Who Controls Diners’ Data? OpenTable Moves to Assert Control
wsj.com
wsj.com
To add some color to this, I recently was shown my customer notes by the GM at a medium-high end Michelin starred restaurant where I've been a regular for a long time. There's some basic notes from the early days about the name of my partner I was dining with, and food allergies and preferences. There's also a long, long list over several years of every extra dish that was sent out (I generally get 2-3 extra courses at this place), with the goal of not duplicating those courses. The notes have tailed off for the past few years because, probably because everybody knows me and has chatted with me at this point, so they know they can just ask me for whatever, and that I'm a pretty easy customer.
So like I said, I'm comfortable with this level of information in the hands of the restaurant. Pretty much everyone I've talked to in the industry is interested in this information strictly for the purposes of better service - nobody has grandiose plans of ever using this data outside of their own restaurant. OT provides a nice service in standardizing and simplifying the reservation process, but I'm inclined to think this is an power grab to try to force restaurants to stay within their ecosystem - and frankly, at the end of the day, I don't much care if OT lives or dies, but I do care about my local restaurants.
Their founder Nick Kokonas is quite interesting and seems to have a bit of an ongoing fight with OpenTable, Tock even built a tool where restaurants can analyze if they're paying too much for OpenTable's services [2].
If it interests you, check out his interview on Tim Ferris' podcast, it's well worth the listen. [3]
[1] https://www.exploretock.com/join/ [2] https://medium.com/tock/weve-built-a-website-to-check-if-you... [3] https://tim.blog/2018/10/18/nick-kokonas/
Fight is probably a strong word. They just think people are not really analyzing whether they are actually getting value for it :)
And also SVN. And apparently Apple, developing webapps, which I really don't understand since it doesn't seem like they have a (any really) strong corporate consulting arm.
I get that restaurants have to protect themselves against no-shows, and I have no problem handing over a credit card number so that they can charge a no-show fee. But paying the entire cost of the meal up front is a line that I won't cross. There are too many excellent alternatives out there still doing business the old fashioned way, thank God.
It's also about who the relationship is with. OpenTable, as you can see, believes the relationship is between you and OpenTable. Tock generally believes it is between you and the restaurant.
It's not at all about whether you can pay or not.
"I get that restaurants have to protect themselves against no-shows, and I have no problem handing over a credit card number so that they can charge a no-show fee."
> It's not at all about whether you can pay or not.
I never said it was.
""I get that restaurants have to protect themselves against no-shows, and I have no problem handing over a credit card number so that they can charge a no-show fee."
"
Did you ever consider this may not be at all a viable product model, given it's been tried and failed miserably?
IE your solution may not be a solution that works.
If your level of trust is that you expect restaurants to cut corners if you pay up front, i guess i'd suggest not letting other human beings prepare food for you, since they already paid in advance for the ingredients, and so they already have an incentive to cut corners in your model regardless of Tock or not.
Put another way, before you eat, you have already cost them money whether you eat there or not, and whether you use Tock or not. Additionally, basically all menus are fixed price and the tips don't got to the restaurant. So there is no reason people will cut corners more due to tock.
That's news to me. Restaurants that I eat at do this all the time. Reference?
(I have a very hard time believing that now-show fees fail while pay-up-front succeeds. It makes no sense that consumers would accept the latter but not the former.)
Not all the restaurants on Tock are pre-paid, for whatever that's worth to you.
Michelin doesn't give stars to LA restaurants any more, but when we lived there we were regulars at Patina, Spago and Providence (and the Water Grill before the chef quit to go to Providence).
So yeah, I'm pretty sure we are solidly in Tock's target audience.
> Not all the restaurants on Tock are pre-paid, for whatever that's worth to you.
Not even FaceBook is 100% evil.
A good clue that your response is out of line is that you started it with "LOL". I do that too, all the time (more often, the single-word sentence "What."), and have learned to notice it as a tell that I'm writing something I'm not going to be happy having said later. The edits I make when that happens always improve my writing.
> You are probably not eating at the kinds of restaurants that are Tock's mainstay. In San Francisco, that's places like Atelier Crenn and Saison.
Atelier Crenn has two stars. Saison has three. (And I have in fact been to Saison.)
> The Publican or Zuni Cafe
Neither of these has a star and both of them use OpenTable, not Tock. I have not been to either one.
So I'm sorry, but I am utterly at a loss as to what point you were trying to make.
My point is that lots of fine-dining restaurants can metabolize a no-show in ways that restaurants like Atelier Crenn and Alinea cannot. Kokonas claims that a single no-show at Alinea is the difference between a profitable and unprofitable day for them. That's obviously not the case at Zuni. That's why Atelier Crenn is on Tock, and Zuni is on OpenTable. Which is the point 'DannyBee was making.
