Pizza Hut to lay off California workers after minimum wage increase | Hacker News Reader

Pizza Hut to lay off California workers after minimum wage increase

cbsnews.com

32 pointsbratao39 comments

First 2 sentences make the situation far more clear:

> Pizza Hut is set to lay off more than 1,200 delivery drivers in Los Angeles, Orange and Riverside counties in the coming year, ahead of a new state law that boosts the fast-food minimum wage by $4 to $20 per hour.

> Pizza Hut franchises are preparing to pivot toward third-party apps like DoorDash, GrubHub and UberEats for pizza and food deliveries.

And if you know how "minimum wage" works for DoorDash, etc. drivers in CA...

Pizza Hut has a $4.99 delivery fee in CA so either they are claiming they can't manage to sell four pizzas and hour or this isn't about the bill but about reduced demand.

Ah...Pizza Hut's bottom-line cost of employing a "$20/hour" delivery driver is a lot more than $20/hour. (Assuming they're employing him legally, vs. "cash under the table".)

And maybe talk to somebody who's done delivery driving about being able to sustain a 4-delivery-per-hour average, through their whole shift, day after day.

You don't delivery pizza for the delivery fee... You deliver pizza to sell more pizza.

My point is the delivery is alone is almost covering your cost a lot of the time.

At 4 pizzas an hour you haven’t covered taxes, benefits, or any business costs.

Why do you exclude the value of the pizza delivered?

It isn't like they only got $20 total...

How does minimum wage for for DoorDash etc drivers in California?

Aren't they gig workers so they are all "self employed" on a 1099 and the minium wage does not apply?

AIUI California minimum wages:

A) fast food employee: $20/hour

B) other employee: $16/hour

C) delivery gig worker: $19.20/hour plus $0.30/mile (but only for the time you're actively on a job)

I guess they did the math and figured out that C is cheaper than A. If the demand for pizza delivery workers is spiky, perhaps it makes more sense to link the costs to the actual output (# deliveries).

Why do fast food workers get to make more than other employee types?

According to this article, it's the result of union strategy:

https://calmatters.org/economy/2023/12/minimum-wage-2024/

I don't know much about it.

also, you only pay a gig worker for the time they are delivering, not between orders or sitting around on slow days.

I suspect what will happen is the laid off drivers will still be delivering pizzas for Pizza Hut, but will be paid by Doordash et al instead of Pizza Hut, and will ultimately have reduced compensation.

Perhaps, or they might have the same compensation overall but less idle time, i.e. work harder for the same pay.

How do you work harder delivering pizzas? Break the speed limit?

You deliver more pizzas.

> less idle time

Think of how many employees you could have if you didn't have to pay them at all.

But they won't be employees. They'll be contractors. Also, you still have to pay them, it's just that rather than paying them by the hour you're paying per delivery.

keeping it specific to this article, pizza hut does NOT have to pay them. the consumers bears the cost directly. because of the way food is priced, this will likely be net zero or slightly more expensive for the consumer, but because of the way they perceive price it’s better than pizza hut simply raising prices.

for the same reason that restaurants keep the price the same but in small print charge a mandatory fee of some kind for benefits of what have you.

Which is why sunlight laws are so important, the market can't effectively respond to pricing information if that information is obscured.

This is a situation that should eat into supply side profits because buyers are far more price sensitive and have a wealth of alternatives.

Not taking a position as to whether that's good or bad but hiding the price increase is something that really ought to be difficult to pull off.

>but because of the way they perceive price it’s better than pizza hut simply raising prices.

But wouldn't the typical consumer go to grubhub or whatever, see the inflated price, and then grumble about grubhub and/or pizza hut? Also, aren't delivery fees typically not included in the list price? I'm not sure how being slapped with grubhub delivery fees at checkout is any different than being slapped with pizza hut delivery fees at checkout.

My domino’s here in Germany, Aachen, charges extra 20% for orders with the delivery,

Even for a single order of breadsticks? Just seems like delivery only involving added % would cause jerks to order small things.

Yes. Any delivery is 20% on top.

This will not be neutral on Pizza Hut. The delivered price is their price.

That's the opposite of how I perceive price. I don't use delivery apps because they're riddled with fees. If you hide all of that in the cost of the good and pretend it's free, I might fall for it. But if I find out the in store price if different.... Then I'll think you're a lying POS and stop using that service again. I dunno. I don't like fees but I dislike hidden fees even more. Anyway, moral of the story is just do 1 single fee and be very very upfront about it. If you make me pick and choose items and then tell me at the last second.. then you are also scum.

Whether that's fair and livable is a separate issue to consider. If it's not fair and livable, it doesn't mean that setting a lower minimum wage is the answer.

Barring them from working unless they can find a job that pays them a "living wage" isn't the answer either.

Then it's going to be an impasse, because offering human labor for a price that is less than the generally agreed upon lowest amount a person can live on defeats the entire point of establishing a living wage.

Unskilled labor, especially individual laborers, have zero practical leverage. In the absence of government controls wages get driven to zero or unions form to claw back that leverage. So by all means abolish the minimum wage and living wage, I would love to see unions pick up even more steam.

I noticed that Steak-n-shake went serverless (lol). I wish more restaurants would do this. I abhor begging for refills and tipping for the pleasure of it. It's strange to see so many bottom-tier restaurants have wait-staff and have not already switched over to digital kiosks.

I think it's still part of the experience.

I'm going out to eat, likely spending on drinks and tips I wouldn't if I took it home, so I want someone to be bringing me the order while I sit.

This has nothing with minimum wage which is increasing to $20 for everyone in Seattle on January 1st and isn’t triggering a wave of fast food layoffs. This is just typical corporate cost cutting.

Why does fast food in particular have a higher minimum wage?

Its part of large package of additional protections and controls adopted as a means of addressing the way that the industry, specifically large fast food chains, have, particularly, via the franchise structure, systemically evaded and been unresponsive to preexisting accountability measures for labor and worker-safety rules (which particularly came to a head during the COVID-19 pandemic).

The specific law is actually a government-industry-labor compromise passed this year that replaces the more expansive set that was initially adopted last year and challenged by the industry.

The quality of Pizza Hut has been going downhill for years. Support your local pizza joint

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