Joanna Fantozzi - 10 Minutes News for Hoteliers - Page 9

3 min

Grubhub to pay $25 million settlement after FTC investigation finds ‘unlawful practices’

📦 Grubhub to pay $25 million settlement after U.S. Federal Trade Commission and Illinois Attorney General investigation into deceiving consumers on delivery fees, misleading drivers on pay, and listing restaurants without consent. Must now fully disclose delivery costs to customers, advertise driver pay transparently, and get restaurant consent for listings. FTC Chair Lina M. Khan says the action ends illegal practices and secures compensation for those affected. Settlement follows President Biden's fall 2023 crackdown on junk fees. Grubhub denies allegations but agrees to comply.

2 min

Los Angeles airport restaurant workers will soon be making $30 an hour

🏗 The Los Angeles City Council voted to increase the hourly minimum wage for tourism workers to $30 by 2028, starting with $22.50 in 2025. This legislation, inspired by upcoming events like the 2026 FIFA World Cup, the 2027 Super Bowl, and the 2028 Summer Olympics, also includes a $8.35 weekly healthcare plan. Current wages for airport and hotel workers are $18.78 and $19.73, respectively. Critics worry the increase may harm the industry's recovery post-pandemic.

2 min

As server wages rise, tips make up a smaller percentage of income

💸 Base wages for restaurant servers reached 43% of their average paycheck, up 35% since January 2020. From 2019 to 2024, their hourly earnings, including base pay and gratuities, jumped from $18.61 to $23.88, a 28% increase. The pandemic sparked wage spikes, influenced by tip credit laws. The Biden-era 80/20 labor rule was overturned in September 2024. Labor shortages during 2021 and 2022 significantly drove up labor costs. Chicago saw the fastest four-year wage growth for servers, while Boston had the highest tipped wages, with tips comprising 76% of wages. Conversely, Los Angeles and San Francisco had tips under 40% due to a raised minimum wage to $20 an hour. ADP Research analyzed wages across 50 states from data of 100,000 restaurant servers.

3 min

Toast switches its default white label delivery partner from DoorDash to Uber

📦 Toast, a point of sale system provider, has announced the expansion of its partnership with Uber, making Uber Eats Direct the new default delivery partner for Toast Delivery services, replacing DoorDash Drive. The change aims to reduce delivery fees, increase delivery radius, and leverage Uber's network. Operators have noticed a base price drop from $7.49 to $6.99 per delivery. Despite Uber Direct's 8-mile radius being narrower than DoorDash Drive's 10-mile, Toast customers can still choose between both providers. Positive and negative feedback from restaurant operators reflect varied experiences with the updated service. DoorDash currently holds 67% of the delivery market share, with Uber Eats trailing. Toast's shift to Uber Eats Direct could potentially alter DoorDash's market dominance.

3 min

This salad concept grows its own lettuce through an on-site hydroponic farm

🌱 Neon Greens, a quick-service salad restaurant in St. Louis, Mo., features its own 400-square-foot vertical hydroponic farm, producing an equivalent yield of three acres of 80 lettuce varieties used in their salads. Founder Josh Smith emphasizes radical transparency in sourcing, highlighting that conventional lettuce is often two to three weeks old when it arrives from California and Arizona. The hydroponic farm requires substantial machinery maintenance and was installed using a 150-foot crane. Neon Greens focuses on lettuce due to its high yield and quick growth, avoiding crops like kale with longer maturation times. The restaurant makes an environmental impact by saving on water—using only 2,500 gallons annually per farm versus 900,000 gallons in six months for traditional farming—and practices recycling and composting. While currently less cost-efficient due to operating a single location, Smith aims to reduce lettuce costs through expansion and economies of scale.

2 min

California voters narrowly reject $18 minimum wage increase

💸 Californians voted against Proposition 32—50.8% opposed—blocking an increase of the state minimum wage from $16 to $18 by 2026. The Associated Press confirmed the results on Election Day. California still maintains a high minimum wage, second to Washington State's $16.66 starting January 1, while California's has doubled since 2010. Fast-food workers, following AB 1228 passed in fall 2023, see a separate minimum of $20 as of April 1. However, restaurant traffic has declined nearly 6%, outpacing the national average, after the wage hike.

2 min

Texas judge overturns Biden-era overtime rule

💲 In Texas, U.S. District Judge Sean Jordan struck down the Department of Labor's final overtime pay rule, which would have raised the threshold incrementally to $58,656 by 2025. The rule, which went into effect on July 1, raised the yearly threshold to $44,000, impacting nearly 4 million salaried U.S. workers. However, this will now revert to the pre-pandemic level of $35,568. The Restaurant Law Center and Texas Restaurant Association's lawsuit led to this ruling, which the hospitality industry largely supports.

2 min

Inflation has cooled for both quick-service and full-service restaurants, study finds

💸 In April 2022, restaurant-related inflation peaked but has since declined, with full-service restaurants experiencing a 4.3% inflation rate and quick-service restaurants a 3.6% rate as of September, as reported by Square. Full-service restaurants have seen inflation rise since the year's start, in contrast to a steady decline in quick-service categories. Over the past seven years, labor costs have surged 73.9% for full-service restaurant employees and 60.2% for those in quick-service restaurants. Square highlights the ongoing operational challenges for restaurants, including balancing increased expenses with customer affordability.

2 min

October job growth stagnates nationally, including the restaurant industry

📝 In October, the U.S. national unemployment rate held steady at 4.1%, consistent since May 2024 and higher than the pre-pandemic rate of 3.5%. The restaurant and bar industries saw a slowdown in job growth, adding just 3,700 jobs with an employment rate of 3.7%. This was a stark contrast to September's initially reported 70,000 jobs, which was later adjusted to 39,300. Overall, August and September's job growth was revised down by nearly 65,000 jobs. Despite these adjustments, the National Restaurant Association indicates the employment trend remains positive, with industry employment above the pre-pandemic peak of 12.3 million jobs. Full-service restaurants are still 4% below February 2020 employment levels, while limited-service and snack/non-alcoholic beverage sectors are 3% and 17% above, respectively.

3 min

How the Common Man found success in New Hampshire with a portfolio of no-frills restaurants

🍴 The Common Man, a 12-concept hospitality group in New Hampshire, focuses on comfort food and country-style hospitality. Vincent Vella, CEO, emphasizes serving good food at reasonable prices. Founded by Alex Ray 53 years ago, the first location seated 35 people. Now with six unique locations, they serve classics like chicken pot pie mixed with fusion dishes. Their portfolio includes three diners and a camp-themed restaurant. Despite expansion, The Common Man will remain within New Hampshire, aiming to support local communities and charities like the New Hampshire Food Bank.

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