The restaurant industry has been adapting to new technology at a rapid pace -- but we hardly notice, and that’s a good thing. New technology is a risky proposition. Sudden shifts can alienate consumers who are not interested in adapting to new ways of doing things. Over time, however, we’ve seen restaurants adapt to technologies that now seem commonplace -- online ordering, crowdsourced reviews, tablet-based POS systems (Toast, Square), and so on.
In a move that goes hand in hand with the cashless movement, some of these restaurants have also been rolling out order ahead apps, where consumers can place their order and have it ready by the time they arrive. Clover’s is in beta, while Sweetgreen, Chipotle, and Boloco all have order ahead functionality in their respective apps.
The nascent movement of cashless business is but one piece of the restaurant industry’s changing strategies. Recently, a new trend has seen notable restaurants begin to test out no-tipping policies. Tipping has long been a cornerstone of the industry, allowing restaurants to keep food prices lower by shifting the responsibility of front-of-house labor costs to customers. Though tipping has its advantages -- for example, making it possible for service staff to make a livable wage -- it has a fair share of downsides as well. Restaurant labor is lopsided, with laws in place that prevent back-of-house staff from receiving tips. Tip-pooling practices that aim to distribute tips evenly, though a good idea, cause their own problems -- uneven work, lower wages, etc.
In any case, growing awareness of restaurant industry economics can only be a good thing. Whether the future is tipped or not, ensuring staff are remunerated fairly is a excellent starting point in reforming an industry that has a spottyhistory of labor practices.
If the idea of sitting down for a tip-less meal that you can only pay for with a credit card has you pondering the future of the humble restaurant, consider something else: delivery-only.
With Ando, which recently closed a Series A financing round with $7 million, David Chang has jumped on a relatively new trend -- delivery-only restaurants. Start-ups with a similar concept have been gaining ground, too. Look at companies like Munchery and Sprig. Instead of investing capital in real estate, design, and labor, delivery-only food promises the chance to run a “restaurant” at a much lower cost. Since there is no retail space, all you need to invest in is a team of cooks and drivers, a chef, ingredients, and a space large enough to house an industrial kitchen. The typical restaurant concerns -- prime real estate, service staff, and decor -- mean nothing.
In urban areas, this concept shows a lot of promise. Imagine being able to order fresh, delicious, and constantly changing food at prices that seem comparatively low. Keep in mind, this segment of the market is still very new. However, delivery-only food has immense potential to disrupt the traditional ways that restaurants operate.