Another reason why I only tip waitstaff

[Racket_Man]

Because, the cost of paying the driver went up, and a lot of places decided that they would rather add the delivery fee and discourage people from ordering delivery (or at the very least recover some of the cost of having to pay the driver) rather than raising the cost of everything and potentially alienating their pick up customers.

actually Smiley most of the delivery places have LOWERED driver wages over the last 3 or 4 years (note that it was after the US minimum wage went up starting in 2007 and ending in 2009 at $7.25) to anywhere between $4 and $5.25 per hour. the only places that do pay minimum wage are in 7 US states that do not currently allow tip credit wages (and that will most likely change in the next couple of years) .

I know of VERY few delivery places that have actually raised their driver wages. all of the large corp chains pay their drivers sub-minimum wage now (see above) and most have actually FROZEN driver wages at that level. the driver is also given a small per run sum to "cover" the drivers expenses such as gas, repairs, maintenance, insurance, depreciation, wear and tear, etc (actually only really barely covers gas money).

The delivery charge is not to discourage people from having delivery it is a convient way to NOT raise prices on the stuff they sell as the price for the basic ingrediants rises over time. plus it may offset some of the costs assiciated with delivery such as a blanket non-owned vehicle insurance policy (which tend to be expensive these days. why I do not know).

[jackfaire]

The delivery charge is not to discourage people from having delivery it is a convient way to NOT raise prices on the stuff they sell as the price for the basic ingrediants rises over time. plus it may offset some of the costs assiciated with delivery such as a blanket non-owned vehicle insurance policy (which tend to be expensive these days. why I do not know).

See and that's not a good idea. Raising the prices people will notice once or twice and forget it but now people every time will think, "Man it's more expensive than it used to be"

Maybe that is why they called it the delivery charge because while in the small print it says that isn't for the driver they figured people would like it thinking that the driver was finally getting paid fairly.

[blas87]

I usually only order delivery from places that don't charge for delivery or if I'm drunk or if I'm already in my pajamas.

[jackfaire]

I usually only order delivery from places that don't charge for delivery or if I'm drunk or if I'm already in my pajamas.

Only my pizza place does it. Only have about three options for them though and I have a personal beef with the driver from one of the other places and the third I just don't think is very good.

[Racket_Man]

See and that's not a good idea. Raising the prices people will notice once or twice and forget it but now people every time will think, "Man it's more expensive than it used to be"

you would be surprised a how many people DO NOT notice a rise in their overall total. a year ago my company raised their delivery charge 25 cents (with no increase in our compensation) . people hardly noticed. and if trends continue the delivery charge will continue to rise as the price of basic ingrediants rise.

Maybe that is why they called it the delivery charge because while in the small print it says that isn't for the driver they figured people would like it thinking that the driver was finally getting paid fairly.

right in one!!!!!! most customers, if asked, would say "OH the Delivery DRIVER Charge goes straight to the driver" (note the inclusion of the word DRIVER where is does not exist) and some might even say "OH and it is a built in tip" (which it is NOT)

and the downside of this is we (as drivers) are not allowed to explain this to the customer UNLESS the customer mentions tips or the delivery charge FIRST. then the door is WIDE open.

the companies have deliberatly kept quiet about where the DC actually goes ie right to them not the driver.

[jackfaire]

you would be surprised a how many people DO NOT notice a rise in their overall total. a year ago my company raised their delivery charge 25 cents (with no increase in our compensation) . people hardly noticed. and if trends continue the delivery charge will continue to rise as the price of basic ingrediants rise.

That sucks. See me I not only noticed the charge but immediately asked my delivery person what it was to make sure whether or not it went to them. I used to order pizza at least once a month and usually got the same drivers. I built a relationship with them.

[brighteyedkitty]

I feel the need to chime in here.

