Bryan Caplan  

Smart Phones and Restaurants

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One thing I haven't seen smart phones do yet: Figure out that you're in a restaurant, then let you order your meal straight from your phone without talking to a server.  To cut transactions costs further, your phone would tell the restaurant where you're sitting using GPS.

How long will it be before 50% of U.S. restaurants handle orders this way?

A. 3 years
B. 10 years
C. 30 years
D. Never

Please show your work.


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COMMENTS (36 to date)
Steve Horwitz writes:

It is not clear to me that this is a transactions cost reducer IF you have either significant dietary issues or you rely on servers to help you decide among multiple possible menu options.

My wife is severely lactose intolerant and the ability to engage in actual conversation with a knowledgeable server is often very helpful, especially if they are able to offer alternative ways of preparing a dish that avoids the dairy. I'm not convinced this could be done as efficiently via smartphone, even with a whole database of ingredients at its disposal.

I often will ask servers which of several dishes they recommend, or that they know others like. Now the latter could be kept in a database if one really wants, but it would require more than just frequency of purchase, it would need ratings as well.

Bottom line: actual human conversation allows for contextual knowledge to be in play in ways that data transfer does not. I could see this working at low and maybe medium-end restaurants, esp. chains like Applebee's etc.

Eric Hanchrow writes:

GPS isn't anywhere near accurate or reliable enough to identify the table I'm sitting at.

And if the phone isn't talking to a server, how will it know what's on the menu?

Lewis writes:

B. 10 Years

At least two things have to happen.

1) Even more widespread use of smartphones.

2) The social norm shift of not having a person in front of you will take a bit of time. (ie. Why are there still brick and mortar video stores in an age of Netflix and Redbox)

Ben Hughes writes:

While I would love this, I think most people visit restaurants just as much for the non-food "experience" as for the food "experience". People just like having a server and ordering your food on a phone would be "fast food-izing" restaurants - probably so much as to devalue the experience more than any transaction cost savings.

I do however think they could come up with some better way to request a bill when you're done. So much time (and hence table resource utilization) is wasted just waiting for your bill to come.

Damien writes:

B?

The major technical hurdle is that GPS is not accurate enough. Especially not indoors, where your phone often has to guesstimate your position based on the information the cell towers give it. The GPS is just not strong enough (or the chips inside our phones sensitive enough) and even with a strong signal, GPS receivers are usually only accurate to about 15 meters (50 feet).

RFID would probably work better. This is also how the phone would know that you're in the restaurant.

I answered 'B' because the technology would not be mass-deployed (in my opinion) in 3 years and 30 years seemed much too long. It could be 'D' if customers don't like the idea of being "tracked".

MattYoung writes:

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david writes:

GPS and 'independently figure out you're in a restaurant' would be an utterly terrible way of doing this; even GPS accurate to 1m would confuse between tables. And if the restaurant has to be set up to receive orders, and phones set up to retrieve up-to-date menus, it would be far easier to stamp QR codes in a discreet place on each table, pointing mobile phones to the restaurant website and also reporting the table number. Wave your phone over the QR code and the menu appears. And restaurant-provided wifi will do for connectivity, of course.

Commercial uses of QR codes like this are already popular in Japan, but QR code support is only now common among US smartphones.

But we would probably need larger screens on said smartphones for uses as menus; even Japan isn't going there yet.

Stephan writes:

As specified? D: Never. Like the other commenters said GPS is not acurate enough and especially in crowded places there's a fair chance to serve the wrong table. This will not only annoy customers but also create a mess and additional work as the order feeds directly into the invoicing software.

Otherwise I would say A: max 3 years. In Austria almost any Skiing Pub uses such a system. The waiter comes with his device "Orderman", types in your table number and order which feeds by Bluetooth or 3G into the system, the system records your order, forwards it to the bar and kitchen and after several beers "Orderman" serves your invoice.

Not rocket science to make your iPhone to an "Orderman" with an App and provided the table displays his number.

Justin Ross writes:

If you eat at Chipotle, you can order your food through an app, go pick it up at the register, and sit down and eat. Pretty close.

Also close, David Skarbek pointed out that, in France, you can order food using a palm pilot provided at the table: http://perfectsubstitute.blogspot.com/2008/06/employment-laws-in-france.html

Tom Myers writes:

GPS wouldn't do it, but it's still not hard for an Android or iPhone app, assuming a camera-equipped cell phone, to send an initial image of something unique, even as simple and ugly as a bar code, on the table. The response comes back with the data for the menu app, including the name of the human who'll deal with the order. Preferably by telepresence robotics. :-) (And if there are people at a table which hasn't sent a message yet, then they get dealt with in the traditional way, with the traditional wait.)

