By Harini Chakrapani
Brent Kirkpatrick cheers New York’s decision to phase in a $15 minimum wage increase.
“I have been underpaid for majority of my restaurant life. It is fair to take into account what the cost of labor is,” said Brent, 45, who makes crepes at Creperie, a restaurant in Greenwich Village, New York.
But now, as a proponent of the minimum wage increase he is in awe of technology that made the delivery guy’s job redundant.
“The delivery guy was getting paid by the hour and would sit here without any deliveries. That’s six to nine hours without working, not worth it for the employers and employees,” said Brent.
Creperie availed the services of online food delivery providers Caviar. Caviar has its own delivery team and is connected to Creperie’s orders via a tablet application. When a customer places an order, Caviar picks up the order from Creperie and delivers directly to the customer for a flat fee.
“Technology is less likely to make the type of errors humans make while taking an order. Mobile/ tablet applications are an organized, efficient and accurate way of handling deliveries as opposed to a person answering the phone. The interface is better,” said Brent.
From small dessert joints such as Creperie to large chains such as Panera Bread, Chili’s and Applebee’s that have automated their food ordering and payment services with touchscreen tablets, technology is making in-roads into the restaurant industry. Now, worries are mounting that technology could take away human jobs.
The argument is simple enough: how can restaurant owners continue to enjoy their profits while meeting the increase in labor costs?
“The prices of products will go up. There will be more pressure on restaurants to limit employment,” said economist Harry Holzer, professor of public policy at Georgetown University.
According to Albany, New York based non-partisan think tank Empire Center the labor costs are high. In a study published in November, it concluded how the $15 an hour wage increase could threaten the economic well-being of 3.1 million workers by eliminating 432,500 jobs.
“One of the ironies here is that it is the big corporations like McDonald’s that will have the easiest time automating their services. People that will be hit the hardest with these wage increases will be the mom and pop restaurants that won’t have the capital to do it or the ability to do it on scale,” said Ken Girardin, policy analyst at the Empire center.
Two years ago, Chili’s embraced automation by allowing customers to order and pay their bills using using the 7-inch android tablets sitting atop their tables instead of paper menus.
Texas based startup Ziosk that developed the technology for Chili’s tablets had only wanted to solve a basic problem with restaurants while offering its product.
“On a Friday or Saturday night, restaurants can get very busy, even if they have a large number of staff, to serve all the customers. A lot of people want to pay and leave around the same time, and they just can’t,” said John Regal, chief strategy and product officer of Ziosk.
Ziosk’s tablets feature an in-built printer, a 22-hour long lasting battery, a camera and an interface with food pictures and games.
Its business model is attractive. It doesn’t bill restaurants for the cost of the tablets or installation. Instead, it charges a subscription fee for its service which includes games.
Ziosk has been successful, deploying about 65,000 tablets in more than 1,250 restaurants in all 50 states.
With food ordering and payment being automated, the threat to a server’s job seems real. But, John Regal insists Ziosk is only a server assistant, helping servers during peak times.
“When you order a burger there are a lot of questions to be answered: how do you want your burger cooked, do you want cheese on it, if you have any dietary restrictions. In these cases, a server can be faster than technology in trying to figure out the right order,” said John.
Companies like Domino’s and Panera Bread have expanded their scope with technology.
Panera Bread lets customers order food online from their office, car, work or home up to five days in advance and pick up at a scheduled time without waiting in line.
Domino’s Australia wants to replace delivery drivers with its four wheeled bots called the Domino’s Robotic Unit (DRU).
It doesn’t stop there. With every passing day, technology is getting smarter, expanding its electronic presence into areas that have been accessible only to humans.
Makr Shakr, an Italian based company co-founded by engineer Carlo Ratti, professor at the Massachusetts Institute of Technology introduced its robot bartenders in 2013.
Makr Shakr’s robot arms programmed to mix cocktails have caused quite a stir within the robotics community.
According to a spokesperson, the company today serves Royal Caribbean cruise ships and is set to promote a portable version of its bar system.
Others remained skeptical about how far robots could go in displacing human hands from the bar or kitchen.
“People can do jobs that are far more complex than a robot. Robots can be useful in doing some simple delivery tasks that can be automated. They can’t replace a person, but free up the time of a person so that they can do the more high value part of the job, which is face to face customer service,” said Andra Keay, Managing Director of Silicon Valley Robotics, a non profit San Francisco based industry group, that supports innovation and commercialization of robotics technology.
But according to economist Harry Holzer, who previously served as chief economist of the Department of Labor restaurants, in particular fast food chains seemed conducive to robotics automation.
“The easiest jobs to automate are the ones that involve very routine, repetitive, activities. Fast food is very routinized. There are only so many ways you can make a big mac—spread the sauce on the bun, cut up the lettuce and tomatoes,” explained Harry.
Whether or not robots become the cause for human unemployment remains to be seen. But for now, it seems clear that restaurants are in a rush to automate as a response to the increase in minimum wages.