Delivery Drivers Must Be 100% Reimbursed, Court Rules
DoorDash takes off with Wing, FedEx revamps network, Instacart stock up
We’re sailing into the weekend with some interesting news: DoorDash is flying your Wendy’s Baconator to the high heavens, thanks to Wing; Instacart is also flying high, at least as far as its stock goes; FedEx is retooling its network; and the courts just threw a wrench into your worker reimbursement plans…
This week’s edition is brought to you by Curbivore — next week in Downtown LA — today’s your last chance to score discounted tickets!
Today:
Court Rules Min Wage Couriers Get Full Vehicle Reimbursements
DoorDash Launches Wendy’s with Wing
Chart Time | Instacart Stock Recovers
FedEx’s Plan to Restore Growth
POLICY | Min Wage Deliverers Need Full Reimbursement
In a shakeup to pizza parlors across the Midwest, the Sixth Circuit Court of Appeals ruled that delivery driver employees who make minimum wage must receive 100% reimbursement for the costs of using their own vehicles. As those vehicular expenses mean the workers’ take home pay effectively falls below minimum wage, the court ruled many employers were in violation of the Fair Labor Standards Act (FLSA.) The tricky part is that the FLSA doesn’t specify how to calculate *exact* expenses, but the court ruled that two previous approximations were incorrect. The Sixth Circuit has jurisdiction over KY, MI, OH and TN.
The Big Picture: This decision vacated two earlier rulings: Parker v. Battle Creek Pizza, Inc and Bradford v. Team Pizza, Inc. One had reimbursed drivers at 28 cents per mile, while the other paid $1 to $1.50 per delivery, while the plaintiff had asked for the IRS standard reimbursement rate (at the time) of 54 cents per mile. The court has remanded both cases, asking the lower courts to figure out how to best calculate exact costs. With this in limbo, and calculating exact costs dangling as a possible burden for other employers, expect this to further accelerate the shift to using contract labor instead of employment.
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AUTONOMY | DoorDash Partners with Wing for Aerial Delivery
DoorDash and Wing just announced the launch of a drone delivery pilot, bringing their partnership to Christiansburg, Virginia. The pilot will initially serve food from a single Wendy’s, where DD customers will have the option to select drone delivery on the checkout screen. DoorDash is the first marketplace partner that Wing has directly integrated with, as opposed to requiring consumers to use its first party app. While Wing touts that its fastest delivery took just 3 minutes, it’s only promising a 30 minutes or better guarantee for this service, which isn’t super compelling given that the entire town of Christiansburg is less than 15 square miles…
The Big Picture: DoorDash and Wing have been working together in Australia since late 2022, where the two cos. now service 60+ merchants in three Queensland locations. Alphabet-owned Wing has been operating in Christiansburg since 2019, delivering items like coffee and Girl Scout Cookies. Over in Texas, it also works with Walmart. DoorDash and Wendy’s are no slouches either: DD has an innovative robotics lab, while the burger chain has experimented with novel delivery solutions like Pipedream Labs.
Catch a clip of Pipedream’s VP Justin Robinson explain how their underground delivery solution works at Curbivore 2023. Better yet, join us next week to hear from Lars Erik Fagernæs, CEO of European drone delivery leader Aviant / Kyte.
CHART TIME | We’re Baaaaack!
After a rocky six months post-IPO, Instacart (that’s “Maplebear Inc” to its friends) is firmly back above water. Not only is it finally higher than its $30 listing price, shares of the 3PD have outperformed JET, Deliveroo, Uber and Delivery Hero over the past three months. That might take some wind out of the sales of the pending class action lawsuit by shareholders.
LOGISTICS | FedEx Rolls Out Network 2.0 & fdx Changes
FedEx is pushing ahead with a number of changes to its delivery systems, starting with its Network 2.0 initiative. Now at over 50 locales, including Alaska and Hawaii, the delivery giant is continuing to combine its Express and Ground operations into one org. The company aims for 12 more integrations this year, including all of Canada. FedEx is also on schedule to launch its new fdx platform (ugh, hate that all lowercase b.s.) which is its new ecommerce-oriented initiative to compete with Amazon’s logistics offering.
The Big Picture: The news came on the back of its quarterly earnings, where adjusted net income rose 12% to $966 million, despite this being the sixth quarter in a row where revenue fell. The Memphis, TN-based carrier has been cutting costs to keep up, but stock watchers are now optimistic that its new plans will let it catch up to UPS’ singular network, and allow it to win back some volume that its lost since its delivery contract with Amazon back in 2019.
A Few Good Links
Uber Freight expands drop and hook roll-out. Point Pickup going out of biz. Uncertainty if ghost restaurants fall under new CA fast food rules. Truck electrification costs may hit $1T. How Walmart lowered logistics emissions. FreeWire unveils low-cost charging solution for grocers. Loop raises $6M to simply 3PD-related accounting for restaurants. Darden sales, profit up. 40% of global consumers match “click-and-mortar” behaviors. Coast raises $92M for fleet payment management. Workers prefer on-demand pay. FTC says grocers profited from pandemic supply chain woes. Biden cancels fresh $5.6B in student loans. Hyzon makes slow progress with hydrogen truck deployments. Xos 2023 revenue up 22% to $44.5M — be sure to check out their electric van on display at Curbivore. Uber partners with PTA for teen safety. Fiat launches 500e Beta Club, bringing mini-EV back to America. Acre Venture Partners raises $140M foodtech fund. Meet the eccentric mind running a one-man delivery service in Seattle.
P.S. Get your Curbivore tickets before prices jump tonight!
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