I've worked at a pizza place for the past 14 years, and am now a GM. Honestly, I can understand all points of view regarding this issue, but I want to point out a few things:

Look at the cost of a pizza back in the 80s and 90s. I remember when a pizza place opened up here in town, must have been early 90's, and they were advertising a large 1 topping for $6.XX. Now look at today; you've got Little Sleazer's selling larges for $5, and granted the quality isn't the greatest, but when you've got 5 bucks in your pocket and need to feed your family, people just don't care. I've heard LC makes something like 20 cents per pizza, and that's not including the cost of delivery (I don't think ANY of them deliver anymore, anyway...)

Now, in my case, I work for a place that sells a much better product, but still...when I started working back in 1997, the special we had at the time was 2 medium 1 (IIRC) topping pizzas for $10.00. Right now, 14 years later, one of our specials is a medium 1 topping for $5.99. That's, what, a 16% increase in a decade and a half? I'm pretty sure that our food cost has increased more than 16% in that time.

Now, also keep in mind that in addition to paying mileage reimbursement to the drivers, there's also, the, say, 15 minutes we're paying out in hourly while they're on a run. Another expense that we wouldn't have if we didn't offer delivery. Pickups, you take the order, you make the order, you box the order, you toss it up on the warming shelf, and when the customer comes in you ring them up and give them their pizza. That's the extent of the labor involved. With a delivery, it's all of the above, except remove "ringing up the customer at the counter" and add "pay someone to drive the X amount of minutes to their house and collect the money from them there, and then drive back to the store."

The bitch of it is, if we didn't offer delivery, we'd lose a lot of business. It's kind of a "damned if you do, damned if you don't" situation.

Pizza is not a high-profit business. In addition to food cost and labor, throw in rent, gas, electric, phone, insurance, repairs, replacing equipment, and any other miscellaneous expenses I'm forgetting.

I am vehemently against paying sub-minimum wage to drivers, though. Our drivers get full minimum, plus a per-run fee and, of course, tips. While it would make me happy in terms of lower labor to go to sub-min, it would make me unhappy in the fact that I'd lose all my best drivers who deserve to be making decent money for the risks they undertake. Plus, I'm one of those managers who appreciate good employees, even though I can't do anything about paying them as much as I'd like to.

So, to summarize:

-It costs the store more to offer delivery
-Without delivery, we'd get less business...damned if you do, damned if you don't
-The delivery charge is a way of trying to recoup some of those costs in a time where nobody wants to pay much for pizza
-An unintended consequence is that customers misunderstand and assume that it's going to the driver as a tip

And for the record, if a customer asks me if the delivery charge is a tip, I tell them it's a store surcharge to offset the cost of the driver's mileage reimbursement.

[Racket_Man]

Now, in my case, I work for a place that sells a much better product, but still...when I started working back in 1997, the special we had at the time was 2 medium 1 (IIRC) topping pizzas for $10.00. Right now, 14 years later, one of our specials is a medium 1 topping for $5.99. That's, what, a 16% increase in a decade and a half? I'm pretty sure that our food cost has increased more than 16% in that time.

yes the margins have become slimmer and slimmer, but the problem with most of the bigger chains is that they now tend to "court" to the lowest common denominater. 19 months ago my chain was still pricing their product in the range of $10 for a basic medium and $12 for a basic large with each extra topping being $1.50. combinations started at around $14.

then in late 2009 all of the bigger companies got this bright idea --- OK the economy is bad right now, let's offer a limited time "DEAL" to get traffic flow into our stores -- like any pizza any size any way for $10. first one started it then the others "had to" make a similar offer. now that would not have been a bad thing had it been "for a limited time". it was supposed to run from Jan to the middle of March ending after the NCAA basketball tourney. BUT wait sales are SO DAMN GOOD right now let's just keep going. people were literally ordering $30 - $35 pizza and getting the $10 deal. tell me how they made a profit on that. YES our sales were WAY up (everyone set company sales records daily weekly monthly) but our food costs were sky high, yet they choose to keep going and literally loosing money.

because that "promotion" ran for soooooo long we have the stiuation where poeple now "believe" that all pizza places should offer cheap pizzas. therefore our profits are way down and my franchise is slashing all kinds of costs just so they can stay afloat.

