Carl's Jr/Hardee's CEO considering automated restaurant

[K. A. Pital]

Why the hell does anyone think the unemployed will be given any more help, sympathy or kind treatment when automations replaces even more human labor?

Because ultimately it's cheaper to dole out some sort of Basic Guaranteed Income than try to keep a lid on food riots or outright insurrection by tens of millions of hungry, desperate people with very little left to lose, especially when the troops on the streets have more in common with their alleged enemies than their own top brass.

If there's one thing the upper echelons of society can usually be trusted to value more than money or power, it's their own hides.

That's why Greek and Spanish jobless get a great guaranteed income!

[Broomstick]

I'm always a mix of amused and perterbed at this presumption that EVERYONE has a smart phone. No, they actually don't. Market penetration is only around 50% it the US.

How regularly do people too poor to own even a basic smartphone use cabs as a means of transportation, versus public transportation or their own cars? Cabs aren't cheap.

Ah, there's another assumption: that people without smart phones are poor.

Smart phone ownership has been uncoupled from socio-economic status. In fact, it would not surprise me if the percentage of those at or below the poverty line with a smart phone is higher than those above that line. Some years ago the US government started making basic smart phones available to those on the bottom because these days so many job-search and government things are on line it was representing a serious obstacle to that group. For many, it was their only home computer, their only phone, and still is.

Most of the people I see these days sans smart phones are middle class or upper middle class, and usually over 40 - which is a demographic that might well be utilizing cabs.

Also, if you live in a city like Chicago a cab is still significantly cheaper than owning a car, even if not as cheap as mass transit. The thing is, cabs are more nearly door-to-door and go where the trains and buses don't. In suburbs you need to call a cab, in Chicago a lot of places you just walk to the curb and wave your arm.

So the answer isn't quite as simple as it initially appears.

[Zaune]

That's why Greek and Spanish jobless get a great guaranteed income!

Give it a few years and a few really big riots.

[Elheru Aran]

Some years ago the US government started making basic smart phones available to those on the bottom because these days so many job-search and government things are on line it was representing a serious obstacle to that group. For many, it was their only home computer, their only phone, and still is.

Quick quibble. Smart phone? No. Cell phone? Yes. My wife and I were recipients of that program for a fair length of time and we only had very basic bricks. My wife's was a little better than mine, she could access the Internet in an extremely minimal fashion, but it definitely wasn't a smartphone.

Now, this was a few years ago, so I freely admit it's quite possible they've upgraded to an older generation of smartphones by now, or there may be regional variations in what's available, but as far as I know it's still bricks for the most part. Calling and texting, no problem. Apps or anything else, not so much.

Give it another few years or so though and I would expect a basic smartphone for sure, though.

[Broomstick]

Ah, well, I stand corrected (although qualified we did not avail ourselves of the program).

Nonetheless, there is some confusion and overlap between "basic bricks" and "smart phone". Not to mention the large numbers of second-hand, less-than-cutting-edge smart phones out there, the older models resold when the original owner upgrades.

[Elheru Aran]

Ah, well, I stand corrected (although qualified we did not avail ourselves of the program).

Nonetheless, there is some confusion and overlap between "basic bricks" and "smart phone". Not to mention the large numbers of second-hand, less-than-cutting-edge smart phones out there, the older models resold when the original owner upgrades.

Oh, that's true. Some brick phones could be fairly high end, my wife had one for a short time that could do some basic Internet and in theory could take apps. The government is obviously not going to be handing out iPhone 6's or whatever. I suspect that when they do start handing out smartphones they'll be on a level with the minimum of what pay-to-play phone companies offer nowadays... low RAM, low memory, capable of handling a few onboard apps.

Anyway, that said, yes, there are a lot of smartphones out there, many in the hands of people below a financial level you would expect. I would be surprised to find out that most of them *aren't* secondhand or refurbished, though. I know my wife and mine's smartphones are secondhand, we bought them used.

One option for lower income people is a budget provider like the one we use-- Ting. There's a flat fee at various levels of usage for data, text, and voice, respectively. Something like five bucks, ten bucks, then twenty (or is it ten-twenty-thirty? Whatever). If you limit your usage, you can come out pretty respectably. My wife and I pay only about forty-sixty bucks a month for two phones total.

[Simon_Jester]

It's not very hard to just program the trucks to run on relatively high traffic roads or during business hours, both of which most trucks do anyway. There aren't a lot of good reasons to be driving an eighteen-wheeler down a narrow rural highway at two o'clock in the morning, as opposed to parking it in a depot and finishing the drive at seven o'clock.