† Roister, which is in the Alinea group, is on Tock, and is an a la carte restaurant and, like all a la carte restaurants, can't possibly charge the meal up front because they're not prix fixe. Once again: plenty of a la carte restaurants are also on Tock, presumably because Tock is a better partner for restaurants than OpenTable is and is certainly a more pleasant experience for customers.
(BTW, since you offered a critique of my writing style, let me reciprocate: you are playing a game where you are making me guess at the point you are trying to make, and then giving me a hard time when my guess turns out to be wrong. That is childish, and more than a little annoying.)
Also, FWIW, I don't dispute that the restaurant business is extremely difficult. I certainly understand why restaurants want to charge up front, just as I understand why software developers would rather sell subscriptions than licenses. All I'm saying is that I don't like it, and I will not do business with anyone who adopts either of those models if I can avoid it (and in the case of restaurants, I can). I'm not saying anything about what anyone else on either side of the transaction should or should not do.
I can get a same-day table at Momotaro or Kai Zan in Chicago. I can also pre-pay for an omakase seating at Kyoten. Stipulate that they're places of comparable quality. Momotaro and Kai Zan are traditional restaurants. Kyoten is a 9-seat omakase-only restaurant that does two seatings a night. Momotaro and Kai Zan are on OpenTable; Kyoten, for obvious reasons, won't be.
Things sucked for restaurants before Tock, and suck somewhat less now, so the fact that restaurants sucked it up and ate the costs of no-shows before Tock existed is not a persuasive argument.
Because you've made a moral argument out of it, I'm going to keep pointing out that Tock hosts a la carte restaurants just like OpenTable, and, for obvious reasons, doesn't demand prepayment for them.
No, I don't believe I have. I've just stated my personal opinion.
I understand not going to Kyoten or Atelier Crenn because you don't want to pre-pay (also, because you don't want to pay $450/person before drinks). I don't understand not going to Roister or Petit Crenn Brunch, both of which are a la carte and neither pre-paid, simply because they're on Tock.
Yes, but I didn't actually know that before. Every encounter I have had with Tock has been pay-ahead, and so I assumed that was their business model.
BTW, w.r.t. passing moral judgement, I'm surprised that you didn't pick the more low-lying fruit:
> Not even FaceBook is 100% evil.
That was a moral judgement, but about Facebook, not directly about Tock. I don't like Tock because they (AFAICT) enable and encourage the pay-ahead model, which I don't like. But I wouldn't call them evil.
> I don't understand not going to Roister or Petit Crenn Brunch, both of which are a la carte and neither pre-paid, simply because they're on Tock.
I had never heard of either of these places before you mentioned them, but no, I would not boycott them simply because they're on Tock.
Besides restaurants are the outlier. Most experience-based services have a pay-up-front model: concerts, sports games, transportation, conferences, movies, etc. The reason restaurants generally don't is because the cost isn't usually predictable up front for each person. For fine prix fixe dining, it is.
Yes, that's true.
> I see no problem in leveling the playing field.
Neither do I. That's why I wrote:
"I get that restaurants have to protect themselves against no-shows, and I have no problem handing over a credit card number so that they can charge a no-show fee."
You are the second person I've had to point this out to. Good grief, doesn't anyone actually read the comments they are responding to (or downvoting)?
As you say, you're fine with restaurants addressing the reservation trust imbalance, but you apparently don't like the way a ticketing system accomplishes that. Why? Because you don't like the way it feels as an experience?
Yes. Exactly.
Imagine if you took the menu of the French Laundry and served it in a McDonalds. The exact same food. Would you still pay $300 a plate?
I disagree that restaurants that use a ticketing system lose their incentive to deliver the best experience they can. These aren't one-off encounters. Repeat business, reputation, reviews, and word of mouth are all based on the actual experience. If the food or atmosphere is bad, then a fine dining place won't last, regardless of the payment dynamics they have.
I am not saying that this has happened, only that the pay-in-full-in-advance model removes one of the incentives that keeps it from happening. It may be that the removal of this incentive won't actually change anything, I don't know.
> These aren't one-off encounters
In the case of high-end restaurants, they often are. Not very many people can afford to be regulars at the French Laundry.
> If the food or atmosphere is bad, then a fine dining place won't last,
Maybe. But at the extreme high end, a restaurant can let things slide and coast on its reputation for a pretty long time.
You are implicitly believing in their reputation by selecting the fine dining establishment. I don't really do fine dining so excuse me if this is ignorant, but it seems to me you don't really have recourse after the fact.
Problem is that there are millions of potential customers all who may or may not be flakes. When business could be make or break by one reservation backing out, they have much more to lose way more often than you having an awful experience at a reputable establishment. Tock makes sense in this scenario but you seem like you're being completely unempathetic to the economics of the situation.
