Why do I have to order off a QR code?

While wandering a cute neighborhood in San Francisco you come across a busy family restaurant, you squeeze between another couple to check out the posted menu near the front door and you immediately eye the brown butter gnocchi. Twenty minutes later the charming host leads to your seat, walking past the open kitchen and into the cozy rustic ambiance of the dining room, and there.. taped to the handcrafted oak table is the dreaded QR code. You sigh, and think.. Why do I have to order off a QR code?

The answer, like many in this series, is complicated. How organizations react to market pressures such as the current hospitality labor crisis, is something that has been studied at length by economists and psychologists all over the world. In this case we are seeing a masterclass in how multiple generations of operational ineptitude and real world constraints have coagulated together to create the perfect fear campaign that has gripped the industry. Tech has quickly adapted to this with a suite of must have products that the vast majority of modern restaurants assume they need to survive.

A typical neighborhood restaurant is often paying for;

Reservation software: Opentable, Resy. Your standard reservation services that in addition to $250+ a month recurring costs can take $1+ per person booked. There are often additional hidden fees based on in app marketing, events, waitlists and messaging.

A point of sale system: Toast, Square. Startup costs include hundreds of dollars per piece of the hardware with a SaaS model for each individual piece recurring monthly. (printers, tablets, kitchen screens, handhelds, kiosks) An overall standard operating cost, and most importantly, a steep credit card processing fee per transaction. The later is where these companies make the majority of their money. These costs can ballon to $100K a year or more. Many of the big players in this field are also becoming 'omni apps', and due to large venture capitalist funding rounds are attempting to bring an all in one solution to the market, waging a war on the rest of the restaurant tech industry.

Delivery apps: Doordash, Uber eats. These all have predatory associated costs per order that can be so high the government had to come in a regulate them. In addition to upwards of 40% per order, software costs, integration costs, and hardware costs make this a net loss for a majority of establishments.

HR and payroll: Zenifits, ADP. Huge all in one HR systems for dealing with everything from on-boarding to termination are common in the industry where managers both want legal documentation and don't have the bandwidth to facilitate the steps it takes to stay on top of ever changing laws and the revolving door of hires. These are often combined with payroll processing and benefits management where, you guessed it, you pay to process in a SaaS type model per employee in addition to large monthly fees. All this is not even including existing payroll taxes which can be over $10k a month.

Recruitment: Indeed, Monster.com, and a host of temporary staffing companies like instawork have thrived in an industry desperate for talent. Job postings cost money and come in a variety of flavors including SaaS, cost per post, cost per view, monthly fees, boosting fees, and backend costs if you actually hire the candidate. These can amount to several hundred dollars per week. More high recruitment services can cost $10k per candidate you hire.

Social Media: Hootsuite, Later. The cost of advertising aside, which can be monumental, many restaurants use third party apps and posting programs to manage their content across the vast area of social media platforms. These have another common quirk which is 'billed annually' so you are stuck with a steep 3k+ plus bill just to use begin to use services.

Music: Spotify, apple music, tidal. The relatively cheap monthly cost often comes with large hardware costs for speakers and acoustic treatment, in addition to BMI and ASCAP fees for playing the music in public.

Security: ADT, UNIFI. With a seemingly never ending string of burglaries and break ins in the bay area, having alarm systems and a vast array of security cameras is almost mandatory for any establishment. Monthly costs, Camera costs, Video hosting backend costs, alarm system hardware, setup fees. The list goes on and on and can be thousands of dollars to put in place.

Infrastructure and Internet: All these various apps, devices, and integrations require dedicated space and physical hardware, usually in cramped office or utility closet. Modems, hard drives, video monitors, wireless access points, camera and internet switches, and more are now standard in most restaurants. Fees from hardware, SaaS models, and fast fiber internet to support it all can be thousands per month.

While many of these tools are functional and streamline operations, when you add up the costs to do business in this way you can only come to the conclusion that the people making money here are not these future proofed, super advanced technological restaurants of the future. Its VC backed tech companies. Restaurants are then encouraged to offset their costs to pay for these pieces of tech. Including diminishing the quality of their food, and labor reductions which replace your friendly, witty, and knowledgeable neighborhood server with a black square full of dots taped to a table. If the trade off for having this tech is worse food and worse service... what is the point of even going out to eat? Where is the promise of this technological utopia that has been sold to us?

The pervasive mentality of subtraction and not addition is at play here. There is no thought to uplifting and developing the new talent in the industry or supporting the current crop of passionate workers. No attempt made to shift the culture and image of hospitality through thoughtful ground up systems. These 'fixes' are directly creating a system where, ideally, people don't even exist. This first round of 'app based' technology is just the start. Robot cooks, ordering kiosks, ghost kitchens, autonomous delivery systems, and meal replacement systems are already being implemented. If you follow the money, the hospitality industry is increasingly anti-people.

This system and way of thinking creates a recursive spiral that takes away the literal heart and soul of industry and removes what makes going out to dinner a dynamic, fun, connected, and human hospitality based experience. It's a short term destructive anti-people 'solution' that might work for fast food, but misses the fundamental aspect of what makes people want to dine out. Therefore, because its easy, because its streamlined, because its a plug and play immediate 'solution', because its a bandaid that doesn't address the real problems of the industry..The dominance of restaurant technology companies capitalizing on the economic fears and systemic failings of our industries culture by pushing an interwoven system of predatory products are why you are using a QR code.

So why hasn't this been fixed if we are seeing historical declines in service and people eating out in general? Well, frankly... It's hard. There is no SaaS model, no one size fits all perfect solution, no quick fix, no miracle tonic. This is a ground up restructuring of an industry, one location at a time. While many companies like Obra Viva (shameless plug) provide extensive and malleable toolkits and systems to support a people first approach, the implementation and adoption of these systems is where the nuance and understanding of the industry presents a the only viable framework for evolving beyond these decade old challenges. While this can seem ambitious and daunting, it must be done in order to not just survive, but thrive. The status quo is failing, the tech solutions are misguided, and the economic outlook of the country is uncertain. To save hospitality we must invest in culture, our most precious asset.