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Automation Coming To Restaurants, But Not Because of Minimum Wage Hikes
dcblogs writes: McDonald's this week told financial analysts of its plans to install self-ordering kiosks and mobile ordering at its restaurants. This news prompted the Wall Street Journal to editorialize, in " Minimum Wage Backfire," that while it may be true for McDonald's to say that its tech plans will improve customer experience, the move is also "a convenient way...to justify a reduction in the chain's global workforce." Minimum wage increase advocates, the Journal argued, are speeding along an automation backlash. But banks have long relied on ATMs, and grocery stores, including Walmart, have deployed self-service checkouts. In contrast, McDonald's hasn't changed its basic system of taking orders since its founding in the 1950s, said Darren Tristano, executive vice president of Technomic, a research group focused on the restaurant industry. While mobile, kiosks and table ordering systems may help reduce labor costs, the automated self-serve technology is seen as an essential. It will take the stress out of ordering (lines) at fast food restaurants, and the wait for checks at more casual restaurants. It also helps with upselling and membership to loyalty programs. People who can order a drink refill off a tablet, instead of waving down waitstaff, may be more inclined to do so. Moreover, analysts say younger customers want self-service options.
"automation backlash" aka increased productivity is fantastic for the economy .
I mean, maybe I'm just harking back to a past that exists only in my mind, but I seem to recall a time when the journal actually covered business in its pages, rather than regurgitating neoclassical economics talking points all-day every day, attempting to construe every single negative thing as a result of failing to religiously adhere to its principles.
Am I misremembering, and imagining the shift from kinda disagreeably right-leaning to fanatical?
This goes further to demonstrate that automation will take over many menial jobs in my lifetime. This leaves us with a problem - what to do with all the unwanted and unskilled labor? Skilled worker's salaries have not kept up with productivity gains, as such there is no chance they could support service-based economy to offer unskilled workers a living wage.
Sadly, the likely outcome is drop in the quality of life for everyone involved.
Dammit, I want my 80s cyberpunk sit at the table, order from computer (bonus points for miniature holographic waiter who appears in middle of table), and food is delivered out of hidden conveyor system experience!
Vintage computer games and RPG books available. Email me if you're interested.
Good staff knows how to upsell. That extra appetizer, dessert, beer, etc. Will it be as effective as static ads on UIs?
But basically any jobs replaced will be the most robot jobs in the first place. Just like long ago the most repetitious jobs on assembly lines were replaced by robots and now how the most repetitious jobs in IT are becoming automated. Book keeping is already automated but I can see a time when tax accounting coupled with rules engines and data mining could remove many corporate tax attorney and accounting jobs. Taxes are just rules after all. You might need a few people coverting the tax code to standard set of rules for an optimization engine but the days of large staff pouring over tax laws may be numbered.
But it is just like the WSJ to blame one insignificant factor. There are other factors at play and their coverage is not fair, balanced, well reasoned, or complete.
putting the 'B' in LGBTQ+
I want every person who is willing to work full-time to be able to earn at least poverty plus a dollar. I don't care about the skill level of the employee. In this way I ama liberal.
I recognize that you cannot put artificial price controls in place and expect the market to just absorb it. In this way I am a conservative.
My best solution is that we have a tax on the wealthiest to subsidize those that don't have skills that don't allow them to hit pverty level. Some subsidy that will bring lower earners up, but not discourage them from trying to make more.
My rationally is that people are much more productive than they were 100, 50 or even 20 years ago. Part of the promise of automation is that everyone would benefit... shorter hours... higher pay. This never materialized. So, I am fine with a level of socialism for those who are willing to work but cannot make ends meet.
-- MyLongNickName
Currently, the way it's implemented in european country, McD doesn't use it to reduce workforce (you're still required to walk up to a clerk to retrieve your order).
McD uses it to accelerate it service and increase the "number served": by the time you finish typing your order and have confirmed, the order is already broadcast to employee's screen. By the time you finish paying and walk to the queue, your order is already ready.
This cuts drastically the waiting time, and european McD's use to cram more customer served per minutes.
In the long run such stategies won't neceessarily reduce the workforce that much, but on the other hand, they will be used to propel "fast food" to a whole new definition of "fast".
On the other hand, that will probably be quite alienating for the workforce: no more breaks between customers, no more small talk while ordering. Work experience is going to be Charlie Chaplin's "modern times"-style: read the screen, pack the bag, hand over the bag, as fast as possible and repeat so the next customer doesn't need to wait.
"Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
Plenty of cheaper restaurants here in Japan - chain izakayas especially - have used terminals for ordering for years already. And while they certainly do it in part to reduce staff, the fact is that many customers like it. You don't have to flag down a waiter to place an order, and you can always see exactly what you've ordered, what dishes you've yet to receive and your current tab.
Also, the basic truth is that if your job can be automated, no wage level will compete with it in the long run. If you accept wage cuts to avoid being replaced by automation, you've only bought yourself a few years, and at a lower salary than you're worth at that.
Trust the Computer. The Computer is your friend.
