Food delivery service Waitr will lay off all 219 drivers in the Beaumont area as it moves to a nationwide contract-only model for workers in April.
The Texas Workforce Commission on Thursday released details of a legally required notice from the company that it would terminate the employment of its drivers in Jefferson County and across the U.S. by April 6. The full- and part-time employees will not have an option to seek permanent positions in other markets where the company operates, the company said in an alert to the commission. They will be able to apply to work as a contractor.
Louisiana-based Waitr, which launched in the Beaumont area in summer 2016, has announced similar moves in other markets to boost revenue and give drivers more flexibility to choose when and how long they work. Spokesman Dean Turcol said employees were surveyed about which system they preferred.
“There were some areas that had contract models and others that were employees,” Turcol said. “Most said they wanted to go to a contract model.”
In most states, however, contract workers do not qualify for the same benefits and labor protections as traditional employees.
Pam Wise, workforce and community liaison at Workforce Solutions Southeast Texas, said the agency has reached out to the company headquarters and its local office to offer a meeting for employees to discuss unemployment benefits and career options, but hasn’t heard back from either.
Donny Avery of Beaumont, who worked for Waitr for about two years before leaving in 2018, said he was surprised to hear the company was eliminating employed drivers. He cited the inflexible work schedule as among the reasons he left the delivery service.
“There was a time when (Tropical Storm) Harvey hit when everything sort of changed,” Avery said. “I worked with them a lot after that because there were many drivers that lost their cars.”
He and a few other drivers at that time were still contract employees, Avery said, but the local office really wanted people to work either full- or part-time. The part-timers were encouraged to work 20 hours a week as often as possible, he said.
Avery said he was working other jobs at the time and left the company when Waitr eliminated contract positions.
Shares of Waitr have tumbled since it was listed on the NASDAQ in fall 2018 at $13 per share. The stock closed Thursday at 34 cents.
Founder and former CEO, Chris Meaux, stepped down in August and was replaced by chief operations officer Adam Price. Meaux is now board chairman.
Asset management companies BlackRock and UBS Group AG both announced earlier in the week that they each control more than 5 percent of the outstanding stock in Waitr.
Golden Nugget and Houston Rockets owner Tilman Fertitta’s publicly traded Lancadia Holdings acquired the company for $308 million in 2018. At the time, Fertitta was complimentary of the Waitr brand and its ability to grow.
By last summer, however, the dining and entertainment mogul was acknowledging the challenges of making a profit with such services.
“We’re doing all this business in home delivery and it’s not as profitable a business, but you have to do it right now,” he told the Houston Chronicle in July. “We tend to make things better and figure things out, and I think that’s what’s going to happen.”
A spokeswoman for Fertitta said Thursday that as an at-large board member who is not engaged in Waitr operations, Fertitta did not know enough to comment on the upcoming change for drivers.