Pat writes:

What is the advantage of punching away on the phone when you can just tell somebody what you want?

Someone has to bring you your food anyway, might as well talk to them twice and find out what's good or what isn't.

Verbal communication is good sometimes.

Ari Indik writes:

For as long as the "s" in GPS stands for "satellite, " and as long as restaurants have roofs, the answer is "never" for that part of it.

For the rest of it, I'll say 3 years. I've been waiting forever for the ability to order via phone, touch-screen kiosk, computer, text, paper, or any method that doesn't require another human being to translate what I said into writing while I'm saying it. Let me type it and let them take as long as they need to read it and get it right.

floccina writes:

It could evolve another way, that is with a device at the table when you get there.

crossofcrimson writes:

Ok - This is bringing back some bad memories...

When I was taking a couple of my last engineering courses in college there was a fairly extensive group project I was involved in. Our group drew up a bunch of ideas, and we voted on them to decide what we'd end up actually doing. My idea was for some kind of PDA-like device (this was before smartphones or anything close to it) that would be handed out at the restaurant. It would do roughly some of the same things described here. Additionally it would let you order your food while you're waiting to be seated - so that your food could be ready as soon as you sit down (big increase in turnover time).

At the end of the day, I was outvoted 3-1. What did my group favor so emphatically over my idea? An automated window-blind system. I just wish I could say I was joking.

OneEyedMan writes:

"What is the advantage of punching away on the phone when you can just tell somebody what you want?"

1) No waiting on lines
2) If you regularly order the same things at each restaurant then you can place your second and subsequent orders with a click or two, which is faster than waiting in line and talking.

Chandran writes:

"The Training Table Restaurants, Inc. ("The Training Table") was formed in March, 1977, featuring gourmet hamburgers, sandwiches, soups and fresh salads served in a pleasant and comfortable dining atmosphere. CUSTOMERS ORDER USING TELEPHONES placed near each table. The order-by-phone is a unique feature of the Training Table.

The Training Table's first restaurant was opened in Midvale, Utah in October, 1977. Four years later, the company opened its second restaurant at 809 East 400 South, Salt Lake City, Utah. Since that time, seven more locations have been added, the latest restaurant located in Riverton just off Bangerter Highway at 13200 South.

The operating philosophy of The Training Table has consistently been to provide the highest quality food at reasonable prices. "

Sadly, being able to phone in your order has not improved either the quality of the food or value for money. Better burgers are to be had elsewhere in Salt Lake at better prices.

Hyena writes:

I would not be surprised if there are currently hipster restaurants with apps which allow you to approximate this effect. Perhaps in the Bay Area and Los Angeles.

Within 5 years some chain restaurants in major cities will allow you to do this. Fast food will go first followed by chain restaurants like Chili's which are often subject to wait times.

Apps will work in two modes: at-restaurant and ETA mode.

At-restaurant mode will use GPS to locate you in the restaurant and the app will connect you to the store. Restaurant coverage strategies will ensure the workability of this arrangement.

ETA mode will communicate your position and order to a (web) server, which will check it against distance, traffic and historical trip times. Your order will be placed with the goal of it being ready when you arrive.

Payment will be handled through your credit card on file either with the restaurant, a third party general phone payments system, or a "Diner's Club" payments system for restaurants alone.

The major impetus will be table wait time reduction. Table wait times are the bane of both fast food and casual dining restaurants. The more people who order ahead, while waiting in the lobby or otherwise, the larger the kitchen can be and the faster tables can be moved out.

So goes the Push Button World of Tomorrow.

Hyena writes:

@Horwitz

By law in some states the most likely users of these apps are required to know whether any of their foods pose dietary risks for consumers. The app would be highly efficient for them because they could upload dietary requirements to their profile and have menus culled to match.

Kosher modes and mere preferences can also be stored. Stores will be notified automatically that a customer has a dietary requirement as a double-check.

David C writes:

There's no need for GPS to locate your table. Just include a map of the restaurant with the menu, and let the customer click on whichever table they're sitting at.

Answer: Significantly less than A

http://www.spiegel.de/international/zeitgeist/0,1518,501086,00.html

johnleemk writes:

I have been to quite a few restaurants where waiters take your order by PDA. It should only be a hop and a skip to the point where the customers themselves are using the PDA. Incorporating the device into the tabletop itself is something which I think Microsoft has been working on.