In contrast, McDonald's hasn't changed its basic system of taking orders since its founding in the 1950s
When I was a kid in the 1970s, I remember the order-takers at McDonalds would take the order down on a paper pad, then in seconds add it all up with a pencil and present you with the total.
Wonder if the cashiers would even be able to do that today...
I have said for many years that, with an appropriate restaurant-savvy partner, I'd like to open an automated restaurant. In-table PC's to order things, with card-readers.
I don't want to wait for the waiter to come over until I can order a drink. I might have driven a long way and be gasping of thirst before I care about a menu. Press, press, done before I've even taken my coat off.
I want to see the whole menu. The ingredients. A picture. The price. The associated special offers. Does it have pepper on it? A fully interactive menu would be great, and not be covered in the gravy-stains of the last patron, or have bits scribbled out on it. Plus, when something is no longer available, bam, you can't order it. I could even press the "I have an allergy button" and see if anything is incompatible with that without relying on the waiter to run back and forth to the kitchen.
I might want to tip one member of staff, but not know their name (or they happen to have finished their shift by then). Press "tip", select staff member photo (or select "All staff"), type in a reason, swipe card, done. And no arguments over who I intended it for.
I might well want to pay for my own stuff and not have to wait for the end of the meal and argue with friends. Or order a slice of cake to take home as a last minute thought after I've paid. Or split the bill via various common calculations. Or even tag five items as what John has to pay and let him pay that off the bill because he has to leave early. Press, press, swipe. Done.
I might wall desire a human to talk to, if something cocks up. Big green help button lights up the table, which summons a waiter, much like airplane call buttons. The waiter still has to be around to shuttle things from the kitchen, and this way seems easier - and politer - than having to flag him down as he passes with a table full of plates. Press, done.
I might well decide to change the order mid-flow. So long as the kitchen hasn't started on it yet, why not? Until the order's locked in, I can alter it. And I can even "lock" certain portions if one person at the table wants the starter now while the others only want mains and want to argue over it. Press, press, done.
I might want to pay first, or pay once I've eaten everything. I can choose.
I might want to buy some wifi access, or get a code for the toilet (I disagree with limiting toilets to paying customers only, except on an honesty agreement, but some places do just that and your receipt contains your code for the toilet), or donate to the charity associated with the restaurant, or buy the chef's recipe book. Press, press, swipe, done.
I might want to move tables mid-order, or take my drinks outside. Press, press, done and the waiters and kitchen automatically know where I am.
The back-end? The waiters still wait. The bar tabs are still on the EPOS. The kitchen still gets a ticket about what table wants what. And those that want manual service press one button.
We've already automated every part of the experience but the customer's.
I live in France and these things are in every McDonalds already. I did not realize that they were not common elsewhere.
Ordering at a self-service kiosk is convenient because few people uses them, so usually there's no queue. This may be related to the fact that they only take cards. Ordering from the kiosk also prevent misunderstandings.
I've also used their mobile app and their website to order (for pick-up, they don't do delivery) but the benefits are minimal compared to ordering from the kiosk. Paying with a card on a mobile phone is annoying, especially when 3D-Secure kicks in and I have to copy the confirmation number from the SMS to the app. I'm sure that for McDonalds the main benefit of the mobile and online offerings is that they lock in the customer and prevents her/him from changing their mind on the way to the restaurant (but not really as you pay only if you collect the meal).
Nobox: Only simple products.
I actually do really like it, for exactly that use case. Considering that the process of settling the bill at a restaurant consists of:
1. Get the server to pay attention to you, and ask for the check
2. Have them deliver the check, and (as if by policy) say "take as much time as you like" and vanish
3. Have them notice that you've put down a card, and take it
4. Have them return with the receipt, you sign, and leave.
Usually steps 3-4 are near instance. However, steps 1-3 can take way too long sometimes.
(I wish doing 2 and 3 within the same minute was possible, but that's rare.)
Peter Schiff wrote a very eloquent piece explaining why minimim wage hurts the economy, job growth, and especially the young, unskilled and minorities. Here is part of it:
Low-skilled workers must compete for employers’ dollars with both skilled workers and capital. For example, if a skilled worker can do a job for $14 per hour that two unskilled workers can do for $6.50 per hour each, then it makes economic sense for the employer to go with the unskilled labor. Increase the minimum wage to $7.25 per hour and the unskilled workers are priced out of their jobs. This dynamic is precisely why labor unions are such big supporters of minimum wage laws. Even though none of their members earn the minimum wage, the law helps protect their members from having to compete with lower-skilled workers.
Employers also have the choice of whether to employ people or machines. For example, an employer can hire a receptionist or invest in an automated answering system. The next time you are screaming obscenities into the phone as you try to have a conversation with a computer, you know what to blame for your frustration.
There are numerous other examples of employers substituting capital for labor simply because the minimum wage has made low-skilled workers uncompetitive. For example, handcarts have replaced skycaps at airports. The main reason fast-food restaurants use paper plates and plastic utensils is to avoid having to hire dishwashers.