Unless I'm missing something about the trucking business.

Yes, you are.

Truckers drive at night because there is less traffic overall. Even for automated vehicles, less traffic on the road translates to better efficiency.

There are also scheduling issues – where I work nearly all trucks arrive at night so they can be unloaded and the new stock, particularly food, on the shelves between 6 am and 8 am when the first surge of customers arrive.

Package delivery services usually give a “guaranteed delivery by 8 am” or similar option, but for that to happen those guys have to drive overnight, too.

For truly a truly cross-country journey there are still trucks stocked with crews that can drive most or even all of the 24 hours in the day to move stuff across the continent in a minimum number of days.

Ahem. Point of order, I was specifically referencing narrow rural highways. The trucks have good reason to drive on the interstates and other freeways overnight, this I was already aware of (I have done... not a lot, but quite a bit of nighttime freeway driving over the past 18 months). But they're not necessarily having to drive through areas where it would be easy for robbers to operate (the interstate isn't really one of them).

However, thinking about it more, there are quite a few areas of the country where the 'narrow rural highways' are the biggest roads for hundreds of miles, in which case you can't just give up driving them during nighttime hours for fear of banditry, especially not in winter.

[Raw Shark]

Anyway, that said, yes, there are a lot of smartphones out there, many in the hands of people below a financial level you would expect.

Kenny, the homeless schizophrenic guy who crashes at 20th and Blake, has a better phone than I do. I point this out to him every time he asks me for money. He usually acknowledges that as a fair point.

[Simon_Jester]

To be fair, I'm still using a 2007-vintage flip phone. It's battered and few-featured, but it does literally every thing I have ever wanted my phone to do. And, well. I knew I'd drop my phone a lot, being me, so I asked for the indestructible model.

It would appear I got it.

But as a side-effect, I never judge anyone for having a fancier phone.

[FaxModem1]

Wall Street Journal

809
COMMENTARY
Why Restaurant Automation Is on the Menu
Forget about robot waiters, but technology helps cut government-imposed costs. And consumers like it.
Using an interactive kiosk to place a food order at Eatsa in San Francisco. ENLARGE
Using an interactive kiosk to place a food order at Eatsa in San Francisco. PHOTO: GETTY IMAGES
By ANDY PUZDER
March 24, 2016 6:15 p.m. ET
301 COMMENTS
Consumer preferences, reduced technology costs and government policies that increase labor costs are driving a trend toward automation in the restaurant business. If you make something more convenient and less expensive, it tends to catch on.

As recently as the 1960s, gas-station employees would rush to fill your car’s tank, wash the windows, check the oil and put air in the tires. Telephone operators made your long-distance calls and bank tellers cashed your checks. Those jobs now are either gone or greatly diminished.

Today, we reduce jobs whenever we shop on Amazon instead of our local retail outlet, use an Uber app rather than calling a cab dispatcher, order a pizza online, use an airport kiosk to print boarding passes, or scan groceries. Each of these changes in behavior has increased convenience and reduced labor costs—and competitive businesses pass the savings to their customers.

Advertisement
In the restaurant business, the increasing impact of technology doesn’t mean that a robot will soon roll up to your table and say, “Hi, I’m Trudi4783. I’ll be your automated server today.” But technology can replace certain functions. Touch screens are already transforming the way food is ordered in many restaurants.

In late 2013, Chili’s and Applebee’s announced that they were installing more than 100,000 tableside tablets at their restaurants across the country, allowing customers to order and pay their bill without ever talking to a waiter. The companies were soon followed by Buffalo Wild Wings, Panera Bread, Olive Garden and dozens of others. This means fewer servers covering more tables. Quick-service restaurant chains are also testing touch-screen ordering.

But technology at the counter poses challenges. Some guests find it impersonal or confusing. Customer service is still very important and, for now, having access to a person is important to assure smooth experiences for everyone. Increased automation also makes it more difficult to build a company culture. There are maintenance costs, and the business has to hire IT professionals to service the technology. The technology can malfunction, spoiling a patron’s visit.

So why the increased use of technology? The major reason is consumer preference. Research shows that many appreciate the speed, order accuracy, and convenience of touch screens. This is particularly so among millennials who already do so much on smartphones and tablets. I’ve watched people—young and old—waiting in line to use the touch screens while employees stand idle at the counter.

The other reason is costs. While the technology is becoming much cheaper, government mandates have been making labor much more expensive.

In 2015, 14 cities and states approved $15 minimum wages—double the current federal minimum. Additionally, four states, 20 cities and one county now have mandatory paid-sick-leave laws generally requiring a paid week of time off each year per covered employee. And then there’s the Affordable Care Act, which further raises employer costs.

