Posted on 06/26/2024 10:50:19 AM PDT by SeekAndFind
Drivers are not helped by wage mandates is Seattle and New York. And customers complain higher prices and cold food.
It’s a perfect trifecta of complaints.
Neither drivers nor customers are happy with misguided politicians attempting to help driver get better pay.
It’s losses all around as Delivery Drivers Got Higher Wages. Now They’re Getting Fewer Orders.
The delivery companies—whose businesses are built on gig workers they don’t employ full- time—say they can only afford to pay so many workers under the two cities’ latest pay standards. The cities want the companies to pay couriers a minimum hourly wage based on the time they spend delivering orders and reward the most efficient workers. New York City now requires that the companies pay couriers at least $19.56 per hour before tips, up from an average of $5.39 per hour before its rules went into effect in December.
Uber Eats’ UBER orders in Seattle fell 45% last quarter from the same period a year earlier after the company imposed a $4.99 fee on each order to cover the city’s new pay requirements. Demand also cooled in New York City, Uber and DoorDash DASH.
Consumers already pay the apps a service fee and delivery fee, in addition to tipping workers. For some, the latest app fees were the last straw.
Seattle-based researcher Ro Singh was hooked on ordering in several times a week until the city adopted its pay measure in January. App prices “became absolutely nuts,” he said, after adding varying delivery fees in addition to tipping. He started picking up the food himself.
“It’s like double the price to order a $20 burrito now” compared with the pickup price, he said. “This is insane.”
Uber Chief Executive Dara Khosrowshahi said the company has had to cut 25% of the delivery drivers who previously worked for the app in New York City. “So far, regulation has definitely hurt the people that it’s supposed to protect,” Khosrowshahi said last month on a call with analysts.
Shuai Zhang, the owner of Poprice, an Asian street-food restaurant in New York City, says his delivery sales are a third of what they were before the changes. Drivers who once picked up from his restaurant are now asking him for jobs. He hired two of them.
Fewer workers delivering for the apps means it takes longer to pick up orders. Customers are complaining about deliveries arriving cold and soggy, Zhang said. To make up for lost sales, he has started working as a restaurant consultant.
Seattle driver Gary Lardizabal said he makes less money now despite working more hours. Breakfast and afternoon-snack delivery orders have disappeared. Smaller deliveries don’t make sense because of the new $4.99 fee, he said.
Drivers because they are making less money
Restaurants because they are losing business
Customers because of slower deliveries, cold food, and higher prices
The city loses too. Seattle collects a sales tax of 3.85 percent.
New York City says the plan is working. The only thing I can come up with is reduced traffic.
Seattle City Council President Sara Nelson is pushing to reverse the new earnings standard after complaints from drivers, restaurants and consumers, though she wants to ensure that workers still make the city’s minimum hourly wage before tips.
What a hoot.
Not having learned anything from this, Nelson still wants to mandate minimum wages. I wonder what miserable failure she will concoct next.
Meanwhile, please note A $5 Meal Deal at McDonalds, Price Wars Also at Starbucks, Walmart, Target
Still more signs of consumer exhaustion are evident in tactics by McDonalds, Starbucks, and other chains’ attempts to woo back customers who said no more to rising prices.
In case you missed it, please see my June 20 post, Breadsticks at Olive Garden Highlight Financial Strain on America’s Middle Class
Traffic at Olive Garden is up 3.9 percent but but same store sales are down 1.5 percent. Are people filling up on unlimited breadsticks? Drinking less wine?
Repeating comments I made in the McDonalds post, all of the articles in this post have one thing in common. They are all about discretionary spending.
Consumers are tapped out and that is the first, if not only thing consumers can cut back on.
obama tried once.
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One was health insurance the other is lunch but both no business of government to control.
If it isn’t real then they should end letting people post fake tips, paying in advance isn’t a tip anyway, it is telling someone what you will pay them to deliver your package to you, like the USPS or Fed-Ex.
Exactly. But hear me out....
The pre-tip feature is a way for customers to induce drivers to accept that order for pickup. Let's say someone is craving chips and guacamole from Chipotle, and it is a 20 minute drive, 8 miles. Now the driving fee is solely distance based, and the suggested tip on a $5 order may be 1$. So the total amount a driver would normally be offered for this order might be calculated at $4.00. And no driver is really going to want to accept that order.
So, the customer has an opportunity to add an additional incentive up front by promising a $6 tip. The pickup is now for $10, and a driver may well accept that. What too often happens is that the driver accepts the offer expecting $10, but after the pickup, the customer has the ability to reduce the tip - supposed to be just for bad service but some customers abuse this - and zeros it out. So now, the pickup that was supposed to pay $10 now only pays $4, and the scummy customer is laughing because they pocketed the promised tip themselves.
That's a bad system. However, the customer having the chance to offer that "pre-tip" is a good idea because it essentially is freedom of contract. Suppose you've ordered $150 worth of food from a decent restaurant, and don't want it getting cold waiting for a driver to accept the order. So, you offer an extra $20 for the order to be picked up, which will happen very quickly once it gets posted for drivers. You get your food dast, driver may have made $40 total, and it's a win-win.
Alternatively, you could just not call it a "tip" anymore and make it irrevocable, but that would screw the drive in terms of taxes and also reward bad service. That's why simply posting the percentage of times a given customer (and yo don't know their nes or anything) paid the promised pre-tip would be a fair solution.
Well, a qualitative rating like that would be better than the quantitative rating by percentages that you first mentioned. I personally wouldn’t want delivery drivers rating me at all, but I have never used one of these food delivery outfits anyway (and don’t plan to), so it doesn’t matter. I don’t think they’d come out here in any case.
I understand it and have read about it a number of times, but to me it is a stupid system that very much fits into the constant mistakes and misdirection’s of the modern era, and some of our current population, a system that needed repair before it hit the market.
You did a very good job of explaining it though.
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