The owners of two companies that delivered packages for Amazon said they threatened to sue the tech giant over drivers’ working conditions, per a CNN report.
Ryan Schmutzer and Tracy Bloemer, two business owners from Portland, Oregon, spoke to CNN about their experiences as Delivery Service Partners (DSPs) for Amazon. DSPs are part of Amazon’s massive delivery network, but their drivers aren’t directly employed by Amazon.
Schmutzer and Bloemer told CNN their drivers’ wellbeing deteriorated after the pandemic hit. This was partly due to the high number of packages Amazon expected drivers to deliver, as well as the tech giant telling drivers to cut the time it took them to collect packages and put them in their vans, the pair said.
Schmutzer told CNN some of his drivers quit mid-shift because the work was so intense.
Schmutzer and Bloemer also told CNN their profits shrank during the pandemic. DSPs are paid per route, and Bloemer told CNN that while her business had been allocated up to 70 daily routes in the past, Amazon cut it down to 40 routes per day in June 2020.
The two business owners asked a lawyer to draft a joint letter to send to Amazon in June of this year, warning they might litigate unless Amazon improved working conditions for drivers, they told CNN. The pair also asked for $36 million to make up for unspecified losses.
Specifically, they wanted a cap on their drivers’ delivery numbers, at a maximum of 150 stops and 250 packages per day. DSP drivers told Insider in August they were expected to deliver between 170 and 350 packages per shift. Amazon says it works with DSPs to set realistic expectations.
Amazon then terminated its business with Schmutzer and Bloemer, they said.
Amazon didn’t immediately comment on CNN’s report when contacted by Insider. A spokesperson told CNN that Amazon terminated contracts with Schmutzer and Bloemer after they threatened to end their business with it. This threat jeopardized drivers’ livelihoods, the spokesperson said.
“Our goal is to create great partnerships with our Delivery Service Partners and their drivers, and continue to use their feedback to make improvements. A number of impacted drivers have been hired by other DSPs in the area,” the spokesperson said.
On the number of routes, Amazon told CNN that demand varied year to year and by season, and that it worked with DSPs to manage this.
Chick-fil-A’s new delivery-only restaurant concept will launch this fall in Nashville, the chain announced.
The concept, Little Blue Menu, will operate as a ghost kitchen with three new virtual restaurants: Flock and Farm, Garden Day, and Outfox Wings. They will all operate alongside a delivery-only Chick-fil-A in Nashville, so food from all four restaurants could be ordered together and delivered in hybrid electric vehicles, Chick-fil-A says.
The chain says the name is a reference to Chick-fil-A founder S. Truett Cathy’s original blue menus.
Chick-fil-A first filed a trademark application for Outfox Wings in May, Insider reported. The chain didn’t offer up any menu specifics but said “Whether it’s with homemade marinades or a delectable, oven-roasted chicken with unbelievable taste, flavor is the central theme across the virtual restaurants,” in a statement. It also references “thick-cut pork belly BLT, garden-fresh salad, crispy Chick-fil-A Waffle Potato Fries, and bone-in wings,” as menu items in the upcoming concept.
This first Little Blue Menu location is designed to work as a prototype and work out the kinks for future locations.
“After the Nashville pilot opens and customers share their honest opinions about the virtual restaurants, we will have the opportunity to tweak or add new menu items,” marketing lead Kanika Patrick said in a statement. A second location is planned for Atlanta in 2022.
Other restaurant chains have also experimented with delivery concepts over the last year as they’ve proven profitable while customers are reluctant to eat-in dining rooms. Applebees launched Cosmic Wings, a delivery-only virtual brand with Cheetos-flavored wings. Outback Steakhouse parent company Bloomin’ Brands launched Tender Shack, a virtual chicken tender restaurant, and Cracker Barrel debuted a delivery chicken and biscuits concept in Indianapolis.
“Delivery is here to stay. Now more than ever, customers want a variety of options delivered quickly, right to their doorstep,” John Moore, one of the franchisees overseeing the new delivery kitchen, said in a statement.
Genghis Grill launched its Stir Fry Chef brand in the summer. Doug Willmarth, Chief Brand Officer at Genghis Grill, told Insider that Stir Fry Chef was helping his franchisees to boost sales.
Although Genghis Grill has some set dishes on its menu, it makes most of its sales from custom dishes where diners can choose which base, toppings, spices, and sauces they want. To many customers, the brand is primarily a create-your-own chain, Willmarth said.
