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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.
Technically it’s mega franchisees like Provender Capital Group’s “PacSun Pizza,” not PizzaHut that is going to be pocketing the cash from this move.
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.
I agree. It might make financial sense for them as far as reducing payroll and management costs, but it seems just as likely to reduce their sales by as much as that saves. To me it feels like a political statement "how dare you expect us to pay employees!" where they pretend it's not possible for them to make it work. Which is fine. If a business depends on paying subsistence slave wages, it should just close.
I've only ordered from the big ones to avoid fucky delivery services. It just eliminates the point of it.
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.
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.
F*ck the people who empower gig economy. Fuck Uber eats, door dash and everything similar.
They only exist because people use them.
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.
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
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.
Pizza hut is trash anyways, unless you live in the middle of nowhere, you've probably got a better local pizza place. Please support them instead of a chain.
FYI: They're part of Yum! Brands : KFC Pizza Hut Taco Bell Banh Shop (minority investor) The Habit Burger Grill
I will continue to boycott their "foods".
I'm not in California, but if Pizza Hut thinks I'm ever going to go out of my way to get one of their shitty pizzas, they're very wrong. There are plenty of other places that deliver.
I go out of my way to avoid them already. They changed their sauce or something like 10 years ago and it tasted awful.
Is no one else going to blame an overly specific minimum wage? I couldn’t find anything too specific but in California, it looks like:
Of course they’re going to outsource drivers, This looks like a nice Christmas gift to UberEats/DoirDash
Customer still pays the raised wage price, but a new company gets injected as a middle man. That’s the true American dream. Same income for the business, but another layer of corporations cleans up instead of the people actually making the work happen.
They should create incentive by taxing the shit out of businesses and offering tax breaks for actually offering living wages and benefits to their employees. If the “correct” answer in capitalism is to find the cheapest solution, make it expensive to make choices that are a detriment to the community the business operates in.
Didn't Pizza Hut use to be a high quality sit-down restaurant that didn't even do delivery and had a big salad bar? At least, that's how I remembered it, because I don't think I've thought about Pizza Hut in years.
Also, it is worth noting that these are companies that franchises Pizza Hut, not Pizza Hut owner Yum Brands. This is more of a case of companies being horrible in general instead of a large company being horrible.
The 20 dollar minimum wage is however well deserved, and probably should be higher considering the cost of living here in California.
I'm from NJ and a few months back I went to our local Pizza Hut with my mom since it had been years since we'd been there. Its on the corner of two major roads (one is literally called Main Road) and in a shopping center.
We pulled up and there was one car there and the entire place looked dark, we weren't sure that they were even open, even though it was like 4:30 PM. We walked in and it was a ghost town, an employee finally appeared and we asked if they were open and she said they were. For like the 30-45 minutes that we were there we were the only people there, even for pick-up.
A few months ago I was suddenly craving a pan pizza... out of nowhere. In the 80's, Pizza Hut pan pizza was the shit. I was pining for the nostalgia, I suppose.
The pizza was got was awful. Truly horrible. Pizza Hut is dead to me.
Anyone remember reading that pizza had the highest profit margins in the restaurant industry?
And the price has? Tripled? Quadrupled?
And the ingredients are worse? And you get less?
I wouldn't consider buying pizza without 3 or more coupons going to the same transaction.
Damn for a company that's been shutting down locations I'd think it be cheaper to pay their employees better than lose all those customers. My state alone has seen them shut down nearly every location.
We repurchased 10 million shares totaling $1.2 billion at an average price per share of $119.
They are just greedy. They have the money, but giving the money to the rich is evidently more important.
The C-level staff are just going to use this to justify bonuses in the face of poor quality and faltering sales. They never pass up a scape goat. Bastards.
Customers at the affected Pizza Hut locations must use third-party apps like GrubHub, DoorDash and Uber Eats for deliveries.
Eww, no. Fuck that. Not that I would order Pizza Hut anyways, but I'll never touch any of those services.
Not to be too cynical, but like is Uber going to be delivering Pizza Hut? Are there 'gig economy' laws in place in California? How's that going to work? Are workers going to be forced into an even less regulated labour market?
If you order from pizza Hut here it's delivered by door dash. It sucks, takes forever, is usually cold when it arrives, and the pizza's not even good. Not sure if it's just this franchise or regional. Stopped getting pizza Hut altogether.
absolutely the worst pizza chain that exists. i do not understand how people can stomach all that grease
This doesn't change the policy and the benefits it will bring in the long run.
It's crap for the delivery drivers though. But longer term isn't forever and at somepoint that wage increase will directly benefit them as well.
makes sense. I've noticed since covid a lot of places use Doordash drivers instead of delivery drivers now. It's cheaper and the extra cost goes to the customer
Good, their pizza is shit anyway.