Now, also keep in mind that in addition to paying mileage reimbursement to the drivers, there's also, the, say, 15 minutes we're paying out in hourly while they're on a run. Another expense that we wouldn't have if we didn't offer delivery. Pickups, you take the order, you make the order, you box the order, you toss it up on the warming shelf, and when the customer comes in you ring them up and give them their pizza. That's the extent of the labor involved.

With a delivery, it's all of the above, except remove "ringing up the customer at the counter" and add "pay someone to drive the X amount of minutes to their house and collect the money from them there, and then drive back to the store."

it is a "convience" that people have gotten used to in the last 20 or 30 years. moreso today with the high price of gas. but what people fail to realise is what you detail below. all they think is "HMMMM I am hungry, but I do not want to got out in the rain/snow/sleet/icestrom/heatwave/etc. SO delivery it will be. the delivery drivers perform that convience type service.

what you and the customer do not take into account is the fact that the drivers use their personal vehicles to perform that service. now performing that service costs the drivers money in the form of repair, mainteneance, insurance, wear and tear, rapid depreciation of the vehicles value, etc. drivers tend to have to frequently change their oil, go through tires and brakes fast, dodge moon crater potholes, have to be vigilant when driving so as not to be in an accident, etc.

now most of the time the cost of said reapirs, maintenance, insurance and wear and tear comes out of the pocket of the drivers. most companies barely reimburse for gas let alone repairs, etc. though if they were to actually follow the IRS suggested rate of (currently) 55 cents per mile "cost" of operation a vehilce esp "unreimbursed BUSINESS expenses" (since delivery driving is part of a BUSINESS) and the fact that the US Dept of Labor has stated that "tips can not be used to compensate for unreimbursed business expenses" driver would not be getting the royal screw job.

now I have to ask a question: does the per-run fee you pay the drivers cover all of the above or just gas???? and what is your stores average reimbursement per mile???? since you are paying minimum wage (and I salute your company for that) subtracting the average vehicle expenses (at the IRS suggested rate of 50 - 55 cents PER MILE minus what you actaully reimburse them) from your drivers hourly pay still would put them below minimum wage.

a simple example
per run rate $1
driver drives 100 miles on a shift
driver gets 25 runs on a 8 hour shift = $25 in reimbursment
8 hour shift * minimum wages of $7.25 = $58
drivers per mile breadown $25 reimbursment/100 miles= 25 cents per mile
100 miles * IRS suggested per mile rate 55 cents = $55
$55 - $25 = $30 theorically what the driver is loosing on that shift
$58 - $30 (out of pocket) = $28 / 8 (hours worked) = $3.50 per hour pay rate

my own situation is that I ONLY get, on average, about 23 cents per mile reimbursement from my company. this figure is not based on the price of gas, what kind of car I drive, what my miles per gallon are, what my repairs are, etc.

say the driver only has one car for delivery and personal use. the drivers mileage ratio is this 75% delivery and 25% personal. OK I can accept that I will be paying a certain percentage of my repairs out of my own pocket BUT since MY vehicle is being "leased" for delivery/business pruposes I expect a little more than 23 cents per mile.

now say the driver has to have a transmission repair (and those are not cheap) from all of the wear and tear while delivering (stop and go driving is very tacxing on a transmission). where does that money come from???? from the drivers pocket of course since all most companies reimburse for these days is gas.

The bitch of it is, if we didn't offer delivery, we'd lose a lot of business. It's kind of a "damned if you do, damned if you don't" situation.

