Delivery methods changing as restaurants navigate labor costs
In North Beach, local restaurant owner Jose Franco faced a pivotal decision in 2020, shifting his delivery services from in-house workers to third-party apps.
"We changed the delivery service from the delivery workers to third-party apps... why? Because of the labor! It got so expensive! It got to 17, 18 and now it's going up next year," Franco said.
He's not alone in this shift, as even industry giants like Pizza Hut are adapting in anticipation of a minimum wage increase for fast food workers to $20 next year. Multiple Pizza Hut franchise operators in California are planning to lay off more than 1000 delivery workers in February. This decision, he claims, was essential to saving his business, Caffe Sport, which had been significantly impacted by the pandemic.
"It would be nice to have the old school delivery guy that people know, but now everything is going up... this economy is going up and down, so we have to save money," he said.
However, not all businesses are following this trend. Mountain Mike's Pizza in Concord is among those choosing to retain their delivery workers, at least for now.
"With the $20 going up in April, currently, we're not gonna let go of our drivers. We're gonna keep the same staff, however, it's gonna get more expensive for customers because if the minimum wage is going up, everything goes up," said owner Guryet Mann.
"We've talked about it in our group, and we'll see how it will go. It kind of makes sense to use DoorDash and Uber Eats at certain times of the day, like in the morning when pizzas aren't really delivered. So, we're gonna have to pay a huge minimum wage to keep that driver on the clock... if I have a third-party delivery service, it would be cheaper for me," Mann explained.
Franco echoed a similar sentiment, stating that utilizing third-party services is currently the most practical approach.
"That's what helps not raise the price for the customers," he emphasized.
As businesses navigate the changing landscape of delivery services, the delicate balance between cost-cutting and maintaining quality services remains a significant challenge.