The gist: Waitr started the year on a high, buying up equal-sized competitor Bite Squad and hitting $14 a share in March. Since then, the nascent public company hit the rocks, facing lawsuits, potential restaurant strikes and a stock that’s fallen below $7.
The gist: Since going public, Waitr has faced legal attacks from disgruntled drivers. This week, citing efficiencies, the food delivery app company terminated several dozen employees in a move that took its workforce by surprise.
Approximately 80 employees are said to have been let go. Waitr has not confirmed that number officially, but the figure has circulated among current and former Waitr employees. A staff segment that worked to onboard new restaurants took the brunt of the reduction. In a statement, Waitr said the layoffs were a “difficult decision” and asserted that no jobs would be outsourced as a result. The company will focus workforce development on technology, customer success, sales and accounting, which remain “areas of growth.”
Growing pains. A blog post written by one former employee based in Florida laments Waitr’s transition from scrappy startup to corporate monolith. His wife, who worked remotely, was among those fired Thursday. His post portrays a callous and sudden dismissal:
They had a mandatory “integration meeting” in which they summarily terminated 80 people. They gave them 5 minutes to collect their things. They had police on site to escort them from the building. … It didn’t matter what these people did for the company. Some of them having been there since day one.
Asked to respond to the blog account, Waitr referred to its general statement.
Lake Charles, Lafayette and Bite Squad employees were impacted. Lake Charles’ NBC affiliate KPLC is reporting 25 let go. Employees at both Lafayette offices were also terminated, but the number and distribution are unclear. Earlier this year, Waitr struck a development deal with the state, receiving $1.5 million to outfit its new Downtown Lafayette HQ, along with a performance-based retention grant that caps at $1 million over five years. Waitr is expected to deliver 200 direct jobs to the Lafayette market.
Waitr says the layoffs were a necessary result of its Bite Squad acquisition. Waitr bought the Minneapolis-based competitor last year for $321 million and has since been in the process of integrating the two workforces. Waitr has reiterated the company’s pledge to grow in the state of Louisiana.
The gist: Bobby’s Country Cookin’ in Little Rock, Ark., filed suit in April, claiming the food delivery platform boosted its contracted take rate without notice in a bid to puff up revenues ahead of its 2018 IPO. The suit was filed in Lake Charles, Waitr’s home base.
The gist: This is the second collective action suit against Waitr filed by delivery drivers alleging the Lafayette-based food delivery platform doesn’t pay minimum wage.
New Orleans driver Autumn Montgomery says she earned $1.97/ hour when driving expenses were factored in. Her federal complaint claims she drove 279 miles on less than 30 hours of work each week. Using the IRS benchmark of 54.5 cents per mile, it cost her an average $5.28 per hour to drive for Watir. Montgomery retained Lafayette attorney Chris Zaunbrecher to sue, filing a collective action claim in Louisiana’s Eastern District on March 8. The suit also brings state claims.
Another Lafayette-based attorney, Kevin Duck, is trawling to attract drivers for a suit.
Montgomery’s claims mirror those filed by two drivers in February. The crux is that Waitr drivers are paid $5 or $6 an hour plus tips but aren’t reimbursed mileage. Waitr drivers have big delivery zones in secondary markets, so when the pay dips and the drives are long, their earnings drop below minimum wage, a violation of federal law. Or as Gizmodo put it. “Waitr delivery drivers say they’re being screwed, too.”
“Some of these people are essentially paying Waitr to work for them,” said Carter Hastings, one of the attorneys representing Jualeia Halley and Heather Montgomery in the February suit. “But since it’s wear and tear, they don’t typically realize it.”
At issue is the Fair Labor Standards Act, which sets the federal minimum wage at $7.25 an hour and requires employers to pay workers “free and clear” of their costs of working. This is also called the “kickback” rule.
Gig economy companies like Waitr are targeted for labor violations all the time, although Waitr’s case is somewhat unique. Virtually all of Waitr’s drivers are W2 employees, not contractors, which exposes the company to the kickback rule. Its competitors, like GrubHub and DoorDash, have more commonly been sued for “misclassification,” essentially, treating independent contractors like employees. Both of these suits make misclassificaiton charges against Waitr, also.
Domino’s franchises have paid out millions on kickback violations. A rash of cases against Domino’s have been filed. Around 100 drivers in Cincinnati were awarded $1 million last year.
Collective action means opt in. That tends to limit the number of claims that would affect Waitr, should the suits go forward. Waitr employs approximately 8,000 active drivers, but the prevailing suit would capture former drivers as far back as 2016, too. The benchmark opt-in average is around 20 percent of a class, but the numbers vary wildly by industry or employer. Some 40 drivers in Texas, Louisiana and Alabama have opted into the Halley suit, many from Lafayette.
Two Waitr drivers say the fast-growing food delivery app company paid them and potentially thousands of other drivers less than minimum wage in a collective action suit.
The gist: Preliminary 2018 financials show incredible growth both in Waitr’s existing operations and those associated with Bite Squad, a midwestern competitor the food delivery company bought last year.
With big news at Waitr bookending our first year publishing, beginning with its blockbuster sale to a Texas billionaire and ending with CEO Chris Meaux ringing the Nasdaq bell, 2018 has been a year of extremes.
The gist: Waitr announced this morning that it acquired Bite Squad, an online ordering and on-demand food delivery platform for restaurants, for $321.3 million.
Wasn’t Waitr just bought for $308 million? Yep, that was announced back in May and the deal was only finalized on Nov. 16. So less than a month into being a publicly traded company, Waitr has effectively doubled in size. Bite Squad has more than 11,000 active restaurants, compared with Waitr’s 7,700 restaurant partners as of Sept. 30 of this year.
