A soaring minimum wage is forcing L.A. restaurateurs to think hard about how – and even whether – they use front-of-house employees.
Yet while technology continues to push the boundary of what were once exclusively human endeavors, industry insiders say customers should not expect their friendly neighborhood server to be replaced with touch-screen kiosks anytime soon. Instead, technology will likely be incorporated in a much more nuanced way.
For example, when Japanese fast-casual chain Ramen Roll opens this spring in Culver City, the restaurant’s servers will take down orders and charge meals using a tablet-based point-of-sale system developed by New York’s TouchBistro Inc.
“Servers actually spend half their time at the point-of-sales systems,” said Andy Gavin, who co-owns the restaurant with Umami Burger founder Adam Fleischman. “We hope (iPads) will improve the experience by speeding things up and giving the waiters more availability on the floor.”
But rising labor costs could force some eatery owners to turn to automated solutions sooner rather than later. According to Uday Karmarkar, a professor at UCLA’s Anderson School of Management, labor represents 25 percent to 35 percent of a restaurant’s operating expenses.
“Moving the minimum wage from $10 to $15 an hour is a 50 percent increase on those costs,” said Karmarkar. “They are between a rock and a hard place.”
Under California’s Fair Wage Act of 2016, the state’s minimum wage will rise incrementally until hitting $15 an hour in 2022.
To recoup the costs, restaurants might consider raising food prices, doing away with tips, implementing a service charge, or saving labor costs through automation, said Ken Kaufman, owner of Culver City’s Kaufman Restaurant Group, parent company of City Tavern and Rush Street.
While diners and staff will both likely encounter more computers going forward, technology is no cure-all, Kaufman cautioned.
“There’s no doubt in the state of California that all of this going to be tried in the next two or three years,” he said. “However, with too much automation you are missing that personal touch that increases check averages.”
Kaufman’s 5-year-old City Tavern could be considered an early adopter of restaurant automation. Its Culver City location has touch-screen-controlled beer taps in three booths that charge customers’ credit or debit cards based on how much alcohol is dispensed.
However, customers still seem to prefer drinks from a bartender, said Kaufman, mostly because employees are much more knowledgeable about the gastropub’s offerings.
“What I see in my restaurants is that people say, I’d like a pilsner. What do you have in pilsners?” said Kaufman, who noted those interactions also help the bottom line. “Servers are not just order takers – they are not just machines – they are trained to upsell. That’s a very important part of the restaurant business.”
While technology won’t replace workers completely, it does show promise in increasing productivity, said Jerry Prendergast, founder of Culver City restaurant consultancy Prendergast & Associates. For example, waiters equipped with handheld terminals could allow restaurants to cut down on employees and increase efficiency.
“Instead of the servers on the floor only being able to handle three or four tables directly, they can now handle five or six tables,” said Prendergast, adding that further time can be saved by coordinating food delivery with a runner. That way, server attention is more focused on serving the customer than running off to get drinks.
Upscale restaurants aren’t the only ones getting in on the automation trend. Some fast-food restaurants in Los Angeles, such as Roy Choi’s Locol in Watts, have implemented touch-screen ordering to reduce labor costs., said Max Roper, chief executive of Appetize, a Santa Monica point-of-sale device seller for stadium venues. More could be on the way.
“I think there are certain restaurants that could go that direction, like In-N-Out, where the menu is simple,” he said.
Amazon.com Inc. will also officially launch a cashierless convenience store called Amazon Go in Seattle early next year. The store will charge Amazon Prime customers via a mobile app as they pick items off the shelf.
That sort of self-serve technology doesn’t work well in restaurants with more complex menus and novel food and drinks, said Prendergast.
“The issues with that really come down to modification and how much does the customer know about the product they are buying,” he said, noting that one customer-ordering mistake can waste food and create duplicate work for the kitchen.
“That one table that screwed up their order now slows down the kitchen for the other 20 tables,” he said. “Is it really worth the labor savings when you’re really not reaping any benefit?”
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