Conceptually this seems to be an idea which I think will take off in about 10 years or so. Technologically, it seems obvious to me GPS is not the answer. It is probably more realistic that phones will communicate directly with some other device in the restaurant to place orders and so on. An in-restaurant device would be able to precisely locate each table and party, which already gives it a huge advantage over GPS.

wlu2009 writes:

Microsoft debuted a "surface computer" a few years back and mentioned restaurants as possible users. Via touch screen on your table you would order drinks and food. But at $5000/per it doesn't yet seem to be worthwhile investment. It seems to me as long as someone has to bring you the food to you, you're not really saving that much money. In eateries where the watier/server is the same employee, how much can you squeeze from them not taking two or three minutes to order? There may be more savings if this means ALL they do is deliver food to your table (e.g don't have to pay a premium for charisma, amiability) but it seems like they would still have to take time to check up on tables. Add to this the fact that a number of older or less tech savvy customres will insist on personal service and the cost savings that make it worthwhile may be a long way off.

Jody writes:

Sheetz. No tables, but touchscreen ordering without a waiter.

Steve Horwitz writes:

Hyena:

That assumes such allergies/intolerances can be dealt with algorithmically. That is what I'm denying. I know from experience that my wife's issues are not quite so black and white and that a real live human being is a much better interface.

David C writes:

I found a relevant statistic from 2007:

"Roughly 25 percent of diners in 2007 made an online order from a restaurant. That's up 9 percent from two years ago, according to Technomic, a Chicago-based restaurant consulting firm."
http://www.ocregister.com/articles/online-12398-orders-restaurants.html

And here's 2005:
"Hudson Riehle, a senior vice president at the association, said almost 10 percent of consumers last year placed an order online for takeout or delivery food - roughly twice the number of two years ago."
http://www.nytimes.com/2005/06/13/technology/13ecom.html?_r=1

So, assuming the trend continues, a little over 50% of consumers will order food online at some point in 2013, which isn't identical to the question, but the restaurant figures are probably similar.

agnostic writes:

Smart phones need a certain amount of smarts and tech savvy to use, so not until the Millennials are at retirement age in about 45 years at the earliest.

Probably not even then since a good fraction of people won't be smart enough to easily navigate everything. Even at those self-check-out stations in supermarkets, there's always a live person there supervising everything in case something pops up on the fly and can't be dealt with by a robot.

Hyena writes:

@Horwitz

I will suggest that if your wife's allergies and intolerances cannot be handled through the exclusion of all things which she is allergic to or intolerant of, then there is a fundamental problem with her allergies and intolerances such that, dare I say it, they defy physical laws.

Nicola writes:

Depends. Do waiters have a powerful union?

agnostic writes:

If there were such pent up demand for this sort of thing, then why don't we order using touch-screens at the table or at the counter if there's no busing service?

Yeah, it would cost a decent buck to buy, install, and repair the capital, but not as much as the cumulative wages, health care, etc., that a person would require to do the work.

Look at how quickly ATMs put bank tellers out of work. Yet we don't see anything like that for restaurants. It must be that when people go to eat out, they want to relax and enjoy themselves, so they're willing to pay to let someone else futz around with the machine that registers orders.

Marc A Cohen writes:

I think the majority of you have forgotten a major point - the competence (or incompettence) of the customer. There are a LOT of people out there who, if confronted with a computer ordering system at a fast food restaurant, would be unable to figure out how to use it with sufficient skill to save themselves from starvation. Remember - half the population has an IQ of 100 or less. Computerized ordering instructions that seem intuitive to you will prove an indecipherable mess to the 40% of the population that doesn't graduate from high-school. These people are ALWAYS going to need someone to explain the menu to them and order their food for them.

It'll be a while:

1. Cellular phone adoption is strikingly poor in the United States. That is to say nothing about smart-phones specifically. Removing servers completely would price some people completely out of the restaurant -- so you would have to keep the marginal server around anyway for the neo-luddites who refuse to carry around a smartphone...or just lose their business.

2. Restaurants would lose a crucial amount of menu engineering. I'm not sure to what extent this drives revenue, but creating a profit-maximizing menu is quite the science. In effect, you would be standardizing a type of menu that (from what I hear from people who know) would be sub-optimal from a profit standpoint. However, on the flip side of this, if high-speed coverage (3G+) becomes more standard and reliable, it could make for much more interest (interactive) menus. Menu innovation is quite stagnant, so it might kick-start a cool industry of interactive menu engineers.

3. Far from being skeptical about the technical aspects of it, as a lot of commenters seem to have been, I don't see this as an obstacle at all. Sure, Bryan mentioned GPS, which probably wouldn't work -- but a commenter mentioned QR codes, another mentioned RFID...and both of those are mindlessly easy to implement. You needn't go that far however, as the restaurant app could simply ask you what table number you're at..

blink writes:

@Ben Hughes argues best. For fast food, this may happen very soon, but for up-scale restaurants probably never. For many people, part of the experience is having another person serve them -- it is as much as an amenity as the decor or the food itself!