As a result, many low-skilled jobs that used to be the first rung on the employment ladder have been priced out of the market. Can you remember the last time an usher showed you to your seat in a dark movie theater? When was the last time someone other than the cashier not only bagged your groceries, but also loaded them into your car? By the way, it won’t be long before the cashiers themselves are priced out of the market, replaced by automated scanners, leaving you to bag your purchases with no help whatsoever.
The disappearance of these jobs has broader economic and societal consequences. First jobs are a means to improve skills so that low skilled workers can offer greater productivity to current or future employers. As their skills grow, so does their ability to earn higher wages. However, remove the bottom rung from the employment ladder and many never have a chance to climb it.
So the next time you are pumping your own gas in the rain, do not just think about the teenager who could have been pumping it for you, think about the auto mechanic he could have become – had the minimum wage not denied him a job. Many auto mechanics used to learn their trade while working as pump jockeys. Between fill-ups, checking tire pressure, and washing windows, they would spend a lot of time helping – and learning from – the mechanics.
You can read the entire thing here:
http://www.europac.net/comment...
Point of fact: McDonalds as a corporation doesn't sign those peoples' paychecks, at least if their business model hasn't changed since 2000ish. They do franchising, and make money on the fact that franchises have to purchase supplies from the company. This allows them to dodge risk on opening in poor locations, or personnel expenses.
Actually, this isn't how McDonalds corporate works.
The way McDonalds works is it picks your location for you, buys it, builds a McDonalds there, and guarantees you your franchise buy-in back in one year. The franchise buy-in is $1M, which you get back in one year, and then you make that each year thereafter.
They *do* sell you trade dress items - fry boxes with the 'M' on them, and they sell you food supplies - but their primary profit actually comes from their real estate holdings, the fact that they are your landlord, and franchise fees.
Once they do sell you a franchise, they dictate your trade dress, which means corporate pays for remodeling the individual franchise stores (after all, McDonalds themselves owns the property), and when they tell you remodel, expect the crews to show up and just do it, you are at best granted minor choices on things like arrangement of the bathrooms, and the manager's office, and so on. Otherwise, they dictate. This is a typically good thing, since they know how many people will go through in a given amount of time, max, because they have a PhD in mathematics who understands queuing theory work it out.
In addition, you can't buy a franchise unless you have been a store manager, and you can't be a store manager unless you've been an assistant manager, and you can't be an assistant manager unless you've been a shift lead, and you can't be a shift lead unless you've been an ordinary employee. In other words, every step in responsibility requires that you be able to do all the jobs at the previous step in responsibility. This is why when they have walkouts, they typically don't close down over them.
So it's not like this will change the need for employees, from the line on up, or they'll have no new franchise owners, unless they totally rework their entire model. Which they won't do, since their primary profit comes from real estate, them being your landlord, and franchise fees.
This really has nothing to do with the Minimum Wage issue; that's just because the author of the opinion section piece that the OP referenced, since they could care less.
They did however throw $200M in venture funding behind the company providing the automation software and equipment a few years back. Time to recoup their investment there.
Assume that the minimum wage is raised to $15/hr and McDonald's decides not to automate. Many of the current minimum wage workers will be replaced with an equal or smaller number of workers who are more productive. The guys holding the picket signs and protesting will most likely not benefit from the raise. They will have to compete with a larger pool of skilled applicants who will work harder and smarter to get the job done. The people laid off or replaced will find that the minimum wage raise they protested so hard for cost them their job and strains their ability to keep up with what unemployment and welfare pays as cost increase to the balance the new wages.
I only look human.
My mother is a halfling and my dad is an ogre, so that makes me an Ogreling
You do realize that people aren't, you know, actually, like, supposed to be able to support themselves with the lowest-paid jobs in the country? These are the kind of jobs that used to be done by kids still living at home, not those who expected to make a career and raise a family by saying 'Do you want fries with that?' a thousand times a day?
But with today's fucked economy, that's the only type of job many adults with kids, rent and car payments can find.
Our society has deep structural problems relating to automation that have been ignored for forty years and those chickens are coming home to roost. One of those major problems is that we've given preferential tax treatment to capital gains over income (labor).
We can either have egalitarian democratic society, or we can be like Mexico. I hope the walls on your gated community are high enough and you pay your private security contractors enough not to steal from you.
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
I'll have to stand behind said idiot while they try to figure out what buttons to push
Kiosks are cheaper than employees and are "always on". They don't take breaks, they don't call in sick, and their shift doesn't end at 8pm. So instead of standing in line waiting for one human order taker, you will have a choice of six or eight kiosks. If you are there in the middle of the lunch hour rush, when all the kiosks are busy, then you can order on your cellphone. Even better, you can order, and pay, on your cell before you arrive, so your order is ready for pickup when you arrive.
After auto-ordering is established, the fast food joints can change their drive-through-window policy to be pre-order only. So you pre-order, and pre-pay, on your cell, get a beep when your order is ready, then pull up, grab your bag, and go. The transaction time will be reduced from minutes to seconds, saving people time, and most likely boosting business for the restaurants.