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Fast Food Industry Delivers $20/hr Wages in CA
London's new courier road rules, egrocery sales up, McD's kills soda fountain
Policy and regulation is the name of the game today, with industry-rattling updates out of California and London. Plus, digital grocery sales are up, up, up, and the soda fountain is going bye, bye, bye.
Gov & Biz Agree to $20/hr Wage for CA Fast Food Workers
3PDs Pledge Road Safety in London
Chart Time | Grocery Pickup & Ship-to-Home Surge
Did Delivery Kill the Soda Fountain?
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LABOR | Fight Over - CA Fast Food Workers To Get $20/Hr
The contentious battle between organized labor and business leaders is cooling down for a moment, with the National Restaurant Association and its allies across the fast food industry agreeing to scuttle a planned referendum that would have attempted to roll back recent pay raises for workers. Last year the state passed AB 257 — the Fast Food Accountability and Standards Recovery Act — which bumped minimum pay in the industry to $20 / hour, above the state’s standard $15.50 wage floor.
The Big Picture: Restaurateurs got some things in return for pulling their referendum. The state will no longer push to further increase sector wages to $22 (although expect cost of living adjustments in the future.) And a separate bill, which would have held franchisors jointly liable for franchisees’ labor violations, won’t proceed. Here’s an interesting experiment where we can track the impact of the improved working conditions: let’s compare two McDonald’s in the Lake Tahoe area (where California meets less-regulated Nevada.) A Big Mac Meal on the CA side of the lake is $13.09, but just a few miles east in NV it drops to $11.19. Sounds like a good opportunity for some delivery-based arbitrage!
3PD | Deliverers Sign Road Safety Pledge in London
Delivery giants Uber Eats, Just Eat, Deliveroo, Stuart and Getir have all signed a charter with the UK’s Transport for London authority, committing to improving safety and compliance for couriers on motorcycles, mopeds and ebikes. The voluntary charter is composed of 10 principles and includes legal requirements for riding and working in Britain, safe riding and realistic delivery schedules.
The Big Picture: Delivery workers have continued to turn to smaller vehicles as ways to beat traffic and cut costs / environmental impact. But these vehicles come with increased risks as well; TfL reports that motorcycles, mopeds and scooters represent just 2.6% of kilometers driven in London, but accounted for around 27% of deaths and serious injuries from 2017-2021. That’s about 30 people that tragically lose their lives each year. Karthik Harith, General Manager for Getir in the UK, added: “We are pleased to be supporting the launch of Transport for London's Road Safety Charter for those involved in delivering meals or groceries across London. We take safety very seriously at Getir. That's why all of our couriers receive paid training and sensible targets to ensure that they are as safe on the roads as possible. We are proud to support this charter, building awareness of motorcycle safety and improving welfare for both couriers and other road users."
CHART TIME | Grocery Delivery Update
Another month, another check-in with the world of egrocery sales. August 2023 is looking good, with revenue up 8.7% YoY to $9.3 billion. While standard delivery (think Instacart) held flat, ship-to-home (like Blue Apron) and in-store / curbside pickup picked up speed. Mass grocers like Walmart grew share, while mainstream grocers retrenched.
RESTAURANTS | McDonald’s Kills Self-Serve Soda Fountains
McDonald’s announced it was phasing out self-service drink stations by 2032, meaning folks that love to mix a little Coke with a splash of Sprite and a tinge of Hi-C for good measure only have 9 more years to do so. Sorry Midwestern soda (or as they say, “pop”) junkies, some restaurants in Illinois have already pulled the machines. As McDonald’s (and many other restaurant groups) killed off access to self-serve soda fountains during the pandemic to reduce human contact, staff have already largely adjusted workflows to pour drinks on customers’ behalf.
The Big Picture: This trend is being driven by an increase in delivery orders and digital sales (the latter of which now account for 40% McD’s earnings.) When a customer orders in advance (or via a courier,) there’s no chance for him or her to pour his or her own drink; this move consolidates the drink station, freeing up the public-facing unit’s real estate for other purposes. While many brands are adapting new build-outs to better match with delivery’s needs and expectations (including Mickey D’s forthcoming CosMc locations,) this move is an easy-win for existing restaurants looking to adapt to trends.
A Few Good Links
Uber Eats scores Central California’s Save Mart as new grocery partner. CYCLE’s new 20FIFTY model geared towards delivery workers. Amazon unveils end-to-end supply chain offering. Flexport launches self-service D2C-brand-focused supply chain program. Domino’s enhances rewards program. Vegas culinary workers to hold strike vote. New report shows positive impact of DoorDash’s Project DASH. Clean Juice franchisees revolt. Sprinkles founder Candace Nelson shares secrets behind her new Pizzana chain. (Replay her speaking at Curbivore ‘23.) Square shares details on last week’s DNS-related outage. Lime claims profitability, teases IPO. Advocates implore NYCDOT to improve proposed cargo bike rules. An update on yesterday’s piece regarding DoorDash alcohol deliveries: DD shares that after attempting to place an order to a campus location, users will get a notification (below) informing them that the order cannot be delivered.
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