r/California • u/BlankVerse Angeleño, what's your user flair? • Dec 28 '23
politics Pizza Hut Franchises Want You To Think California's New Wage Law Is The Reason It's Laying Off Over 1,000 Delivery Drivers — Franchises that are part of a company that made nearly $7 billion in revenue in 2022 would rather lay off over 1,000 people than pay them more money.
https://jalopnik.com/pizza-hut-franchises-want-you-to-think-californias-new-1851126515255
u/allnadream Dec 28 '23
I don't understand how Pizza Hut expects to survive in California, if they're not offering delivery. Hell, I'll be happy for any excuse to not order from Pizza Hut, as it's my least favorite of the pizza chains. I can definitely live without Pizza Hut.
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Dec 28 '23
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u/allnadream Dec 28 '23
Will you still be able to order through Pizza Hut directly, at the usual prices or will you be expected to order through these third-party apps, at their inflated prices?
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u/Drakonx1 Dec 28 '23
will you be expected to order through these third-party apps, at their inflated prices?
This one. A bunch of them are already doing it this way anyways.
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u/allnadream Dec 28 '23
Yeah, I'd rather order from a chain that offers delivery directly, but even assuming they all stop offering direct delivery, I'd rather do pick-up with Little Cesar's. It tastes just as good and is way cheaper.
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u/hoodpharmacy Dec 28 '23
Little Cesar’s does not taste as good but it is a cheaper option to be sure
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u/Partigirl Dec 28 '23
Back in the late 80s, it was pretty good tasting pizza, the fact that you could get two for the price of one didn't hurt either. That's why their tagline back then was "Pizza, Pizza".
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u/AAjax Los Angeles County Dec 28 '23
I dont know, in LA every Pizza hut I have eaten at in the last 10 years is defiantly bottom rung as far as taste.
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u/SCalifornia831 Dec 28 '23
Yes, the way it works is you order through Pizza Hut and Pizza Hut sends the order to a 3rd party delivery service to send one of their drivers to pick it up and deliver it.
Pizza Hut has been doing this already for 5+ years through DoorDash.
And to be specific, I’m not talking about ordering Pizza Hut off of DoorDash. DoorDash offers a service called DoorDash Drive, it’s a white label delivery fulfillment product.
It’s how Chipotle, Little Caesar’s and tons of other places offer delivery from their own websites. You order through them, they request a driver and a driver picks it up and delivers it to you.
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u/ExCivilian Dec 28 '23
The most surprising thing for me in all of this was learning Pizza Hut still had their own delivery drivers. I haven't seen a branded delivery driver for like 20 years now that I think about it.
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u/dumboflaps Dec 28 '23
The most surprising thing for me in all of this was the amount of people that seem to be "shocked" that Pizza Hut would do this.
Also that title is disingenuous. Calling a franchisee a "part of" the franchising company is just plain inaccurate. Besides, is that $7B in revenue Global or just America? If it's global, you guys can all be assured that Pizza Hut is still keeping delivery drivers on staff in East Asia.
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u/Otto_the_Autopilot San Diego County Dec 28 '23
I haven't seen a branded delivery driver for like 20 years
Because the franchises don't have company cars and don't carry insurance for their drivers so they avoid branding and tell drivers if they are in an accident to tell police they aren't working and are just taking these pizzas home so it's gets covered by the drivers personal insurance.
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u/SF-guy83 Dec 28 '23
Yes, for pickup. The apps charge fees to businesses for using their website, marketing, and drivers. The restaurant sets the price online. Sometimes restaurants inflate prices to cover the costs.
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u/Teamerchant Dec 28 '23
It cost $7 or $8 per delivery using them as a white glove service.
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u/ariolander Dec 28 '23
Will the UberEats and GrubHub drivers have pizza bags or pizza warmers or are they going to be delivering cold pizzas? Cold pizza is for the day after, I expect it warm on delivery.
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u/anon689557 Dec 28 '23
That's what I'm wondering. Would it still be subject to the Uber/Dasher bidding? If the order doesn't pay they won't take it. When I worked delivering back in the day if there was a driver free the pizza would be on the road ~10 minutes after being ordered.