Dramatic increases in labor costs have a significant effect on the restaurant industry, where profit margins are pennies on the dollar and labor makes up about a third of total expenses. As a result, restaurants are looking to reduce costs while maintaining service and food quality.

Highly automated models have limited applicability for restaurants with more complex menus. For example, at CKE Restaurants, the company I lead, our Carl’s Jr. and Hardee’s employees make biscuits from scratch. They bread chicken tenders by hand, prepare complex burger orders, hand-scoop the ice cream for milkshakes, and the restaurants offer table service. None of these tasks can be effectively automated, and we wouldn’t want them to be.

But a new restaurant chain called Eatsa has almost completely automated food service, from ordering to handoff (back-of-the-house employees to prepare the food). It’s not really a new idea—Eatsa is a digital upgrade of the automat restaurants that had a long run of popularity in many U.S. cities beginning about a century ago. Based on my visit to the Eatsa restaurant in San Francisco—there is another in Los Angeles—it has a modern and clean feel, and a strong millennial customer base that is responding well to the restaurant with the slogan “Better, Faster Food.”

It isn’t a coincidence that this concept arose in San Francisco, which for years has had one of the country’s highest minimum wages and some of the nation’s most business-burdening labor regulations. The result: Since the recession ended, median family income in San Francisco has increased to about $78,000 from $70,000, but the poverty rate increased to 13.3% from 11.5%. So some in San Francisco are making more money, but more people are living in poverty. Why?

Part of the problem is that those with technical skills make good livings, while those who don’t have those skills are being priced out of entry-level jobs.

The low-labor Eatsa concept may be a harbinger of the future. If consumers prefer it, or if government-mandated labor-cost increases drive prices too high, the traditional full-service restaurant model, like those old gas stations with the employees swarming over your car, could well become a thing of the past.

Mr. Puzder is the chief executive officer of CKE Restaurants.

More weighing in on the issue.

[FaxModem1]

Gawker

Follow
Automation and Basic Income


Hamilton Nolan
Today 1:46pm
Filed to: THE FUTURE
9.2K
9
Automation and Basic Income
Image via Eatsa/ FB
Without meaning to, the CEO of a restaurant corporation that is busily trying to automate employees out of existence is becoming one of the best spokesmen for the idea of providing all Americans with a universal basic income.


The Brilliant Simplicity of a Guaranteed Minimum Income
Read more
Andy Puzder is the CEO of CKE Restaurants, which runs the Carls Jr. and Hardees fast food chains. In 2012, Puzder made about $4.5 million. But he is a true believer in the iron laws of free market, and often writes about the many wonders of capitalism.

ADVERTISEMENT

Last week, Puzder made news when he said that he wants to open an “employee-free” restaurant, where all front-of-house tasks are automated. Today, he follows up with a Wall Street Journal op-ed that preaches the inevitability of automation in the restaurant industry. He says that consumer preference and cost savings will soon ensure that many front-of-house restaurant jobs are replaced by computers. “If consumers prefer it, or if government-mandated labor-cost increases drive prices too high,” he writes, “the traditional full-service restaurant model, like those old gas stations with the employees swarming over your car, could well become a thing of the past.”

Puzder here poses as a rational, mild-mannered businessman who is simply taking stock of reality. And he may well be correct in saying that many restaurant jobs will be lost to automation—not least because there are restaurant industry CEOs like Andy Puzder. Rather than raise prices in order to raise wages, they would prefer to eliminate jobs entirely.

Let’s assume Puzder is correct. And let’s further assume that automation begins eliminating large numbers of jobs not just in the restaurant industry, but in all sorts of service industries. Millions of lost jobs. Millions of workers that no longer fit into our modern economy. Millions of families without a way to pay the bills. Automation may be an opportunity for corporations and shareholders, but it is a threat to the American middle and lower classes.

So it is surprising that Puzder does not make the tiny logical leap towards advocating a universal basic income for every citizen in America. If you truly believe that automation could soon wipe out millions of jobs—without opening up an equal number of job opportunities in another sector of the economy—it is common sense to ask yourself, “So how will all those workers provide for themselves?” (Millions of industrial and manufacturing workers were automated out of jobs in recent decades, but were always sold the vague promise that “retraining” would allow them to settle into other industries—computers, perhaps.) If our wonderful technological progress actually shrinks the number of available jobs, people still need to eat. Perhaps the simplest and most straightforward way to ensure that these victims of progress do not end up homeless is to just raise taxes enough to put a small, but adequate, basic income in everyone’s pocket. Indeed, some of the strongest advocates of the basic income model are Silicon Valley people who are the strongest believers in the idea that machines are the future.