The one time this actually happened to me we walked out before we actually got any food. But yes, we didn't pay (obviously). If we'd paid ahead it would have been a real problem.
> Problem is that there are millions of potential customers all who may or may not be flakes.
Yes, I understand that, and I am not unsympathetic to the restaurant's need to mitigate this risk somehow. But fobbing 100% of the risk back onto the customer is not the right answer IMHO, and any restaurant that does this is not going to get my business. There are lots of other possibilities (50% up front, no-show fee, reputation tracking) that I would be happy to sign up for, but not that.
I get it for some of the destination restaurants. If a three star Michelin restaurant is in the countryside of Spain, they have to protect against last minute cancellations, and even no show fees would probably be less revenue than the full meal price. We could argue on the merits of whether that type of restaurant should be seen as a similar experience as theatre, but since people seem to, the model makes logical sense to me at the high end.
My wife and I are frequent patrons of high-end restaurants. 99% of the time we have a great meal, but very occasionally we have an experience that is an absolute nightmare. On one occasion we went to a very well known (two Michelin star) restaurant in the Bay Area. They offered both a tasting menu and a la carte options. When we made the reservation (by phone) we told them that 1) we wanted to do the tasting menu but 2) my wife doesn't eat red meat. They said no problem.
Well, it was a problem. When we asked if they would substitute the red meat courses on the tasting menu they refused. We even offered to pay the price of a fish course from the a la carte menu. They still refused. (It was the chef who refused. The rest of the staff were as mortified as we were.) So we walked out, which we have not done before or since.
So I know for a fact from first hand experience that even a high end restaurant will occasionally treat their customers like shit. When that happens, I want to retain my leverage.
I've never walked out of a restaurant after the food was served. I've had poor experiences at nice restaurants where little was done to remedy the situation, and I've had times where simply moving tables resulted in a free meal.
I realize Yelp and Tripadvisor have been known to hide or remove bad reviews, but this often is the best recourse of action along with contacting the manager or owner, or potentially disputing the charge with your cc company.
I'm not sure if Tock has any policy specifically in this instance? My guess would be that they leave it to the you and the restaurant to figure out?
Interestingly enough, the co-founder of Tock and Alinea just had a public dispute with Cat Cora of "Iron Chef." I've been to Alinea and Next, and had incredible service, but things happen.
This is true.
It only works in extremely high end ( think $400/per person ) kind of places with super limited seating. Or in a fast casual place that competes with the likes of Chipotle.
Because the mostly-anonymous diner has effectively no reputation to lose by not showing up. The restaurant has everything to lose by not continuing to produce good meals that satisfy their customers.
Also, we've had a few absolutely horrible experiences at some very high end restaurants. One case was so egregious that we actually walked out. Maybe our experience was unusual, but if a restaurant consistently treats its customers badly it's going to fail whether or not it collects the money up front. And if a restaurant does treat me like shit, I want to have some recourse other than just bitching and moaning about it.
... but, who cares? If I somehow behaved badly enough to get banned, I could just reserve a table with a new OT account, or just call the restaurant; it's not like they ask for references and do a background check before taking the reservation. A "bad OT table record", if such a thing even exists, costs you nothing.
Well, I presume the restaurants care. If I'm a chronic no-show, a restaurant may not accept a reservation from me, or maybe limit me to off-peak times. I can think of a lot of ways that information could be effectively leveraged.
When the restaurant charges a no-show fee, and then still fills the table with walk-ins, then the restaurant actually makes more money on people not showing up. It's not like if someone misses their reservation the restaurant leave the table empty for 90 minutes.
On one hand, a friend of mine runs a contracting business has told me that the people who put down a substantial deposit are good customers. The ones who want to pay nothing up front are the ones who cause trouble at payment time.
I kind of thought the price of the meal was what kept things exclusive, but not actually excluding people via tactics like this.
OTOH, people don't necessarily like to have their noses rubbed in the fact that there's only a loose correlation between meal price and the restaurant's variable ingredients cost.
> [OpenTable] will block restaurants from giving competitors access to diner data acquired through OpenTable unless they pay new fees
Ah. In any case, not sure why OpenTable believes they own this information. If I make a reservation at a restaurant, particularly if I follow through and actually eat there, I fully expect the restaurant to own the knowledge about that reservation.
Probably within the terms and conditions that no one reads.
My meal is a one time transaction where you provide food in exchange for my money.
When you use a service like Opentable, it's hard to claim you thought it was a "one time transaction" that would be forgotten about when it shows your reservation history to you every time you log in.
Except many now use a service provider to manager their reservations. Once they have your phone number (to confirm) it's no longer a one time transaction.
Either this matters to you, or it doesn't. But if you don't want to make reservations over phone because you are afraid they will share your data or something, then don't.