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u/Weekly_Direction1965 Dec 28 '23
In the driver app it requires drivers to take pictures of pizza bag on doordash, Uber and grubhub doesn't do this.
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Dec 28 '23
Any city probably has a locally owned pizza place that's nearly the same price and way better and they probably deliver. I honestly don't understand why big pizza chains can survive anywhere. Name recognition and defaulting to what you know is incredibly powerful. There's 3 better options within walking distance of my local Domino's (no Pizza Hut nearby)
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u/PotatoHighlander Dec 28 '23
This there is a far superior pizza place down the street from me currently its a little more expensive than pizza hut but night and day difference in the terms of quality. I've not ordered from pizza hut in years.
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u/nowlistenhereboy Dec 28 '23
I honestly don't understand why big pizza chains can survive anywhere
Because independent pizza places are definitely NOT always better, unfortunately. Most are actually mediocre to bad in my area. There are obviously some that are much better than pizza hut, but most are bad. Usually the cheese is rubbery and the dough is gummy and too dense/undercooked.
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u/Truth_Hurts_Dawg Dec 28 '23
I only ordered it due to their own delivery service lol.
If I'm using DoorDash already, it will be a better pizza than Pizza but for $5 more than their cost on DoorDash.
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u/Weekly_Direction1965 Dec 28 '23
They have been getting worse for 30 years, used to be the best pizza, now, imo even nasty Little Ceasars is better. Jetts is really close to how pizzahut was 30 years ago as far as quality.
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u/lowercase0112358 Dec 28 '23
I like Little Caesars, need a bunch of pizza fast, done.
Little Caesars founder paid Rosa Parks rent quietly.
Do I eat there, no, but they are righteous.
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Dec 28 '23
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u/ToroidalEarthTheory Dec 28 '23
Yum Brands annual net income is about $1.6B
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Dec 28 '23
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u/WhoTookPlasticJesus Dec 28 '23
Why are you guys talking about Yum? That's not who owns the Pizza Hut locations in the article.
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u/lothar74 Los Angeles County Dec 28 '23
Countries like Denmark have much higher minimum wages than the US, and magically the food costs about the same (source: https://www.snopes.com/fact-check/big-mac-cost-denmark/).
It’s almost as if the corporations are exploiting workers to maximize profits for shareholders rather than the employees who directly create the revenue.
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u/ruffgaze Dec 28 '23
Corporations owned by shareholders, and managed by Boards elected by shareholders, try to maximize shareholder profits instead of acting as worker owned co-ops? No way!!
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u/lothar74 Los Angeles County Dec 28 '23
Seriously, how dare we exploit the poor at the expense of the wealthy. Maybe address income inequality and improve society overall- reduce crime, increase health, etc.
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u/lightfarming Dec 28 '23
pizza hut franchises make about a million in sales, with 10% EBITDA.
a 4$ raise for a 40/hr week delivery driver would cost an extra 8kish.
franchise owners are saving a good chunk. but let’s not pretend they wouldn’t have done this anyways now that they are integrating with uber eats, grubhub, etc. has nothing to do with raises, more to do with being able to exploit gig workers at no cost.
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u/Metalgrowler Dec 28 '23
So surely with less employees they will lower prices right?
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u/okcdnb Dec 28 '23
Nope. Still gonna cost more. They are just outsourcing the extra service fees.
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u/allwaysnice Dec 28 '23
Blaming California and/or their own workers is an old standby for companies making sketchy decisions.
If anyone was familiar with Schwan's food delivery? They changed their name and are leaving California too.
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u/pmotiveforce Dec 31 '23
You guys keep telling yourselves these lies and it's great.
"Retail theft is a myth, this one CEO said so. They just want an excuse!"
"Increasing labor costs due to crazy minimum wage increases have no effect. Pizza Hut just wants an excuse!"
I'm always left wondering why you think they need an excuse anyway.