Pizza is not a high-profit business. In addition to food cost and labor, throw in rent, gas, electric, phone, insurance, repairs, replacing equipment, and any other miscellaneous expenses I'm forgetting.

what most pizza businesses do not or will not recognise is that drivers also think in those terms ie. business expenses. even when drivers try and explain to our managers the fact that WE have expenses also, ( vheicle expenses AND personal expenses), we just get a look of "Now now little child, go back to the sandbox and play and let the ADULTS handle this situation. We KNOW what is best for you. NO questioning allowed." or the higher up just give that blank look of their brain bluescreening because they have lost touch with the ground pounders who actually make the business run.

I am vehemently against paying sub-minimum wage to drivers, though. Our drivers get full minimum, plus a per-run fee and, of course, tips. While it would make me happy in terms of lower labor to go to sub-min, it would make me unhappy in the fact that I'd lose all my best drivers who deserve to be making decent money for the risks they undertake. Plus, I'm one of those managers who appreciate good employees, even though I can't do anything about paying them as much as I'd like to.

So, to summarize:

-It costs the store more to offer delivery
-Without delivery, we'd get less business...damned if you do, damned if you don't
-The delivery charge is a way of trying to recoup some of those costs in a time where nobody wants to pay much for pizza
-An unintended consequence is that customers misunderstand and assume that it's going to the driver as a tip

And for the record, if a customer asks me if the delivery charge is a tip, I tell them it's a store surcharge to offset the cost of the driver's mileage reimbursement.

the DC is now as you have stated used to defer rising ingrediant/business costs.

I heartily salute you for your attitude towards your drivers and your williness to set the customer straight concerning the DC. you are a rare bird among managers.

I have to ask this question though: Why does your store pay drivers minimum wage??? are you in a state that does not allow for tip credit (only 7 left)????? or was this a deliberate decision on the part of your company?????

the problem is the over all trend in the industry is slashing driver wages to as low as $4 per hour (and in some places even lower), AND freeezing wages at that level thus shifting greater costs onto the dirvers instead of the company thus making the drivers loose even more money on a per hour basis.

[jackfaire]

I feel the need to chime in here.

I've worked at a pizza place for the past 14 years, and am now a GM. Honestly, I can understand all points of view regarding this issue, but I want to point out a few things:

I am not saying there shouldn't be a delivery charge I am saying there shouldn't be a delivery charge.


Heee heee that's fun.

What I mean is that it should be part of the overall cost of my pizza. No I am not stupid but it would be nice if as costs go up so does the price of the pizza so I don't have to get all the way to the checkout screen to figure out how much my order is really going to cost. I understand they can't tell me exactly what sales tax will be until finishing my order but I have enough experience to estimate.

[brighteyedkitty]

because that "promotion" ran for soooooo long we have the stiuation where poeple now "believe" that all pizza places should offer cheap pizzas. therefore our profits are way down and my franchise is slashing all kinds of costs just so they can stay afloat.

Yep, and everyone has to price competitively or risk losing business.

what you and the customer do not take into account is the fact that the drivers use their personal vehicles to perform that service. now performing that service costs the drivers money in the form of repair, mainteneance, insurance, wear and tear, rapid depreciation of the vehicles value, etc. drivers tend to have to frequently change their oil, go through tires and brakes fast, dodge moon crater potholes, have to be vigilant when driving so as not to be in an accident, etc.

Oh, I take that into account. It's another reason I'm against sub-min and split-pay.

now I have to ask a question: does the per-run fee you pay the drivers cover all of the above or just gas???? and what is your stores average reimbursement per mile???? since you are paying minimum wage (and I salute your company for that) subtracting the average vehicle expenses (at the IRS suggested rate of 50 - 55 cents PER MILE minus what you actaully reimburse them) from your drivers hourly pay still would put them below minimum wage.

$1.50 delivery charge, drivers get a buck a delivery.

what most pizza businesses do not or will not recognise is that drivers also think in those terms ie. business expenses. even when drivers try and explain to our managers the fact that WE have expenses also, ( vheicle expenses AND personal expenses), we just get a look of "Now now little child, go back to the sandbox and play and let the ADULTS handle this situation. We KNOW what is best for you. NO questioning allowed." or the higher up just give that blank look of their brain bluescreening because they have lost touch with the ground pounders who actually make the business run.