Stir Fry Chef’s menu is, on the other hand, made up solely of pre-set dishes. This helps the business cater to a different group of customers, Willmarth said: customers see Stir Fry Chef as “a regular restaurant where I can just order off the menu.”
Stir Fry Chef dishes are made in 40 of Genghis Grill’s 51 kitchens across the US, using the same equipment and similar ingredients, but slightly different recipes, Willmarth said. It costs existing Genghis Grill restaurants less than $1,000 to kit out their kitchens so they can make Stir Fry Chef food, he said.
“Both our stores and our franchisees can leverage existing food they have in the restaurant, the labor and cooking skills that are in the restaurant, the equipment they have,” Willmarth said.
Brody Sweeney, CEO of Thai chain Camile Thai, told Insider that virtual brands were created to “sweat assets better.”
He said that Camile Thai was operating a virtual brand called Shanghai Sally in London, and its dishes share the same core ingredients as Camile Thai. This makes it easier to operate both brands in one kitchen, Sweeney said.
Some virtual brands are ran out of ghost kitchens, which don’t have dining rooms and cook food solely for delivery. Hot-dog chain Dog Haus has, for example, launched a slew of virtual brands including Plant B and Mutha Clucka, which are run out of both brick-and-mortar restaurants and ghost kitchens.
Dickey’s Barbecue Pit told Insider it’s even opening a brick-and-mortar restaurant for Wing Boss, which it first launched as a virtual brand.
Genghis Grill’s Willmarth said that physical restaurants were “certainly is a consideration” for Stir Fry Chef, but not for a while.
Rather than launch virtual brands themselves, some restaurants have instead hosted them for other companies. Franklin Junction, for example, matches restaurants with spare kitchen capacity to brands looking for space to prepare delivery-only food.
“Restaurant kitchens are very multi-purpose vehicles,” CEO Rishi Nigam told Insider. “They’ve artificially been limited by putting a $5,000 sign out front that says: ‘We only make this kind of food.'”
Chipotle has logged a record $2 billion in digital sales so far this year, driven by a wildly popular fan loyalty program that has more than doubled to 24 million members since the start of the pandemic.
The fast-casual chain, which has nearly 2,900 restaurants, is looking to build on that success. Last week, Chipotle launched new ways for its rewards members to unlock extra points so they get “free Chipotle faster,” Tressie Lieberman, Chipotle’s vice president of digital marketing and off-premise, told Insider in a phone interview last week.
Earlier this summer, McDonald’s debuted My McDonald’s Rewards after testing the revamped free-food-for-points program over several months. Last week, Burger King rolled out its new Royal Perks loyalty program after national testing.
Chipotle’s expanded app features more gamification aspects, wherein customers are given personal challenges to earn more points. For example, customers can get bonus points for adding guacamole to an order. Chipotle is also awarding badges to customers to point out what makes them special. For example, you can earn a badge for exploring the menu or for ordering Chipotle three ways: in the restaurant, mobile order pickup, and delivery.
“It’s just a way to show that you’re a super-fan of the brand,” Lieberman told Insider.
Getting customers to become members of the Chipotle app is also important for the chain’s profitability.
While third-party delivery apps provided a lifeline to restaurants during the pandemic, most of them charge hefty delivery fees – as high as 30% per order. Some delivery apps also don’t share consumer data with restaurants.
For Chipotle, the app has been a key weapon to reclaim their digital business, and therefore, boost profits.
The loyalty program, which debuted in 2019, offers dozens of ways for customers to earn free food – from free guacamole and chips to free entrees. It also allows customers to donate to a special charity when ordering food through the app.
Chipotle also uses its app to offer digital-only food specials. For example, the chain’s Lifestyle Bowls, which cater to diets such as keto and Whole30, are only offered through the brand’s app or website. More recently, Chipotle has been selling its new quesadilla entree only on the app or online.
None of these online-only food specials are available on third-party delivery apps like DoorDash.
“It’s a way we can create a relationship that keeps the digital sales flowing,” Lieberman said. “When we can get people into the digital channels, not only do they spend more, but they come more often.”
Amazon has advised the mom-and-pop companies operating its blue delivery vans to tell would-be drivers they won’t be screened for marijuana use, Bloomberg reported Wednesday.
The direction by the e-commerce giant comes in the midst of a driver shortage that is causing disruptions to US supply chains, retailers, and mail services.
Dropping marijuana testing can hike job applications by up to 400%, Amazon said in correspondence to its delivery partners, seen by Bloomberg. Amazon didn’t clarify how it calculated this figure, Bloomberg said.
