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Robo Restaurants a Reality?

Jun 25, 2018


The 20th century fear of technology replacing human employees in the fast food service industry is slowly becoming a reality. Saladworks, a fast-service chain with over 95 national locations, has implemented self-ordering kiosks at many of its restaurants. Panera Bread invested nearly $100 million into technological automation. Thirty percent of Panera’s orders are now placed through kiosks, consumer desktops and mobile devices. CaliBurger LLC began using a robot, named Flippy, which can turn burgers and clean the grill. The company plans to institute Flippys at 20% of its locations by the end of the year. Wendy’s Co. is using automation to eliminate the need for humans to wash bowls, spatulas and other utensils used to prep food.

It is unsurprising that fast-food service jobs are among the first to experience mass-automation. A 2013 study by University of Oxford economists Carl Frey and Michael Osborne determined that food service occupations, such as cooks, hosts and servers, were in the first quintile of most automatable occupations out of 700 professions analyzed. An examination by the Organization of Economic Co-operation and Development found that the food preparation industry faces the highest probability of automation among the 88 industries that were studied. The threat of technology eliminating numerous positions throughout the food service industry is becoming increasingly apparent. Labor market conditions in recent years, however, may provide an optimistic outlook for those employed within the food service industry.

Unemployment among restaurant workers has declined to 6%, the industry’s lowest rate on record according to the US Department of Labor. Though the unemployment rate is higher for food service workers than the US’s overall unemployment of 3.8%, the difference can be attributed to the nature of the food service industry, which is prone to high employee turnover. The increased use of machines in the food service industry coupled with a rising minimum wage should, in theory, drive restaurants to hire fewer employees. In reality, this has not the case.

Nationally, fast-service restaurants employed 18.4 workers per establishment in 2017, an increase from the 17.4 employees per restaurant a decade earlier. Employment in the food service industry has increased by 1.6 million since May 2013 and totaled 11.9 million as of May 2018.

It seems that fast food restaurants are turning to machines as the labor market has become increasingly tighter, not because they are trying to eliminate human workers. Dunkin’ Donuts CEO Scott Murphy remarked that he has “never seen the labor market this tight”. Murphy then went on to say that his company “spends a lot of time training people and a month later they walk out the door.” In recent years, the fast-food industry did not require the use of technology, due to increased slack in the labor market and a large supply of people willing to work lower income jobs. Steadily declining unemployment, combined with rising wages nationwide, has driven the fast-food industry to implement improved automation into their operations.

If automation is not serving as a fast-food industry “job killer”, what is happening to employees who are having their jobs replaced by machines? Improved service through employee reassignment has become an increasingly prolific trend in the fast-food industry. Panera often reassigns its cash register workers to other tasks such as delivering food to customer tables. McDonald’s has also begun to offer table service, with the assistance of its self-order kiosks.

There is little doubt that automation provides significant benefits including improved consistency, reduced time requirements, and ease of burden on human employees. There are, however, limits to the advantages that robotics can provide. Panera CEO Blaine Hurst said that he does not envision robots replacing humans in the food service industry because “there’s a craft to making food,” and that this craft is hard to replicate with robotics.”  Magne Mogstad, a labor economist at the University of Chicago, remarked that automation “may very well create demand for service with a personal touch.”

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