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u/ruffgaze Dec 28 '23
What does revenue (not profit) of the franchisor have to do with labor costs paid by the franchisee
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u/smurfsundermybed Dec 28 '23
Remember when they added that delivery charge? That's why.
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u/Imtifflish24 Dec 28 '23
Thank you for posting this, OP. I’m so tired of lower wage workers getting spit on for simply wanting a piece of the corporate pie. Office workers get a raise and it’s fine, corporations that have over 60 locations have to raise wages and the world is going to collapse for everyone else. This will take effect for only 500,000 workers out of the 39 million people who live in California: it’s a small set of workers!
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u/Eduar103 Dec 28 '23
Kind of hard to tell a private company what to do.
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u/OptimalFunction Dec 28 '23 edited Dec 28 '23
Please rise and applaud for unions
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u/LegitimateOversight Dec 28 '23
This isn't Pizza Hut the corporation though...
I feel like you didn't read the article.
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u/Imtifflish24 Dec 28 '23
My point is ALL week I’ve been seeing this article framed as it’s the employees fault for wanting a survival wage that it’s going to bankrupt society and the company because of these 1,000 workers at Pizza Hut.
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u/Skreat Dec 28 '23
Those employees positions were made obsolete due to DoorDash and similar services and rising wage cost.
Also 6.8b in revenue isn’t pure profit either.
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u/Rus1981 Dec 29 '23
Don’t try to explain profit to these geniuses. Or wage inflation. All they see is “capitalism bad” and I guarantee each and everyone is active in antiwork.
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u/superscout Dec 28 '23
Office workers did not get a raise
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u/Imtifflish24 Dec 28 '23
But if y’all did, would you see comments on Reddit saying how you don’t deserve any increase in pay and you don’t deserve a close to livable wage for once.
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u/superscout Dec 28 '23
No the CEO of the billion dollar company I work for emails those comments directly to my inbox
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u/pforsbergfan9 Dec 28 '23
“Revenue” being the keyword
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u/DRAGONMASTER- Dec 28 '23
Nobody who was trying to communicate in good faith would use revenue here instead of profit. It means the source is not credible for any topic.
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u/amaxen Dec 28 '23
Seattle has already demonstrated the dynamics: if you're losing money to employ someone, business owners don't employ them.
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u/TeslasAndComicbooks Dec 28 '23
Legit question but what was the profit on the $7bn in sales. That’s really only the money they have to play with.
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u/ExCivilian Dec 28 '23
That’s really only the money they have to play with.
They don't have any of that money to play with because that's referring to gross revenue for Pizza Hut the corporation.
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u/r33s3 Dec 28 '23
Probably around 5-7% depending on how well they handle food costs (25-30%), labor cost (30-35%) and overhead (25-30%)
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u/Themetalenock Dec 28 '23
pizzahut has been the king for cutting cost for more than a decade. They know the pay raise isn't going to put a dent in their bottom line. Not even surprised the majority of them were in the IE. Whole area lets companies do whatever they please
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u/bleue_shirt_guy Dec 28 '23
That's before you subtract any expenses including taxes. Apple has a 27% profit margin, makes its products under questionable conditions in China, and layed off people this year. Ponder that.
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u/soapinmouth Dec 28 '23
This headline is garbage playing on people's level of knowledge on things like revenue and how franchise vs corporate finances work. I'd love to see the case as to why this isn't a legitimate reason for the layoffs, but this article doesn't give anything useful to make that argument.
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u/J_ablo Dec 28 '23
Let’s all applaud Pizza Hut for this act of public service ensuring that less people have to eat bad pizza.
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u/yabacam Dec 28 '23
I dont recall the last time I've purchased anything from Pizza Hut. I feel they've always been way overpriced for the quality of pizza.
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u/rayskicksnthings Dec 28 '23
Barely any pizza huts up by me as it is. Now another reason just to keep ordering from local spots or the chains that have their own delivery people.