Screening prospective drivers for pot reduced job applications by 30%, Amazon said in the correspondence, per Bloomberg.
One of Amazon’s delivery partners appeared to be unhappy about the advice.
“If one of my drivers crashes and kills someone and tests positive for marijuana, that’s my problem, not Amazon’s,” one anonymous partner told Bloomberg.
Another said that marijuana was the main reason why prospective drivers failed drug tests, but since they stopped screening for it, they’d taken more drivers on board.
Some delivery partners told Bloomberg they were worried about insurance and legal risks in states that still criminalize pot. Others said they were concerned about drivers potentially smoking a joint before heading out to work.
Amazon didn’t immediately respond to Insider’s request for comment.
An Amazon spokesperson told Bloomberg that testing applicants for pot has disproportionately impacted communities of color, which has stunted job growth. They also said Amazon employees who are “impaired” in the workplace would face serious consequences.
“If a delivery associate is impaired at work and tests positive post-accident or due to reasonable suspicion, that person would no longer be permitted to perform services for Amazon,” she said.
Amazon announced in June that it stopped drug testing for marijuana for any positions not regulated by the Department of Transportation. The retail giant said it backed legislation to federally decriminalize marijuana in the US.
Customers in areas of Brooklyn, Queens, and the Bronx will be able to have groceries collected by Instacart drivers from stores outside the city and delivered to their homes. Instacart is a same-day delivery service that pairs users with gig workers who shop for and deliver their orders.
Walmart previously offered grocery delivery in New York through its Jet.com service, which was shut down in 2020. Aside from this, the retail giant has made few moves into the New York City market and does not currently have stores there.
The move will allow Walmart to better compete with Amazon, which offers its Amazon Fresh delivery services for grocery in New York and has been ramping up speedy delivery options in urban areas.
“It’s about reaching more customers,” a Walmart spokesperson told The Journal, who said the retailer is using Instacart’s services in areas where it lacks stores.
Walmart didn’t immediately respond to a request for comment from Insider.
This isn’t the first time Walmart has teamed up with Instacart. The two companies partnered in 2019 to offer grocery delivery services to 200 Walmart stores across Canada. In 2020, it extended these same-day delivery options to parts of the US, including California and Oklahoma.
At the time, Moody’s analyst Charlie O’Shea described the partnership as Walmart’s latest “salvo in its delivery arms race with Amazon.”
“Walmart will continue to leverage its 5,300-plus physical locations in the US, which is a compelling competitive advantage as it provides consumers with a same-day pick-up option, with same-day delivery augmenting this capability, creating a very powerful one-two punch,” he said, Insider’s Áine Cain reported in 2020.
Walmart is offering a new platform that allows businesses to arrange local deliveries with the retail giant. The announcement came as the company continues to attempt to leverage its logistical capabilities and expand into e-commerce-related revenue streams.
The new commercialized delivery platform will be called Walmart GoLocal.
Walmart first launched its delivery and express delivery services in 2018, and the offering is now available for 160,000 products at over 3,000. The retailer estimates that its delivery program covers nearly 70% of the US population. According to Walmart executives, Walmart GoLocal is a move that can help local businesses capitalize on those delivery capabilities.
Executives also tied the new service to other commercial offerings from the Bentonville, Arkansas-based company, including its ad business Walmart Connect and its rival to Amazon’s e-commerce enterprise, Walmart Fulfillment Services.
Walmart also recently announced that it would partner with Adobe to release technology products for small businesses.
Speaking during a press call on Monday, Walmart US CEO John Furner and SVP of last mile Tom Ward said that the new service, which debuts Tuesday, would be a “white-label” provider, meaning that the client’s branding will take precedence, as well as an alternative revenue stream and profit pool for Walmart.
Ward also said that the platform will be available in suburban and rural areas where “other delivery providers” struggle. “Through Walmart GoLocal, any merchant from national retailers to small town shops can use Walmart’s growing delivery platform to power their local delivery efforts,” Ward said. “The service is white-label, in that our clients brands are front and center.”
Ward explained how the service would work, noting that Walmart will get a “ping” whenever a customer places an order with a business using Walmart GoLocal. The service will dispatch a driver to deliver the item, and Walmart will “capture any delivery experience feedback.”
Walmart GoLocal has been contracted with several retail clients, although Ward and Furner did not expand on which businesses have signed on so far.