I recognize it, there's just not much I can do about it, short of eliminating delivery (which I don't want to do), raising prices (which I would like to do, but it would likely lose us business, especially where I work, which is a college town with a LOT of competition), or cutting drivers' hourly pay (just no).

I heartily salute you for your attitude towards your drivers and your williness to set the customer straight concerning the DC. you are a rare bird among managers.

Why thank you.

I have to ask this question though: Why does your store pay drivers minimum wage??? are you in a state that does not allow for tip credit (only 7 left)????? or was this a deliberate decision on the part of your company?????

Ohio allows sub-min. I can't speak for other stores, or for the owner of mine, but in addition to the fact that drivers deserve at least min for the job they do, in my opinion I don't want to be bothered having to make sure they're doing no more than 20% in-store work, or having to figure out how much time they spent on the road versus in the store in order to do split-pay. (We're not computerized yet, but even if we were, just...no.)

Personally, I hate training new people. I realize it's necessary, and I'm capable of doing it, but what I try to do is get people in, get 'em trained and trained well, and keep 'em around as long as I can. Since I took over the store it seems like turnover is down, and in the last 2 years I've only hired maybe 10 people. I like it that way. And in the case of drivers, I don't think I would have as much luck retaining people if we were sub-min. That's in addition to the costs that drivers undertake and the dangers they face. If the money isn't there to pay people what I think they're really worth, I can at least try to see to it that they get screwed over as little as possible. I think the owner has a similar viewpoint.

What I mean is that it should be part of the overall cost of my pizza. No I am not stupid but it would be nice if as costs go up so does the price of the pizza so I don't have to get all the way to the checkout screen to figure out how much my order is really going to cost. I understand they can't tell me exactly what sales tax will be until finishing my order but I have enough experience to estimate.

I agree with you, but until people are willing to pay what the pizza is worth there's not much anyone can do about it.

[jackfaire]

I agree with you, but until people are willing to pay what the pizza is worth there's not much anyone can do about it.

Oh I know and I am sure that my experience in customer service colors this heavily. For example I hear friends bitch about "God I can't stand hidden fees" and when I ask almost always the fees they are complaining about are taxes that their particular state, county, and/or city charge. You know the things that when you start cell phone service the company says and various fees and taxes depending on where you live.

[Racket_Man]

Ohio allows sub-min. I can't speak for other stores, or for the owner of mine, but in addition to the fact that drivers deserve at least min for the job they do, in my opinion I don't want to be bothered having to make sure they're doing no more than 20% in-store work, or having to figure out how much time they spent on the road versus in the store in order to do split-pay. (We're not computerized yet, but even if we were, just...no.)

good for you. you know about the DOL's FLSA 20% rule. again you are a rare bird in that aspect.

I again salute you for being respectful of drivers and their plight and trying to fight to get them the most you can.

most companies/managers will NOT acknowledge the DOLs 20% rule being a legitimate DOL rule and act as if drivers (esp sub-min wage all the time) are just cheap labor and that is the way it is going to be. well if there is a automated POS system there are reports (my BFF indeed) that can be run (and I do have access to surprisingly enough) and those reports are the companies enemy (though they do not seem to care). and my average is 30-35% on non-tipped activities.

unfortuneately most drivers have a bad case of apathy even long time veteran drivers. as in they just look at the "wad" of money they have at the end of their shift and go "WOW I got MONEY" and do not stop and think about all of the other stuff they got going.

yeah split wage is a bear. my time sheet went from 1/2 page per 2 week pay cycle to 8 pages on a computerized POS system. I would hate to be doing that on a paper/manual payroll system.

the one thing that really burns me up is that most manager tend to like uninformed, uneducated, ignorant and totally compliant employees who will just suck up whatever the company presents them with. "OH we are going to cut your pay by 25%" *****CRICKETS CHIRPING***** that is the sound of silence and no protesting or uprising or anything