At the new Alibaba restaurant, Robot.he, in Shanghai the human hostesses have been relegated to smiling and pointing at touch screens. The hard work of interacting with guests and serving dinner is done by mobile phones and mobile robots that look oddly similar to Amazon’s warehouse rovers. Cao Haitao of Robot.he explains Alibaba’s rationale, “In Shanghai, a waiter costs up to 10,000 yuan ($1,460) per month. That’s hundreds of thousands in cost every year. And two shifts of people are needed.” Bots, Haitao exclaims, work everyday without complaint. Already the machines are receiving glowing reviews from patrons who see huge savings in their bill, “Normally for two to three people, a meal costs about 300-400 yuan ($44-$58), but here, all this table of food is just over 100 yuan ($15),” explains diner Ma Shenpeng.
Alibaba’s competitor, JD.com is following suit by announcing it will open a thousand robot-staffed restaurants by 2020. According to Nikkei Asian Review the first location was suppose to open this August but as of today there have been no grand openings. However, the e-commerce giant has been seen scouting out locations throughout China for its 400 square meter fast food experience. Rumor has it that they already have a menu of more than 30 items. While automated dining has been around since the age of the Automat, which first open its doors in 1895 in Germany, the executions by Alibaba and JD.com are more than just novelties. Rising labor costs and rents worldwide are driving retail establishments toward a mechanical future, potentially leaving 66 million human workers in jeopardy.
Last May, Las Vegas’ Culinary Workers Union voted to authorize a strike against casinos that are adopting new technologies. While a tentative deal was reached between the parties, the main sticking points were the effect of robots on its 60,000 members, which include: porters, bellmen, housekeepers, bartenders, cocktail/food servers, cooks and other kitchen staff. According to the Union’s website, “As a consequence of this wave of automation, casino resort workers represented by the Culinary Union Local 226 have made it clear they want their voice heard when it comes to robots entering their field of work. Their newly arranged tentative deals and signed 5-year contracts have language dedicated to technology introduction and how it could potentially affect their existing responsibilities.” The casinos were quick to halt the possibility of a strike as the economic fallout could cost over $10 million a day. This action comes on the heels of a very well publicized negotiation between the Teamsters Union and United Parcel Service over the use of drones, driverless trucks and other automation technologies. As organized labor grabbles to understand its role relative to automation technologies, it is clear that the inevitability of adoption is accelerating past the point of no return.
To digest the impact of unmanned systems on the food service industry, I reached out to John Ha of Bear Robotics. Last year, I had the pleasure of meeting the restauranteur turned roboticist at an industry conference. Since then, Ha has been making headlines with his game changing product: “Penny – The Runner Robot.” Ha shared with me the evolution of his whimsically named mechanical waitress. He started his career at Google working long hours and in between coding, the former engineer would eat dinners at a small Korean restaurant minutes from Mountain View. Ha eventually bought the Kang Nam Tofu House with the dream of starting his own chain of casual Korean dining experiences. Instead Ha sighs, “I experienced the challenges faced by many operators in this industry. When my employees would show up late to work — or not show up at all — I had to step in and carry the load. And yes, that meant cooking, dishwashing, serving, bussing, hiring, etc.” Then after two years of slaving away, “A light bulb finally flashed over me when I was knee-deep into this. I said to myself: there has to be a better way to run these establishments.” After testing several concepts, Ha finally landed on the idea of a “food runner robot.” In his experience, “This is a simple task that restaurants can use to take a burden off of servers.” He continues, “From a front-of-house perspective, running food from one location to another does not add tremendous value. So, why not automate this?”
I asked Ha if he thinks Penny could mean the death of the food service profession, he retorted, “This was less about replacing servers with a robot, and more about changing the nature of a server’s daily work.” Using the Tofu House as his laboratory, Ha found that his servers spent less time running marathons of shuttling food than with customers. Proving his thesis, Ha boasted that his “servers generated an 18% increase in tips,” after Penny took flight. He also thinks that another side benefit of robots will be longer employee retention by making their work more enjoyable. As Ha describes, “Imagine yourself walking or running five to seven miles a day juggling multiple trays of food and drinks in a narrow and crowded environment. If you can picture this, then also think of how physically taxing it is.”
After the unfortunate news of Jibo and Kuri, it is refreshing to see entrepreneurs solve real problems for their respective industries. Unlike Pepper’s boastful claims of being the be-all-end-all of robots in one adorable package, Penny is specifically attacking hospitality’s biggest pain point – employee turnover. According to The National Restaurant Association, waitstaff churn is climbing to more than 72% of all employees, a third higher than the national average for other sectors. That same report estimates that the average establishment loses over $150,00 a year from server discontent, which for a restaurant like the ToFu House is a considerable percentage of their bottomline. If the statistics hold the true, Ha’s robot will pay for itself in a matter of months.
The market for automated food service is quickly growing with other startups entering the fray to ferry delicacies to hungry patrons, most notably Pudu and Savioke. Chinese manufacturer Suzhou Pangolin Robot Corp., Ltd. has been building fleets of robots since 2004, claiming leadership in the hospitality market for food preparation and service. As Suzhou controls the entire supply chain it could potentially undersell competitors with its line of robots. Its restaurant product, Amy (shown above) is similar to other Asian iterations that not only bring convenience to the dinner table, but personality through a humanoid package. In discussing this with Bear Robotics’ Chief Operating Officer, Juan Higueros, says he is not discouraged as Penny has already successfully served over 25,000 satisfied customers. Higueros states that the real opportunity for his company is to partner with restaurant brands, such as Darden’s Olive Garden and Yum’s Pizza Hut, to deploy its “Bear Operating System for remote fleet management and on-site operation,” on a global scale. In the meantime, the team of Ha and Higueros is busy perfecting Penny’s AI-human interface to amplify the value proposition. As the son of a restaurateur whose father worked 25-hour days, cyborg-enabled waitstaff could be a welcome blessing for proprietors and their families.
Reserve today for the next RobotLab Forum on Retail Robotics when we discuss how automation is changing the restaurant industry and more with Pano Anthos of XRC Labs and Ken Pilot, formerly President of Gap on October 17th in New York City.