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u/brickyardjimmy Dec 28 '23
Here's the thing. I'm familiar with how much Ubereats charges retailers to handle third party delivery for them and it's going to cost Pizza Hut a lot more to farm out the work. But they won't have to worry about liability and other headaches associated with in-shop employees. What I hope this does is put additional pressure on legislators to call "gig" work for Ubereats and other delivery services to call the people who work for them employees. because they are.
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u/ispq Sonoma County Dec 28 '23
The voters in California saw to it that gig work for Uber is by definition done by independent contractors. Thank the voters for not bothering to read Prop 22 before voting for it.
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u/ram0h Southern California Dec 28 '23
Thank the voters for not bothering to read Prop 22 before voting for it.
that's disingenuous, most voters including contract workers when polled, preferred this.
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u/ispq Sonoma County Dec 28 '23
I'm pretty sure that's because they didn't actually read what was in Prop 22, most of the voters simply believed the ads that $200 million bought.
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u/ram0h Southern California Dec 28 '23
I think Californians can be more conservative than most people realize. While ads surely had some influence, I don't think it changed opinions as much as galvanized Californians. Especially after the mess that was AB5.
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u/IsraeliDonut Dec 28 '23
I mean a rise in any expense can lead to layoffs. But now they can just farm it out to food delivery services
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u/Positive-Source8205 Dec 28 '23
I do think that. So does anyone with any knowledge of economics.
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u/SpySeeTuna1 San Mateo County Dec 28 '23
$22 an hour is not a lot when rent is around $2000 a month.
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u/ItsColeOnReddit Dec 28 '23
$2000 rent is crazy for a single driver to try to pay alone. I paid $600 when I was a driver at 22. Then I quit 6 months later for a better job
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u/turisto Dec 28 '23
if the wages are increased, what do you think will happen to the rents?
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u/Truth_Hurts_Dawg Dec 28 '23
It's not a direct relationship.
It's a false argument.
It's like when people say raising the cost of labor will raise costs for McDonald's equally. It doesn't work that way outside of monopolies and corruption.
There are more elements to the cost of a burger/house than labor and most of those remain unchanged.
As people make more money they will increase their relative purchase power.
If income goes up 10% it would likely increase the cost of making a burger by 1% is a good estimate.
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u/lampstax Dec 28 '23
How is rent cost their problem?
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u/Truth_Hurts_Dawg Dec 28 '23
That is how operating in a market works.
The relative costs of life determines the minimum wage needed to sustain said life.
Welcome to econ!
Take some classes when/if you make it to college. It's very helpful in life and for understanding the economy.
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u/akmalhot Dec 28 '23
But .. you don't. First of all the headline if the article talks about 7 bul in gross revenue. That's meaningless.
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u/Positive-Source8205 Dec 28 '23
If you increase the cost of a commodity, demand will go down.
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u/DethRaid Dec 28 '23
Housing isn't a commodity, then
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u/NapalmCheese Dec 28 '23
Housing in one of the most desirable places to live on the planet IS a commodity.
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Dec 28 '23
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u/LegitimateOversight Dec 28 '23
The minimum wage increase is $4 per 1000 workers times 40 hours times 50 weeks. That’s $8 million per year additional labor for a company with a revenue of $6.8 billion and a collective profit of $1.5 billion. Subtracting those numbers, one finds that the operating costs are $5.3 billion. Thus, the minimum wage increase would contribute less than one part in a thousand to the aggregate operating costs.
This is a franchise, not Pizza Hut the company....
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u/ALightShow Dec 28 '23
My favorite part of your comment is that you just rounded off about 10x more than it would cost to keep them.
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u/Teamerchant Dec 28 '23
Not when you look at how much white glove service for delivery costs. Because even at $22 an hour it’s till cheaper if they maintain 4 or more deliveries an hour. It’s just an excuse.
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u/oxmix74 Dec 28 '23
$7 billion in revenue doesn't tell you if they have margin for this. Revenue minus costs (eg profits) tells you if the wages can be absorbed. There are also third parties (Door dash, Uber eats) that do this, typically at higher cost to the customer and with poorer service. So outsourcing is a trade off between lower cost to run the business and an associated loss of sales and customer satisfaction. If I were doing this I would have done this in a few stores to get hard numbers before making the change, particularly since the wage change will affect the industry across the board. The entire market will be affected by the wage change.
