A new tablet works well for customers and saves restaurants money, but could it mean the beginning of the end for the waitstaff?
This story has been corrected and updated. See note at the bottom of the story for details.
PALO ALTO -- Walk through the doors of Palo Alto's Calafia, located in a shopping center across the street from Stanford, and you're retracing the footsteps of giants. Steve Jobs and Eric Schmidt were once spotted talking shop there. Sergey Brin, Larry Page, and Mark Zuckerberg all frequent the place. Even James Franco, who admittedly is everywhere, has made an appearance at the restaurant run by Google employee number 53, the chef, Charlie Ayers. Ayers' book, Food 2.0, sits on a short pedestal near the front host's table.
When I sat down across from Rajat Suri, who dropped out of an MIT doctoral program in chemistry, so he could tell me about his startup, I could practically smell the Next Big Thing in the air. This is, of course, why he wanted me to meet me at this place, but we're not just there for the ambiance.
Suri gestures to a device that I've never seen that's sitting on our table. It sort of looks like a small iPad, maybe a thick Kindle Fire. Presto is its name. The screen shows an animation that says, "Touch me!" with half a dozen different animations. It's a menu and a way to order food and a method for paying the check all in one. The Presto functions like a better, more responsive version of the touchscreen food ordering system on Virgin America.
"I really like the pork buns," he tells me. "I'm a big fan of pork." I ask for another recommendation from Ayers' selection of rice bowls. He suggests the fiery bottom pork bowl with a quail egg on top, one of the restaurant's signature dishes. I love a quail egg, so I agree to order that.
With no instructions, I order the two items through the Presto. Beautifully lit photos let me see what I'm going to get. The UI is intuitive. Within 20 seconds, I've sent my order to the kitchen. Before we'd even finished eating, I swiped my card slightly awkwardly into the built-in payment slot, added a tip, and settled up. I would not say that this machine will blow your mind with its technical capabilities, but that's exactly the point: It just works.
I cannot say for sure that this will be The Future of your restaurant experience, but after talking with Suri, I'm convinced that some sort of automated ordering system will make its way into your dining experiences. And it's not because the technology is cool or whizbang or will draw customers. The real reasons are completely economic.
"It costs about a dollar a day per table, it can even go lower depending on if you have sponsors involved because all the alcohol companies want to get involved," Suri says. "For that, they get about $6 a day per tablet in increased sales. That's extra desserts, appetizers, drinks. They get about another $5 in extra table turns. If you can fit in one more table per night, that's worth a lot of money. And some restaurants, though not Calafia, get about
$45 $4, $5* extra because they choose to save labor."
So, at the minimum, we're talking about $10 a day more money coming in per table. And, if the restaurants choose to cut some employees because they have an automated ordering system, that trims a bunch of costs, too.
Those margins have meant good things for E La Carte, which is Suri's company. "A lot of our growth has been in the last six months just because awareness of the technology has grown a lot," Suri says. They now have tablets in 300 restaurants and he expects to be in 1000 by the end of the year, and 3000 the year after that.
In the past, automated ordering systems like this haven't made economic or social sense. Before the iPad, people didn't really get touchscreens. Now, most people are familiar with how to operate one. The costs of tablets' components have also come down, which benefits E La Carte. Suddenly, Suri's idea, which he hatched three years ago in Cambridge, is becoming a viable business.
I watch as two women a few tables away poke and prod the machine. They seem to be enjoying or at least tolerating the interaction, but then a waiter arrives at their table and they order from him. After I finish up with Rajat and Ayers, I sidle up to their table and interrupt them as gently as I can.
Margo Will and Lisa Jafferies are affable and willing to talk about their experience with the Presto. They were first-timers with the Presto.
"We started to order through it, even though we're so old," Jafferies laughs. "But then Josh, our waiter came up, and we just talked with him."
"But then we played a game on it," Will says, "And that was fun."
Both women agreed that the main advantage of the Presto was that the digital menu featured photographs and extended descriptions of the food items. They could really know what they were getting. "It's a good way to learn about what the food looks like," Will said. "It's visual."
They did worry, though, about the labor implications of the device: if you don't need waitstaff for taking orders, what do you really need them for? "There'll be no more waiters and I don't know who will be cooking back there. Probably some robot," Will says. "It'll be back to the Automats."
I tried to present a more hopeful scenario. Perhaps the paperwork would get automated and then the servers could concentrate on knowing the food and wine better, solely doing the service and explanation without the hassle of keying in orders. The duo weren't buying it.
"I don't want people losing their jobs of because of something like this," Jafferies says. "That's the main thing I think about. The bottom line for the restaurant could be that they don't have to staff as many people per schedule. So what happens to those people?"
Ayers, for his part, is careful to note that he keeps his restaurant staffed precisely as it would be without the tablets. But in general, if a restaurant can save money per table by cutting staff, do we really think that they won't?
"In San Francisco, the cost of labor is $10 an hour, the highest in the country for staff," Suri tells me, "So if you can reduce 10 percent of your staff, it's just a huge win."
Well, for the restaurant owner anyway. It is impossible to ignore that this technology threatens a job class, which through its flexibility and unusual hours, has supported many people trying to pull themselves up through school or a creative career.
But the employees that remain, Suri argues, are actually better off. Their data shows that after their tablets are deployed, the staff's per-night tips tend to go up both because servers cover more tables but also because, for whatever reason, people tip better through the machine than they do otherwise.
In any case, be on the lookout for a tablet coming to a table near you. Whether it's a dedicated piece of hardware like the Presto or some kind of smartphone or iPad-based solution, the next round of automation is already on its way to this corner of the service industry.
* Correction 3/4/12: This story originally, and incorrectly, stated that E La Carte could save $45 in labor costs per table. That was due to an unfortunate interview recording mistranscription. The correct number is $4 or $5, not $45 as originally stated. We regret the error, and blame the iPhone. Overall savings, then, E La Carte says, are roughly $15 per table.