“Our strengths lie in our local footprint and our digital connections,” Furner said.
This business is an important part of the company’s overall strategy, which includes diversifying its revenue streams and profit pools with initiatives like Walmart Connect and Walmart Fulfillment Services. Its launch comes weeks after the retailer announced plans to begin offering technologies and capabilities to help other businesses navigate their own digital transformation.
During lockdown last year, Martin Gausby, a Danish developer living in London, subscribed to a coffee delivery service and discovered that the bean’s arrival became a weekly highlight.
“I get my coffee from Square Mile Coffee, a company founded by James Hoffman right here in London,” Gausby said a few days ago. “He has a YouTube channel about all sorts of coffee-related stuff, and I enjoy that, so I like supporting him by having a subscription to his coffee.”
Over the last few weeks, Insider tested a few coffee subscriptions services in London to see how they worked. Our choices were Pact, Kiss the Hippo, and Grind.
Two days, three boxes of coffee
The first two packages – Kiss the Hippo and Grind – arrived three days after the orders were placed. The Pact delivery came the following afternoon.
The boxes from Pact and Kiss the Hippo were slim enough to fit through the mail slot. The first delivery of Grind came with a tin, so it was a bit thicker but the company said the following packages are letterbox-friendly.
Many friendly emails arrived over the next few days. Each company wanted feedback on the coffee.
Of the three companies, Kiss the Hippo sent the most emails. “Look out for the postman,” said a subject line when the coffee shipped. The following day, before the coffee arrived, another email said, “Do You Have Everything You Need?” with a range of coffee-brewing products for sale. When the coffee arrived the following day, an email said, “Something Big is Here!”
In the month following our order, more than a dozen of Kiss the Hippo’s chatty emails arrived, compared to a few each from the other brands. Insider has reached out to the company for comment.
Pact promises ‘rare’ coffees
Each of the three roasters had similar ordering routines. Their websites were flowchart-like, with each answer leading to another. Pact’s had the most questions.
Pact first asked for a choice between regular or decaf. Then asked how the coffee would be brewed – Aeropress, Chemex, espresso machine, etc. After choosing the Hario V60, a pour-over, the site asked whether the order would be wholebean or medium grind. Wholebean for us.
And the final step was choosing your coffee from three options for 250-gram bags. A £6.95 House blend, a £7.95 Select roast, or a £9.95 Micro-lot, which was said to be, “Rare, high-scoring coffees.”
Our La Pederogosa “Micro-lot” beans were grown in Colombia by Mauricio Vega. The packaging said they were roasted on the day of the order, and packaged the followed day in London by Emily, whose last name wasn’t given.
Last year, Pact Coffee CEO Paul Turton told Insider that its subscriber list was growing quickly amid the UK lockdowns. Many of those subscribers have stuck around, he said a few days ago.
“The ‘covid cohort’ as we call it – or those who joined us after March 2020 have stayed loyal to us despite restrictions easing, especially now everyone has had the chance to fully experience Pact’s proposition over a pretty long period,” he said via email.
Grind is Instagram-friendly
Shoreditch-based Grind had the most eye-catching packaging, and the highest follower count on Instagram. The brand got its start in 2011, making it the oldest of the three.
“We’d been quietly working on our coffee-at-home project for about a year when the pandemic forced us to close all of our cafés,” Ted Robinson, Grind’s director, said a few weeks ago.
Between February and May last year, orders grew by a multiple of 30, he said. Growth has continued, with more than 75% of the company’s subscribers joining in 2021.
The house roast cost £13.50 per delivery, but plan pricing for each brand was based on how many cups you drink per day. Our first order from Grind included a reusable tin in millennialpink.
Grind didn’t say where the coffee had been grown or roasted, but said it was “shipped climate neutral.”
“We’ve offset the carbon emissions of all our deliveries for almost a year, protecting over 40,000 trees in the Jari Pará Forest Conservation Project in the Amazon,” the company said on a little card slipped into the box.
Robinson said the company has “helped over 100,000 people make better, more sustainable coffee at home” during the pandemic. Many of those buyers, he said, have stuck around even as the city reopens.
Kiss the Hippo promotes its farmers
Like Pact, Kiss the Hippo used its packaging to promote the small farms on which the beans were grown.
Our slim bag with a little red hippo logo was full of coffee from El Salvador. A label on the back said the Red Pacamara beans had been grown by The Diaz Family.