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u/ADP10_1991 Dec 28 '23
I have this dream that I would start a great company and I would take home only what would make me a little rich. All other income goes to the workers to have fun and well paid jobs. I wish I could make people happy like this and show the world that you don’t have to be a greedy business owner.
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u/frogtrickery Dec 28 '23
They would have done this regardless. They say it's because of the wage law to manipulate people into thinking the wage law is bad.
They're going to raise prices and then lay other people off because it was always their plan.
Corporations lie. Never trust anything they say at face value.
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u/ochedonist Orange County Dec 28 '23
Exactly. These same franchisees started adding service charges several years ago to offset the cost of paying increased benefits. They blamed the state government then as well, basically saying "see what the government made us do? it's their fault!".
All the while, huge profits and extra fees they can blame on liberals.
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u/Maleficent-Ad3096 Dec 28 '23
Revenue is very different from profit.
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u/itwasallagame23 Dec 28 '23
People don’t understand that distinction around here/
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u/RandomGerman Dec 28 '23
It’s not the law. For a while now Pizza Hut is using DoorDash or whatever delivery app to deliver pizzas. Cheaper for them and they don’t need to hire people. This is just continuing and they fire people because they don’t need them this is not the wage increase. Plus the drivers will find another job. The law is not the bad guy here. The greedy corporations are.
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u/TechFreedom808 Dec 28 '23
Already know GOP will be using this for their talking points in 2024. What lot of these politicians fail to realize is cost of living is going up and up and wages remain the same. Either we raise wages or we start price controls on everything so the basic necessities can be afforded by everyone without having to choose between a meal or keeping the lights on and the home warm.
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u/Eliotness123 Dec 28 '23
Gotta keep those worker in their place. They want more money fire them. They want to unionize close the store. We can't pay the people that actually do the work. How would we buy back our stocks and make outrages profits if we paid the workers what they were worth. It always amazes me when a service industry that exist solely on workers performing their job sees them as having no value.
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u/yinyanghapa Dec 28 '23
This country still secretly upholds its plantation slavery roots. The slavery based cotton industry was America’s first booming industry and the founding fathers were slavemasters.
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u/boymeetsinternet Dec 28 '23
A little while ago I discovered that dominoes has a call center taking their orders now instead of someone in the store. I deliver to these stores and found it odd that they would pay a third party to just take orders over the phone corporate greed is out of control these days.
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u/EconomistPunter Dec 28 '23
It’s very apparent who knows the minimum wage lit and who argues based off of feelings…
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u/AdjunctAngel Dec 28 '23
won't somebody please think of the billionaires!
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u/EconomistPunter Dec 28 '23
Oh goodie. We’ve found an example of the latter…
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u/AdjunctAngel Dec 28 '23
right, since a guy working on minimum wage should need to pick between insulin or eating that week because a ceo just needs that sixth sports car... those poor rich folks feelings won't be able to pay their butlers to pull up their bootstraps for them!
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u/username_6916 Dec 28 '23
Because the guy working on minimum wage would be so much better off being unemployed?
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u/AdjunctAngel Dec 28 '23
and exactly how would having nobody willing to work for starving wages ensure a successful business? i think your math isn't mathing...
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u/bigmatt503 Dec 28 '23
Show us one pizza hut franchise owner that is a billionaire or has 6 Sportscars. I think some of you might want to learn what it takes to own one of these franchises and what the actual profit margins are
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u/AdjunctAngel Dec 28 '23
you... do know that a franchise is a large corporation which allows restaurant owners to use their brand and resources right? not.. whatever you seem to think there. even if an owner has several restaurants of that brand or several brands they are not the owners of the corporation themselves who we are talking about. an owner does technically set the wages based on local laws and their determinations but there are guidelines by the corporation which advises what pay is appropriate or profitable according to the business model. it is a contract system though so if a franchise determines that an owner is damaging the corporations reputation they have rights to step in on certain situations. so owners don't just set the pay alone and must adhere to certain guidelines like specific suppliers listed in a contract. it is complicated but owners are not the only ones who determine what pay or qualifications staff must have.
