Part 1: Another economic indicator


By Bill Taylor



It seems to me that the government, businesses, politicians, market investors, and lotsa other folks are concerned with how the economy is doing. To that end different ways of measuring or estimating its “health” have been devised such as the number of unemployment claims, the Dow-Jones and other stock market values, the availability of jobs, and so on. These usually involve gathering huge amounts of data and then applying digital processing techniques to come up with results. On the other hand, readers with extraordinary memories may recall that some years ago I proposed a much simpler economic indicator that I called “The Eating Out Index” – which I will recap for those who don’t recall or never heard of it before.

The gist of this concept was that in good economic times folks have more discretionary income, that is, money not allocated to basic necessities such as food, shelter, transportation, and medical expenses. I noted, “When things are better and more money is available, we can afford to splurge a bit. One way we do this is to eat out instead of eating at home … .” Eating out is more expensive than eating home prepared food, but with some extra money to spend, why not indulge.

I identified different categories of “eating out” establishments such as “drive up” facilities where the food is prepared with no particular customer in mind; the tableware such as eating utensils, plates, and drink containers are disposable; and food is dispensed from a window or a counter. There is no tipping and the food may be either eaten on the premises or taken out.

The second category, the “sit-down / server” type, is a facility where the customer is seated at a table or booth; a “server” takes the customer’s order; and the food is delivered to the customer and eaten on the premises although “doggie bags” for leftovers are common. The tableware, eating utensils, plates, and drink containers are not disposable, and tipping the server is expected. The food is usually prepared in response to the customer’s order although certain dishes may be prepared in advance. Eating at this type of restaurant is more expensive than either eating home prepared meals or those from a “drive up”.

I concluded that we can make can “eyeball assessments” of the economy by a cursory observation of these facilities noting, “When we see long lines at the drive up windows and table after table of families eating at a ‘sit-down/server’ restaurant, these are indicators that the economy must be in pretty good shape.” A simple and straight forward way to guestimate the condition of the economy, right?

Okay, so what? Well, a new wrinkle in “eating out” has emerged and has complicated the “eating out index ” evaluation process. I don’t know what to call this development but I have heard it’s part of the evolving “gig economy” a term reportedly derived from short term musical performances known as “gigs”.

Anyway, the basic concept of this fairly new arrival on the “eating out” scene is that a customer can order from a restaurant menu and have the food delivered. Oh, sure, we’ve had home and office delivery by pizza places for some time, but this service is considerably different. For one thing pizza companies produce or otherwise acquire the items they deliver to their customers or sell at their stores. These new companies are not in the food production or acquisition business and have no stores to service their customers.

In addition, pizza delivery drivers are employees of their company, paid an hourly minimum wage, rely on tips for a good portion of their income, and have their work hours decided by the company. None of these apply to these new companies as their drivers are not company employees but are “independent contractors” who do not get an hourly wage, who set their own hours, and do not rely on tips. Furthermore, although both sets of drivers use their own vehicles to make deliveries, the “independent contractors” may claim their mileage as a business expense for tax purposes, whereas the pizza company drivers may not. Quite a difference isn’t it?

You know, I find intriguing how enterprising folks can somehow identify a need or want, develop a way to meet that deficiency, and make a profitable business from the effort. Perhaps that’s why, when I became aware of these meal delivery companies, I decided to look into how they work. Next time I’ll share the details of the melding of sophisticated digital processing and interfaces involving customers, restaurants, a centralized control center, and drivers – and why this development is messing with my “eating out index.” It’s a fascinating story. At least that’s how it seems to me.

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By Bill Taylor

Bill Taylor, a Greene County Daily columnist and area resident, may be contacted at solie1@juno.com.

Bill Taylor, a Greene County Daily columnist and area resident, may be contacted at solie1@juno.com.