Robots Will Transform Fast Food

That might not be a bad thing.

Steve Scott

Visitors to Henn-na, a restaurant outside Nagasaki, Japan, are greeted by a peculiar sight: their food being prepared by a row of humanoid robots that bear a passing resemblance to the Terminator. The “head chef,” incongruously named Andrew, specializes in okonomiyaki, a Japanese pancake. Using his two long arms, he stirs batter in a metal bowl, then pours it onto a hot grill. While he waits for the batter to cook, he talks cheerily in Japanese about how much he enjoys his job. His robot colleagues, meanwhile, fry donuts, layer soft-serve ice cream into cones, and mix drinks. One made me a gin and tonic.

H.I.S., the company that runs the restaurant, as well as a nearby hotel where robots check guests into their rooms and help with their luggage, turned to automation partly out of necessity. Japan’s population is shrinking, and its economy is booming; the unemployment rate is currently an unprecedented 2.8 percent. “Using robots makes a lot of sense in a country like Japan, where it’s hard to find employees,” CEO Hideo Sawada told me.

Sawada speculates that 70 percent of the jobs at Japan’s hotels will be automated in the next five years. “It takes about a year to two years to get your money back,” he said. “But since you can work them 24 hours a day, and they don’t need vacation, eventually it’s more cost-efficient to use the robot.”

This may seem like a vision of the future best suited—perhaps only suited—to Japan. But according to Michael Chui, a partner at the McKinsey Global Institute, many tasks in the food-service and accommodation industry are exactly the kind that are easily automated. Chui’s latest research estimates that 54 percent of the tasks workers perform in American restaurants and hotels could be automated using currently available technologies—making it the fourth-most-automatable sector in the U.S.

The robots, in fact, are already here. Chowbotics, a company in Redwood City, California, manufactures Sally, a boxy robot that prepares salads ordered on a touch screen. At a Palo Alto café, I watched as she deposited lettuce, corn, barley, and a few inadvertently crushed cherry tomatoes into a bowl. Botlr, a robot butler, now brings guests extra towels and toiletries in dozens of hotels around the country. I saw one at the Aloft Cupertino.

Ostensibly, this is worrying. America’s economy isn’t humming along nearly as smoothly as Japan’s, and one of the few bright spots in recent years has been employment in restaurants and hotels, which have added more jobs than almost any other sector. That growth, in fact, has helped dull the blow that automation has delivered to other industries. The food-service and accommodation sector now employs 13.7 million Americans, up 38 percent since 2000. Since 2013, it has accounted for more jobs than manufacturing.

These new positions once seemed safe from the robot hordes because they required a human touch in a way that manufacturing or mining jobs did not. When ordering a coffee or checking into a hotel, human beings want to interact with other human beings—or so we thought. The companies bringing robots into the service sector are betting that we’ll be happy to trade our relationship with the chipper barista or knowledgeable front-desk clerk for greater efficiency. They’re also confident that adding robots won’t necessarily mean cutting human jobs.

Steve Scott

Robots have arrived in American restaurants and hotels for the same reasons they first arrived on factory floors. The cost of machines, even sophisticated ones, has fallen significantly in recent years, dropping 40 percent since 2005, according to the Boston Consulting Group. Labor, meanwhile, is getting expensive, as some cities and states pass laws raising the minimum wage.

“We think we’ve hit the point where labor-wage rates are now making automation of those tasks make a lot more sense,” Bob Wright, the chief operations officer of Wendy’s, said in a conference call with investors last February, referring to jobs that feature “repetitive production tasks.” Wendy’s, McDonald’s, and Panera are in the process of installing self-service kiosks in locations across the country, allowing customers to order without ever talking to an employee. Starbucks encourages customers to order on its mobile app; such transactions now account for 10 percent of sales.

Business owners insist that robots will take over work that is dirty, dangerous, or just dull, enabling humans to focus on other tasks. The international chain CaliBurger, for example, will soon install Flippy, a robot that can flip 150 burgers an hour. John Miller, the CEO of Cali Group, which owns the chain, says employees don’t like manning the hot, greasy grill. Once the robots are sweating in the kitchen, human employees will be free to interact with customers in more-targeted ways, bringing them extra napkins and asking them how they’re enjoying their burgers. Blaine Hurst, the CEO and president of Panera, told me that his no-longer-needed cashiers have been tasked with keeping tabs on the customer experience. Panera customers typically retrieve their food from the counter themselves. But at restaurants where they place their orders at kiosks, employees now bring food from the kitchen to their tables. “That labor has been redeployed back into the café to provide a differentiated guest experience,” Hurst said.

How many employees, though, do you need milling about in the café? The early success of the kiosks suggests that, at least when ordering fast food, patrons prize speed over high-touch customer service. Will companies like CaliBurger and Panera see sufficient value in employing human greeters and soup-and-sandwich deliverers to keep those positions around long-term?