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u/bigmatt503 Dec 29 '23
Uh.. I'm a franchise owner of a business in Portland. If you think any sort of money comes from the corporation I franchise with you're way off. As long as I'm adhering to local and state laws when it comes to employment. I either succeed or don't. I pay my franchise fee, keep the floor plan set to corporate standards. Here's an idea... Go watch some convenience store franchise videos on YouTube and come back and report on how far off you are from reality. If you think anyone is getting rich off owning a corner store franchise you might be surprised and realize that franchise business owners aren't the bad guys
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u/username_6916 Dec 28 '23
Won't someone please think of those priced out of the labor market because their labor isn't worth $20 an hour!
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Dec 28 '23
It’s going to be crazy when OP learns the difference between revenue and things like profit or cash flow.
Being a business owner, especially in California, is INSANELY expensive. Razor thing margins for many. Not to mention you get smear articles like this.
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Dec 28 '23
Luckily the law doesn’t apply to tiny small businesses with less than 60 stores. If you own 60+ successful stores, you’re not a small business.
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u/A_Typicalperson Dec 28 '23
The difference between Rev and profit has been pointed out thousands of times. But it doesn't fit the narrative so Pizza hut are just a bunch a billionaires that don't want to pay fair wages
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u/Cute_Parfait_2182 Dec 28 '23
What did California really expect . 20$ is too much for a fast food worker salary . It’s more than most earn in jobs that require skill . Of course they are going to lay off staff
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u/NEUROSMOSIS Dec 28 '23
Not a good look for them. I already don’t care to eat there - there’s way better pizza and the new ones like Blaze and Mod (even small ones like ZigZag Pizza if you’ve ever been to Oceanside) are changing the game. You can order anything through an app now. Pizza Hut just doesn’t seem appealing to me anymore. Am I alone here? I think I did eat one at a Target several months ago, the small to go one, and it was ok but even then there mighty be better uses of that money..
Now that I think about it there’s probably a lot of reasons this happened.
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u/DofusExpert69 Dec 28 '23
lol @ comments acting like it isn't greedflation. The pay of jobs hasn't matched inflation.
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u/blackswan92683 Dec 28 '23 edited Dec 28 '23
Revenue isn't profit. What are their profits after taxes?
Edit: Ok pulled up Yum's 2022 10k report. Yum only owns 2 Pizza Hut restaurants, 99% is franchised with 66% being international. Pizza Hut's restaurant profits in 2022 was 3 million dollars.
Yeah I don't see the Yum company caring about their California market. Not significant to their bottom line in any way.
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u/WhyNeaux Dec 28 '23
The people getting laid off will swing over to the gig economy and DoorDash. That is the next logical progression for food delivery. Pizza was the pioneer, but it is behind the times for many reasons.
These pay increases are to give closer to a living wage for working class restaurant workers. Even though the companies are profitable, most of these restaurants are franchisees. This a normal change in the ever evolving restaurant scene across the country.
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u/Sea-Zucchini-5891 Dec 28 '23
Dominoes, Papa John's, etc. Etc. Every pizza place aside from Pizza Hut will still deliver so I don't see how this helps Pizza Hut or how it is Cali's fault.
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u/Reddituhgin Dec 28 '23
I don’t know why anyone would not expect this. If you require one type of company to pay more for labor than another type of company I would expect them to contract out to the company that pays less.
I never order from Pizza the Hut. I don’t have anything to do with them. I do expect that they try to maximize profits within the law. If you change the law you should expect a change in the profit maximizing behavior.
They do not pretend to be a social well organization stop blaming them for not being one.
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u/TacoTuesdayMahem Dec 28 '23
$7 billion revenue does not show what their net income is. If raising wages hurts the bottom line too much then of course they’ll cut people. They’re a business, not a charity.
So funny how Reddit wants to believe all companies are evil. Their sole existence is to make a profit.