If you want to welcome the machines, you have to take care of the people. If you don’t like basic income, you need to offer a better idea. Otherwise you’re just a Puzder.

And Gawker comes in with a response.

[bilateralrope]

The message I'm getting from the first article is that the jurisdictions with laws that force companies to treat their employees the best are the ones most likely to have jobs automated away first.

I think that's a good thing, as it means the countries who have to solve the problems of automation first are the ones who already show more for the general population.

[Stormin]

Doing away with labor laws would buy those jobs what a couple years at best? Pretty bad years for the employees too.

[bilateralrope]

Doing away with labor laws would buy those jobs what a couple years at best? Pretty bad years for the employees too.

That's not what I'm saying.

I'm saying that the countries with those labour laws are the countries more likely to implement a solution that is good for the people who lose their jobs to automation. The countries more likely to suffer the problem first are the ones more likely to implement a solution good for everybody.

[Broomstick]

WHY do you assume that?

Why do you assume the haves give any sort of damn about the have-nots?

The current social meme in the US is that the poor are parasites. What is the usual response to parasites?

[U.P. Cinnabar]

WHY do you assume that?

Why do you assume the haves give any sort of damn about the have-nots?

The current social meme in the US is that the poor are parasites. What is the usual response to parasites?

Burn them off with lit cigarettes.

This is also the country which once proudly claimed no one ever went hungry or was homeless there.

[Simon_Jester]

Doing away with labor laws would buy those jobs what a couple years at best? Pretty bad years for the employees too.

That's not what I'm saying.

I'm saying that the countries with those labour laws are the countries more likely to implement a solution that is good for the people who lose their jobs to automation. The countries more likely to suffer the problem first are the ones more likely to implement a solution good for everybody.

Stormin, bilateralrope, I think you two are saying the same thing, just in the sense of "opposite sides of the same coin."

Bilateralrope is pointing out that countries with good labor laws (which makes labor expensive) will see automation early in the process... but these are the same countries likely to have a solution for "what will we do with all the surplus labor" aside from 'starve in the gutter.'

Stormin is pointing out that countries which don't have such labor laws will see automation later in the process... but that it will happen anyway and that people will be miserable in the meantime.

WHY do you assume that?

Why do you assume the haves give any sort of damn about the have-nots?

The current social meme in the US is that the poor are parasites. What is the usual response to parasites?

The US is not the only country in the world, Broomstick. Nor are attitudes toward the poor uniform throughout the US, and regional government has some significant influence over the fate of the poor in any one place.

[Zaune]

And in any case, wasn't it Churchill who said, "You can always rely on the Americans to do the right thing, after they've tried everything else"?

If -when- it comes to the point where it's a choice between implement Universal Basic Income or have everyone who's unemployed for more than twelve months put to death, Congress will implement UBI. They'll wait until years after it's obvious that nothing else is going to be remotely adequate to the task, the Scorched Earth Republicans will probably kick up a hell of a fuss and they'll probably do a half-arsed job of implementing it, but implement it they would. The alternative would never fly, not without some sort of latterday Reichstag Fire incident and a real wannabe Fuhrer who has the talent to pull it off.

[bilateralrope]

WHY do you assume that?

Why do you assume the haves give any sort of damn about the have-nots?

The current social meme in the US is that the poor are parasites. What is the usual response to parasites?

Because I'm not just thinking of the US. Other countries do care more about the have-nots, and those are the countries I can see having robots taking human jobs first. For example, I was unemployed here in New Zealand for 7 years. The unemployment benefit here is a lot more generous that what you had to make do with while you were unemployed. We have a minimum wage increase coming into effect in april, which was put through by the rightmost of our two major political parties.

Also, there are two factors I can see which would encourage some elites to prefer basic income as the response to the problems of mass unemployment:
- Democracy. Get enough people unemployed, or worrying about being unemployed, and they will elect politicians who will implement policies that benefit them. Sure, propaganda and different voting systems change where that point is. But it will still be there unless someone prevents the poor from voting (which I expect some states in the US to try).
- Stability. A basic income keeps the current elites on top, they are just paying more taxes. Other responses will change who the elites are. For example, if the unemployed don't have money, they can't be customers. Reducing the income of various companies, causing the elites who are supported by those companies to lose their money and influence.

Stormin is pointing out that countries which don't have such labor laws will see automation later in the process... but that it will happen anyway and that people will be miserable in the meantime.

I thought he was saying that I was suggesting removing labour laws and saying why that isn't a long term solution.

