant published images of food, their menus etc onto their website and app to create deliveries for businesses that don't even want to deliver with them, make fake phone numbers for the same businesses, and they use overseas call centers where someone calls into the restaurant saying their name is Michael Jackson and they are ordering a deluxe pizza for pickup at 7:15 but it's really for a Doordash driver who will pick up that food and deliver it unsecured, then it arrives cold and ruined and the customer calls the restaurant who responds that they don't deliver via Doordash and find out they've been scammed by them.

The pizza places aren't going anywhere.