I've never had a restaurant actually call to confirm I was coming.
Very interesting. Perhaps it's regional. Based on the number of $100 credits I've gotten, I must have booked hundreds of times through OpenTable, and I've never once gotten a confirmation call.
This is what I do. I see no reason or advantage to bringing a third party into what is a really simple transaction between me and the restaurant.
It also could be the time you called, or maybe your # is flagged as spam.
opentable is not profitable and have no market to exist for what they say they offer: reservation convenience, which increases trafic, for a cost to the business.
so they offer it for free or much cheaper, amass a lot of data and sell it on the side. effectively bypassing their inexistent above-mentioned business proposal.
OpenTable came into existence because of simple value proposition. For the restaurant, it simplifies the process of booking reservations. For the diner, it provides an easy way to access availability of any given time slot quickly across many places. Seems like a solid business that provides a nice service.
Unfortunately, that's not enough.
They took a big fat IPO, sold a couple times, and are now owned by Priceline. If they don't do the "surveillance capitalism" thing, that makes them a money loser-- given the obscene amount of money pumped in to "scale" them.
The best thing we can do is to make a phone call to the restaurant instead, or, just show up and hope for the best. Perhaps in time the restaurant industry will come up with an open standard webservice to do this stuff instead of depending on OpenTable, but I won't hold my breath.
If it's the latter then I'm surprised there aren't already cheap plugin systems for Wordpress that would do the same thing.
I didn't realise that OpenTable has a whole booking.com style website, including the "booked 15 times in the last microsecond!" nonsense. Feeling somewhat like a luddite now, I've only ever used it when trying to book a table at a specific restaurant (i.e. via the restaurant's website).
It's mostly used to list the less busy "collar hours" (the hours adjacent to any rush) in the hopes that an alternate means to advertising might flip an empty table to a populated table.
I'll avoid talking to a human to make a reservation if possible, but I've had dozens of occasions where OpenTable shows no available reservations at say, 7pm and a quick phone call is all it takes to land the time I'd like.
> more diners because they're able to compare multiple places for a single time slot?
Putting yourself in the shoes of a corporate event-planner trying to find a rez for VIP's at the first available expensive steakhouse, yeah, you're going to go straight to OpenTable and not bother with the phone. The hip edgy steakhouse that doesn't play with OpenTable will miss out.
In this case it appears open table is limiting data access to third parties (I'm surprised this wasn't already in place).
I'm not sure what data OpenTable has or what they are now requesting restaurants pay to share.
I believe when you booked a reservation the restaurant got to see all of this.
One of the key things I built while there was around data importing. The burden of getting the data to us was mostly on the customer, but some customers had a seriously hard time moving away so we had to build custom tools specifically for some competitors.
One product would only let you download encrypted backups, but they refused to give the decryption key. In their minds, this was following their policy to let you have your data, even if it was only readable by them. We ultimately had to abuse their APIs to scrape the data out.
At least OpenTable is giving the option of exporting data, because not everyone in the industry does it, and the story above was not an isolated incident. We scraped data all the time, but only with the customers permission.
Of course, I don't trust restaurants and hotels to not abuse my info, so...
Which is 100% abusing the relationship I have with them.
Who's working on this?
Jokes aside, let the market figure it out. Authorized aggregators (Qualtrics, Nielsen) will emerge; ad tech will compete for your real data; correlations will continue behind the scenes between your behavior (the thing the companies actually own) and your data; maybe you never will, and we're back to guessing which half of your marketing is working.
The market will solve this, FB can play along or go jump.
I have to confess that, as a user, I find it useful to be able to book the maximum number of restaurants through one or two apps whether or not they also support making reservations through other means. Especially on mobile, I'm not a big fan of navigating through often crappy web sites and potentially having to provide a bunch of info to find there are no reservations available at 7pm. OpenTable is just a few clicks.
Me neither. That's why I call the restaurant instead of using their web page. The whole thing is done in a couple of minutes.
Also, with an app, I can see upfront what my options are and potentially see if I have better choices elsewhere.
I stopped going to those restaurants because of the number of times that I've shown up only to be informed that the wait list is over an hour long and we've ended up having to eat at the greasy spoon down the road because we're hungry and have run out of time.
If I can't make reservations (directly with the establishment -- things like OpenTable don't count), I won't eat at the establishment. The gamble isn't worth it.
For example, my wife and I went to a PF Changs on a holiday. We had a reservation we scheduled at least a week ahead of time, but it meant nothing, we were put at the end of the queue. It wouldn't have made a difference if we never made the reservation at all.
It's the (now-)unsavoury point of platform businesses, who step into the business relation between a user and a service provider to mine and aggregate and profile data to provide value in a surveillance economy. Would this even fly in GDPR-land, where you can only process data within the narrow confines of the actual business relationship?