Waitr gets swoll. With this deal, Waitr’s operations will expand to cover a total footprint of 500 cities in 22 states.
Where’d they get all that cash? Landcadia Holdings acquired Waitr for $308 million, but only $50 million of that was guaranteed cash. At that time, Landcadia Holdings was a special purpose acquisition company — a type of entity set for the sole purpose of buying another company — that had raised $300 million. So when Landcadia Holdings became Waitr Holdings, it still had about $250 million left to fund growth. While this deal for Bite Squad was for $328 million, only $202.1 million of that was in cash with the rest paid with 10.6 million shares of Waitr stock. Plus, to help finance a portion of this deal, Waitr has taken on $42.1 million in debt.
This may only be the beginning. Tilman Fertitta — the billionaire co-owner of Landcadia Holdings, the Houston Rockets and Landry’s Inc. — has a track record of growing his businesses through acquisitions. And Chris Meaux — the CEO and cofounder of Waitr — wants to build Waitr into a billion dollar business. So if I were a betting man, I’d say that this won’t be the last major acquisition they make. And that’s potentially great news for Lafayette.
Am I rich yet? Not unless you were one of the original shareholders. The news hasn’t had much of a net impact on the stock price yet, for those of us who have only been able to buy in more recently. (Disclosure, I own some stock in Waitr.) Yesterday, Waitr Holdings’ stock (listed as WTRH on the Nasdaq) ended the day at $11.44. While shares spiked to $12 first thing this morning, they settled back down to $11.48 as of 2 p.m. So I’d hold off on buying that ticket to the moon.
We’re witnessing a changing of the guard, and Waitr’s splash on the NYSE is the latest indicator in the trend.
The gist – If you want to buy stock in Waitr before it goes public, today is your last chance. Waitr is scheduled to complete its agreement for a business combination with Landcadia Holdings tomorrow and go public Nov. 16 on the NASDAQ stock exchange under the ticker WTRH.
What’s Landcadia Holdings? Landcadia Holdings is a special purpose acquisition company formed two years ago by American billionaire Tilman Fertitta to raise $300 million through an IPO to invest in acquiring companies. Over the summer the company announced its intent to acquire Waitr for $308 million ($50 million in cash and $258 million in stock) and rebrand itself as Waitr Holdings.
How can I buy Waitr stock before it goes public? Simple: by buying stock in Landcadia Holdings, which is listed under the ticker LCA on the NASDAQ. While you’ll be buying stock in Landcadia Holdings this week, once the vote is approved by its stockholders at a special meeting tomorrow, Landcadia Holdings will become Waitr Holdings with Waitr as its subsidiary.
But should I want to buy stock in Waitr? We don’t provide investment tips at The Current, (you wouldn’t want us to) but it’s worth noting that Waitr is experiencing incredible growth. In the 3rd quarter alone of this year, it grossed $77.7 million in food sales, which represents a 230 percent year-over-year increase. It now serves 235 cities and 7,700 restaurant partners. Also, once this deal is finalized, Waitr will have about $200 million on its balance sheet to invest in additional growth. This growth could come in existing markets, expansion into new markets, or in considering acquiring competitors or complementary companies.
How big of a deal is this to Lafayette? Regardless of whether you decide to invest in Waitr, there’s no denying this is a potentially huge deal for Lafayette. Our market isn’t home to very many publicly traded companies of any sort, let alone those with the growth potential of Waitr. Ideally what will happen next is that there will be incredible demand for Waitr stock, which will increase the price of shares and thereby increase the wealth Waitr’s creating in our community. From there Waitr could leverage its capital infusion to continue its exceptional growth, so that it evolves from a company worth hundreds of millions to one worth billions. These kind of wins are crucial for a still sluggish local economy. — Geoff Daily
▸ The gist: On Tuesday, the Lafayette City-Parish Council voted to approve the creation of a new public trust, called the Lafayette Public Innovation Alliance, and seat its first trustees. They were approved to serve five-year terms by the City-Parish Council. Future trustees will be nominated by the mayor-president and approved either by the city-parish council or, if the proposed charter amendments pass, by the parish council. Robideaux named Lafayette Parish the beneficiary of the trust.
▸ The trustees are:
- Chris Meaux – CEO of Waitr
- Bruce Greenstein – EVP, chief innovation and technology officer at LHC Group
- Mandi Mitchell – assistant secretary of Louisiana Economic Development
- Ramesh Kolluru – VP for research, innovation and economic development at UL Lafayette
- Joel Robideaux
▸ Uh, what do they do, exactly? The primary goal of this trust is to produce and attract more technology and software development talent in Lafayette. There are no local public dollars being invested into the trust at this time — although Robideaux did offer to throw in the first $100 if that was required to make it kosher. The intent is to leverage the trustees’ contacts nationwide to find grants and get the trust funded and off the ground.
“Certainly any effort regarding a Lafayette-based cryptocurrency would naturally fit within the goals of the trust as I see them,” Robideaux wrote in an email. “More specific, if Lafayette develops a digital token and that token can generate seed money for the trust, then I would be elated.”
▸ What to watch for: Innovation districts. Robideaux indicated the fund could finance innovation districts that would help the region attract new talent. “We need to produce more talent locally, or implement a strategy to attract talent from other places…specifically technology talent,” he said at the meeting. While there was nothing specific about what that might entail, the idea resembles similar efforts underway in Chattanooga, which claims to be the first mid-sized city to establish an innovation district.
How CGI is doubling down on Lafayette’s digital economy It's not just about jobs
While headlines have focused on the creation of 400 jobs, there’s a lot more to unpack about the benefits to Lafayette’s digital economy.