Steve Horwitz writes:

Because, Hyena, in your world everything is black or white. It's not possible, for example, that different sorts of dairy products might affect her with different degrees of discomfort at different thresholds, so knowing what her options are might enable her to make a trade-off between taste and risk. Intolerances are not binary; different dairy products contain different amounts of lactose.

Apparently your world lacks the nuance that is the reality the rest of us experience. And you apparently know more about her issues than the man who has been with her for 24 years. But thanks for playing.

Peter writes:

"neo-luddites who refuse to carry around a smartphone"

I'm a techie and I have yet to find a reason to carry one, not sure how refusal to be trendy and burden yourself with a time wasting inefficient device like a smartphone makes you a luddite. Can see the value if your in sales or some other "social" job like promoter but all those poor factory workers, receptions, workers at the gap, and system administrators fail to see the need, just see a fashionable want.

As for on topic, do you really see the efficiency in ordering by (smart)phone at a sit down restaurant? I can see smart menu's maybe but I'm trying to spent 5 minutes fiddling with a iphone application to order a steak when it takes me all of 30 seconds with a waiter. Seems to me to be the ever growing trend towards impersonal behavior and a fear of interaction .. I think some folk are just so generation ADD that they can't deal with a lack of instant response and actually talking to a real person.

ThomasL writes:

floccina points out a much more credible way for this to develop. Interactive devices built in to or associated with the table.

It corrects all the problems of pinpointing the location, menu distribution and formatting, privacy concerns, etc.

It should be cheaper and easier as well, since the crossproduct of phone brands, models, and restaurants would make for a support nightmare.

The_Cupboard_Is_Bare writes:

Steve Horwitz:

I completely understand your situation. I, too, have food allergies and generally have to ask a few questions about the way the food is prepared.

Additionally, we recently discovered that eggs that have been "fortified" with high levels of Omega 3 can interfere with my husband's ability to metabolize one of his medications. It was several weeks before I realized what was causing the problem, and when I removed the offending eggs from his diet, he was fine.

So, I completely agree with you that it is important to have the ability to confer with the waiter.

Peter:

I am also one of those techies who does without a smart phone. I prefer that my cell phone act only as a phone. With the exception of voice mail, all other features are turned off. I don't even use call waiting, because I'm of the old school that the person to whom you are speaking deserves your undivided attention until the two of you decide to terminate the conversation (I would, however, make an exception if I had children and one of them wasn't at home).

*********************

As for using cell phones to order in restaurants...Whatever happened to the leisurely art of dining? Did it ever occur to anyone that one of the reasons we devour so many stomach medications is that we eat so quickly we make ourselves sick?

Restaurants benefit economically from the leisurely aspects of dining by way of alchoholic beverages. How many times has a hostess asked you if you would like to sit at the bar while you wait for your table. And when you sit at the bar, don't you generally order something to drink?

Finally, I enjoy having a good relationship with one's waiter/waitress. There are a number of places that I have frequented for many years, and there is nothing nicer than to be greeted with a genuinely warm "Hello!" and "How are you?"

I can recall the time we brought my in-laws (who were in their final years) to a place we frequented. When the waiters found out that they were my husband's parents, they fussed over my in-laws like they were royalty, and my in-laws had the most wonderful time.

There's just some things a smart phone can't do.

Lauren writes:

No one has yet mentioned that many pizza parlors do something akin to this already, and even go further. When I call to place a delivery order from my home phone, they know my address (including the tricky detail about getting there that I've relayed to them once) and even my previous orders, all from their phone-number recognition software.

However, will 50% of all restaurants ever do something like this, perhaps using GPS to substitute for the fixed phone number/address combo? I'd answer: Never.

Restaurants substantially provide the service of hot food being delivered to the table hot, cold food being delivered cold, and fresh food being delivered fresh. If I want a really fresh, crisp-crusted, oozingly hot pizza, I eat out.

That means the physical extent of a decent restaurant is limited by the time it takes for a waiter to get from the kitchen to the table. The waiter, being a physical human being, then has to return to the kitchen. Bundling the service of taking another order from a nearby table, plus the personal touch of friendly service, is a time-tested, efficient idea for taking advantage of the waiter's return trip.

The GPS method might work best in large plazas served by multiple cafes, such as exist in some places in Europe. If mall food service courts ever offer table-delivery of the food, it might work there, too. In those situations, there might not be a neighboring table with customers from the same restaurant to take advantage of the waiter's return trip. The efficiency of using GPS to place the incoming orders might substitute for that. Within a single restaurant, though, the time involved with a waiter's return trip is a valuable, potentially cost-reducing resource for the restaurant and its customers.

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