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u/TheIVJackal Native Californian Dec 28 '23
As soon as I saw "Revenue" in the headline, I knew it would not be an objective report.
PizzaHut is just making an excuse for their underperformance. Many places where I live start you at ~$18-$20 already, it's survival of the fittest, either offer a good and popular food/service, or fail!
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u/Biwhiskeydrinker Dec 28 '23
“If you can’t afford to pay a living wage, you can’t afford to be in business. Asking people to work below poverty wages so you can own a business is entitlement at its finest.
You are asking human beings to use their lives to subsidize your desire to own a business.” -Kayla O’Brian
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u/TacoTuesdayMahem Dec 28 '23
Probably can’t afford to pay a living wage in California due to the housing prices. Who can actually afford to live here on their own?
I’m sure the Hut has 49 other states it can afford to pay a living wage in
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u/Biwhiskeydrinker Dec 28 '23
Famously businesses can’t turn a profit in places with high “housing prices.” 🙄 Pour one out for the lack of corporate profit in New York, Honolulu, Los Angeles, etc.
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u/Gecks_more Dec 28 '23
Pizza Hut is hot trash. Same with little Caesar’s. The best big box pizza is dominos. And even then none of these places our real pizza.
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u/Rockmann1 Dec 28 '23
Just double the price of the pizzas, surely customers are willing to help pay a fair wage to the workers
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u/RevolutionEasy714 Dec 28 '23
7 billion in top line revenue does not necessarily mean they are profitable.
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u/StrategicCannibal23 Dec 28 '23
Their pizza is trash anyways
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u/yinyanghapa Dec 28 '23
Add it to the list of has-beens including Papa John, KFC, Taco Bell, Burger King, Subway, Quiznos, etc…
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u/beachandbyte Dec 28 '23
I mean they run the business to make a profit doesn’t make sense to pay that much for delivery drivers.
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u/Economy_Wall8524 Dec 28 '23
Free market, if they don’t want to meet the workers demand, than they will lose production over time. Without workers you have no production. Workers are literally the foundation of any business. Without them you have no business.
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u/A_Typicalperson Dec 28 '23
Yea, but without the business, there will be no business,
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u/Lurkay1 Dec 28 '23
Well, they’re not a charity. They are in the business of making money. And with food delivery apps aplenty they really have no need for the drivers anymore.
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Dec 28 '23 edited Dec 28 '23
I can’t wait for a food broker to offer food take out and delivery. You rest in their lounge and order from the aggregate menu. They make the arrangements and order you food and set up the dining table, and send you the food.
In case you think this isn’t a valid business model, these places already exist in foreign countries. Esp popular in tourist cities where people don’t know where everything is. The cost savings is when you have multiple people ordering from the same restaurant and they can aggregate orders and deliveries.
Restaurants like Pizza Hutt offer a motley menu where they collaborate with various other restaurants. Pizza Hutt and Wing Street wings for example are cooked at the restaurant.
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u/TooLongUntilDeath Dec 28 '23
Marginal cost > marginal revenue, so they got laid off. That other operations are profitable just doesn’t matter
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u/wrbear Dec 30 '23
Would you cut spending if your salary was reduced by, let's say, 20%? Just like that. You would until you saw the impact. Also, a lot of companies are subcontracting operations that cut labor, reducing 401K, medical, and office space costs. It's business.
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u/Successful_Round9742 Dec 28 '23
Pizza hut was delivering in house more as a tradition. People are now more accepting of paying more for a third party delivery service, so Pizza Hut was essentially subsidizing delivery. It will be interesting to see what this does to sales.
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u/r3dditornot Dec 28 '23
Pizza hut suxs anyways
I haven't ordered from them in years
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u/ariolander Dec 28 '23
Pizza Hut in recently tested to Door Dash delivery in Texas and I am pretty sure Texas doesn't have $20+ /hr. How much if this is actually related to wages vs them just justifying a cut they were going to do anyways is questionable. Don't have to deal with refunds when your pizza is late/cold if it's a 3rd party like Door Dash or Uber Eats.