The family – Jose Efrin, Jose William, Arnulfo, and Santos – works on a few farms that “sit close together where they pool resources and elevate each other through a collective family bond.”
The coffee itself came with tasting notes: acidity at 4/5 and body at 3/5. It was pitched as having notes of “elderflower, apricot, lemon.” Our single-origin whole-bean option cost £12 per delivery.
Three fresh brews, all very good
Each of the brands had their own distinct flavors. Kiss the Hippo had a lemon zest, light and airy, as its tasting notes said. Grind was richer and darker. Pact was somewhere in the middle, balanced and a little earthy. The beans seemed fresher than what those from high-end grocery store in London, in part because they were roasted within the last few days. All were very good.
What stuck out in the end was not the beans, but the marketing – especially the way that Pact and Kiss the Hippo both promoted the local farmers. The messaging from all three leaned heavily into domestic, eco-friendly, and agrarian messaging, even if the farms that grew the beans were on another continent.
“Most of these small farms have been in the family for generations and we’re lucky enough to share their amazing coffee with the Pact community,” said Pact’s Turton.
Did knowing that the Diaz family grew our Kiss the Hippo beans in El Salvador make the coffee taste better? No, probably not. Did it give us something interesting to think about as we took our first sip of coffee? Yes, it honestly did.
The coffee that Gausby, the Danish developer, gets delivered from Square Mile has also been fresher than what he was used to at the grocery store, he said.
“I will move home to Denmark at the end of next month,” he said, “but I will strongly consider setting up a subscription with a local roastery.”
FedEx is gearing up for a busy holiday season after a year of labor shortages and increased demand, and to help deal with the rush, the shipping and logistics company has rolled out a new round of delivery surcharges.
The main surcharge season kicks in on Nov. 1 with a $1.50-per-piece price hike for FedEx’s Ground Economy deliveries. This applies to outbound residential deliveries for small and medium-sized businesses and covers low-weight, low-value, non urgent deliveries – the majority of typical consumer packages.
This first surcharge expires on November 28, but will be upped to $3 per package the following day and will last until Dec. 12 to compensate for Black Friday and Cyber Monday purchases. The surcharge will then return to the original $1.50 from Dec. 13 to Jan. 16.
The company also announced a 60-cents-per-piece charge starting Jan. 17, 2022 for retailers whose shipment volumes qualified for holiday surcharges. So far, there is no expected date for the end of this cycle.
The new delivery surcharges could add extra pressures to merchants and retailers’ operating costs because businesses must either absorb the increases or pass them on to their customers. A spike in transportation costs have pushed consumer prices higher at stores and restaurants as major companies struggle to maintain their margins.
Delivery giants like UPS, DHL, FedEx and USPS have been slammed by a litany of issues since the start of the coronavirus pandemic last year. With people on lockdown, ordering spiked. Meantime, as the US economy began to reopen this year, companies have dealt with labor shortages, including a critical shortage of truck drivers, as well as rising fuel and commodity costs.
FedEx has turned to offering pay raises and perks for its current logistics employees. Last year, FedEx was forced to place daily package limits on some businesses as its shipping network faces capacity issues around the holidays.
“If we assume that labor’s going to stay tight for a prolonged period of time, it is absolutely going to be more expensive to ship,” Ravi Shanker, a Morgan Stanley analyst, previously told Insider.
FedEx did not respond to a request for further comment about the surcharges.
Domino’s Pizza is giving away $50 million of free food to random customers that place a delivery order online from now until November 21, to promote its “straightforward delivery fee.”
It’s a shot at third-party delivery apps, which have largely benefitted from the pandemic, and the high fees for both restaurants and customers that often accompany the orders.
“Unlike many third-party food delivery apps, Domino’s provides customers with one straightforward delivery fee, because we know that’s what customers want and deserve,” Domino’s said.
The giveaways include pizza, boneless chicken, stuffed cheesy bread, pan pizzas, thin-crust pizzas, and chocolate lava crunch cake. Domino’s says there’s a 1 in 14 chance of winning, and more than 200,000 items have already been given away.
Third-party delivery apps have come under fire for charging restaurants high commissions amid the pandemic. Last year, for instance, three restaurant owners filed a lawsuit against Postmates, Grubhub, Doordash, and Uber Eats, accusing the platforms of overcharging restaurants for deliveries and making them pay for discounts given to customers.
“There are no hidden city or service fees with Domino’s, as we’ve been working to provide the best delivery experience at the best value to customers for more than 60 years,” the company added, “and that’s not stopping any time soon.”