One of us misunderstood the other and I tried to clarify. But Stormin didn't say anything that I disagree with.

[Simon_Jester]

- Democracy. Get enough people unemployed, or worrying about being unemployed, and they will elect politicians who will implement policies that benefit them. Sure, propaganda and different voting systems change where that point is. But it will still be there unless someone prevents the poor from voting (which I expect some states in the US to try).

They may try, but the US actually has a constitutional amendment against doing that directly- you can't levy a tax on the right to vote, nor can you create 'tests' that bar people from voting.

The reason is that such taxes, and such tests (frequently designed to be unpassable if the grader didn't like you) were commonly used as tools to forcibly disenfranchise blacks during the Jim Crow era in the American South. When it was pointed out how stupidly, ridiculously, blatantly unfair the voter restrictions were, the response was to pass the Twenty-Fourth Amendment and put a stop to it.

- Stability. A basic income keeps the current elites on top, they are just paying more taxes. Other responses will change who the elites are. For example, if the unemployed don't have money, they can't be customers. Reducing the income of various companies, causing the elites who are supported by those companies to lose their money and influence.

To some extent this is true. On the other hand, the modern American economic elite doesn't really have much trouble cashing out their stock possessions in one company and buying stock in another if it looks like another one is going down.

If something horrible happened to Microsoft, Bill Gates wouldn't stop being one of the richest and most powerful men in America, for instance.

A significant fraction of the American uppermost upper class may realize that the situation is bad for them in the long run anyway, though many, many will not grasp the nature of the problem because they are too isolated from it socially and geographically. And some will grasp it but not care.

[Solauren]

Automation is a good thing, to a point.

However, as automation increases, joblessness is going to go up.
I can't even imagine the unemployment rates if ever fast-food restaurant was suddenly automated.

This will put a strain on the economy. Both form the unemployed, and form the taxpayers that would be funding the social welfare programs.

We'll either see corporate tax hikes to offset this, or regulations put in place to prevent over-automation.

[bilateralrope]

They may try, but the US actually has a constitutional amendment against doing that directly- you can't levy a tax on the right to vote, nor can you create 'tests' that bar people from voting.

How are the courts looking in regards to the constitutionality of voter ID laws ?

To some extent this is true. On the other hand, the modern American economic elite doesn't really have much trouble cashing out their stock possessions in one company and buying stock in another if it looks like another one is going down.

True if it's only a few companies going down. But when it's a lot of companies down, the companies that have those companies as customers are also going to be in trouble.

A significant fraction of the American uppermost upper class may realize that the situation is bad for them in the long run anyway, though many, many will not grasp the nature of the problem because they are too isolated from it socially and geographically. And some will grasp it but not care.

Sadly true. The only question is how large that fraction really is.

[Starglider]

What happened to the traditional socialist solution of getting the government (e.g. 90s UK Labour government) to hire an unlimited number of obstructive beurecrats? The amount of pointless paperwork the government can generate is unlimited, and no particular skills are required. Of course if you want this to sound good call it something like 'addressing the tragic deficit in the number of social workers available to tackle our pressing community justice issues'.

[MKSheppard]

Also, this is belated, but 20 people per shift in a standard size drive-in? Fucking lol. Try 10, max. 20 people in the average back-house of a fast food restaurant, nobody would be able to move. 30-40 is the typical total complement. 60? Seriously. Maybe if you've got a really busy location in a big city or something, running 4 shifts for the peons maybe with a lot of part-timers, I could see up to 60. But the typical fast-food joint is *not* going to run that many people.

Ballparked from a quick google search to get pertinent data in order to generate a order of magnitude estimation of the costs to be saved from automation.

Result: It's more than enough once the price of the McBurger 9000 machine falls below say $100K (random guesspoint), allowing multiples of them to be bought within the average $1 to $2 million setup price of a McBurger joint, so that production isn't interrupted if one of them throws a gear and is down for 30 minutes; and also cheap enough that the cost of them can be recouped in a few years of not having to pay for pimply teenagers.

[MKSheppard]

And in any case, wasn't it Churchill who said, "You can always rely on the Americans to do the right thing, after they've tried everything else"?

If -when- it comes to the point where it's a choice between implement Universal Basic Income or have everyone who's unemployed for more than twelve months put to death, Congress will implement UBI.

UBI could be implemented by republicans.

Just make a tradeoff for UBI.

No more Social Security, No more Medicaid, no more EBT, WIC, etc. All that is rolled into UBI.

Massive savings in bureaucracy and duplication of services. ONE CARD TO RULE THEM ALL.