Steve Scott

The experience of Eatsa may be instructive. The start-up restaurant, based in San Francisco, allows customers to order its quinoa bowls and salads on their smartphone or an in-store tablet and then pick up their order from an eerie white wall of cubbies—an Automat for the app age. Initially, two greeters were stationed alongside the cubbies to welcome and direct customers. But over time, customers relied less frequently on the greeters, co-founder and CEO Tim Young told me, and the company now employs a single greeter in its restaurants.

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The type of person who orders a grain bowl on an iPhone is perhaps content to forgo a welcoming human face. There may not be enough such people to sustain a business, however, at least not yet. Eatsa announced in October that it was closing its locations in New York City; Washington, D.C.; and Berkeley. Young told me that the problem was the food, not the technology, and that other restaurant chains are interested in deploying Eatsa’s model. The taco salad I ordered was pretty good, though, and, at $8, cheaper than the fare at many other salad chains. I wondered whether the problem wasn’t that Eatsa had crossed the fine line separating efficiency from something out of Blade Runner.

Less dystopian was the scene at Zume Pizza, in Mountain View, California, where I watched an assembly line of robots spread sauce on dough and lift pies into the oven. Thanks to its early investment in automation, Zume spends only 10 percent of its budget on labor, compared with 25 percent at a typical restaurant operation. The humans it does employ are given above-average wages and perks: Pay starts at $15 an hour and comes with full benefits; Zume also offers tuition reimbursement and tutoring in coding and data science. I talked with a worker named Freedom Carlson, who doesn’t have a college degree. She started in the kitchen, where she toiled alongside the robots. She has since been promoted to culinary-program administrator, and is learning to navigate the software that calculates nutritional facts for Zume pizzas.

Steve Scott

This has typically been the story of automation: Technology obviates old jobs, but it also creates new ones—the job title radiology technician, for example, has been included in census data only since 1990. Transitioning to a new type of work is never easy, however, and it might be particularly difficult for many in the service sector. New jobs that arise after a technological upheaval tend to require skills that laid-off workers don’t have, and not all employers will be nearly as progressive as Zume. A college education helps insulate workers from automation, enabling them to develop the kind of expertise, judgment, and problem-solving abilities that robots can’t match. Yet nearly 80 percent of workers in food preparation and service-related occupations have a high-school diploma or less, according to the Bureau of Labor Statistics.

The better hope for workers might be that automation helps the food-service and accommodation sector continue to thrive. Panera’s Hurst told me that because of its new kiosks, and an app that allows online ordering, the chain is now processing more orders overall, which means it needs more total workers to fulfill customer demand. Starbucks patrons who use the chain’s app return more frequently than those who don’t, the company has said, and the greater efficiency that online ordering allows has boosted sales at busy stores during peak hours. Starbucks employed 8 percent more people in the U.S. in 2016 than it did in 2015, the year it launched the app.

Of course, whether automation is a net positive for workers in restaurants and hotels, and not just a competitive advantage for one chain over another (more business for machine-enabled Panera, less for the Luddites at the local deli), will depend on whether an improved customer experience makes Americans more likely to dine out and stay at hotels, rather than brown-bagging it or finding an Airbnb.

That could be the case. James Bessen, an economist at Boston University School of Law, found that as the number of ATMs in America increased fivefold from 1990 to 2010, the number of bank tellers also grew. Bessen believes that ATMs drove demand for consumer banking: No longer constrained by a branch’s limited hours, consumers used banking services more frequently, and people who were unbanked opened accounts to take advantage of the new technology. Although each branch employed fewer tellers, banks added more branches, so the number of tellers grew overall. And as machines took over many basic cash-handling tasks, the nature of the tellers’ job changed. They were now tasked with talking to customers about products—a certificate of deposit, an auto loan—which in turn made them more valuable to their employers. “It’s not clear that automation in the restaurant industry will lead to job losses,” Bessen told me.

My experience with service bots was mixed. The day I visited the Aloft Cupertino, its robot butler was on the fritz. And when I asked Marriott’s new artificial-intelligence-powered chat system to look up my rewards number, it said it would get a human to help me with that. Neither interaction left me anticipating more-frequent hotel stays. As I wrote this column, however, Starbucks went from being a weekly splurge to a daily routine. The convenience of the app was difficult to pass up: I could place my order while on the bus and find my drink waiting for me when I got to the counter.

One day, I arrived at my local store to find that it had instituted a new policy requiring customers to retrieve mobile orders from a barista. (Apparently things can get a little hairy at the mobile-pickup station during rush hour at some stores.) I didn’t like the change; I’d grown accustomed to frictionless transactions. I started going to a different Starbucks location nearby, where I could pick up my coffee without the interference of a fellow human being.

This article appears in the January/February 2018 print edition with the headline “Iron Chefs.”