New York restaurants fight back against reservations by bots
bloomberg.com
bloomberg.com
Because let's be honest -- dining at certain highly exclusive restaurants on a Friday night is just as much of an event as going to the theater. These aren't neighborhood restaurants with average food that are meant for locals that we're talking about here. These are fancy. If you want to eat at 7 pm on Friday, why shouldn't it be more expensive than Tuesday at 5 pm?
And if restaurant owners don't want to take advantage, they can always offset it by lowering the food and drink prices slightly the whole week long. (Not that they're obligated to -- making a profit is already hard enough as is.)
that's smart, that way you get tricked into including yet another line item in your tip
Out of curiosity, how does that work? When making a reservation do you have to provide your credit card? I highly doubt that given that it's Germany :) Seriously though, how do they make people pay?
In my experience, restaurants taking deposits will actually charge the deposit to the card at the time you are making the reservation and credit it towards the final check amount if you do show up.
“My work has an excellent and free cafeteria. I just eat there and stuff my pockets with things for the company bus ride to my apartment in the hive my company developed.”
“I’m kind of creeped out by restaurants because of the whole power dynamics of someone there to ‘serve’ me. And on top of that they want to know all kinds of stuff about what I want to eat. I think they are collecting all that information and then targeting me with advertising.”
I'm not aware that there is variable or dynamic pricing component to it, however. That's a great idea and something I bet they are considering.
In practice, dynamic pricing it is not a panacea. You still need to beat the arbitrage market. Charge too much: customers don't reserve. Charge too little: brokers snap it up.
I bet there are some eager GMs thinking about it.
A couple reasons restaurants don't do this:
1) Loss of quality control over customer experience. For example they provide a $100 dinner, but the client expects a $200 dinner. That creates bad experience
2) Desire to maintain accessibility on price point (same reasons artists don't charge more for tickets) and perceived inequities of charging extra for reservations
3) Rewarding loyal customers who value the food / brand / hospitality rather than the highest bidder which tends to bring in out-of-towners, Amex centurion card holders, wannabe influencers -- people that don't help create loyalty
There are many other reasons I'm sure as well. Most chefs/GMs/owners I talked to at the time emphasized that they sincerely are not in this for the money, and yes, they like to make a living, but being able to build a community of food lovers who are passionate about their brand is what they really care about. I ended up pivoting to try to build a shift management app soon thereafter...didn't work out but a good entrepreneurship lesson!
[0]https://techcrunch.com/2014/07/03/everyone-seems-mad-at-rese...
Could only charging for peak times cause these downsides?
I agree for places like doctors visit though. Everyone should stand in queue rather than a limited reservation.
What if my work schedule isn't flexible? Having a queue and no option for an appointment time means that I'll essentially never be able to guarantee a doctor's visit. I'll just have to schedule time off and pray that the line isn't too long.
But I do agree with your point ;)
It would certainly help get people to consume less during major events and many assume it to be a necessity to make a fully renewable grid work. On the other hand, I struggle with the relentless need to complicate daily life (e.g. being prodded to have an app for everything that doesn't need one).
Time-of-use rates (peak vs off peak hours) have been around forever. Power users (huh, pun…) like ev owners do it, or new construction sometimes isn’t given an option, but that’s hardly foaming at the mouth.
I heard it tossed around in places like Texas, but most people realize it’s risky AF cause one high-demand day, eg from a polar vortex gone unusually far south, could easily wipe you right out.
Is it like a group of off-grid enthusiasts who can go a day or two off generators or batteries that make all this foam?
Residential users ussally don't have direct access to the wholesale market and will contract with a provider for a fixed rate plan or a variable rate plan where the rate only changes every month or so. (Their can be other plan structures like, peak vs off peak rates or 'free nights', etc)
Commercial/Large industrial users will buy on the wholesale market, some manufacturers will get a subsidized rate for having remote controlled breakers installed so the grid operator can shed lead when demand is high.
Texas definitely went too far with this model. It encourages the development of natural gas peaker plants that sit ideal all day and only spin up for a few hours when the price isn he highest. (There's also a whole corrupt saga with the natural gas monopoly in the state from the early 00's when the GOP finally got hegemonic control of the state)
I shouldn't have used "foaming at the mouth" as the connotation is pretty negative. I should have said extremely committed or something like that. These are all smart and good people trying to solve a major problem that's been ongoing for decades. The economist in me agrees with them, but part of me also has an aversion to the constant complexity creep in our lives as well as risk.
The reason why less-well-off folks are more likely to support a command economy is exactly because they are at the bottom of the demand curve, thus, receive almost no consumer surplus ever… it’s like they have dynamic pricing for almost every item they buy.
It big data is allowed to defeat the consumer surplus, don’t be surprised when the political winds quickly move toward price controls.
Taking this further, if big data can eradicate the consumer surplus, then maybe big data could make price controls more feasible. Maybe big data actually could make a command economy kinda work.
Yep, but ironically it would destroy even more of their surplus, so, at least for now, they're still benefiting.
But also, why shouldn't surplus be destroyed? You don't see people complaining when business surplus is destroyed, and it is because it benefits one party (ours) over the other (theirs), it's simply hypocrisy to think so. For a truly efficient market, surplus on either side should not exist.
No one who is excluded from affording a service due to dynamic pricing going higher than their budget is "benefiting".
I'm having trouble interpreting the boundaries between individuals and groups here in your comment, the language seems to freely and fluidly move between referring to one or the other.
> No one who is excluded from affording a service due to dynamic pricing going higher than their budget is "benefiting".
If everyone cannot afford a service, then that means there is limited supply. Any option other than increasing the simply simple favors one party over another for some reason. For example, if price is kept lower than the highest bidder, then it favors whoever was first (which is unfair too). Or you can do a lottery system, which is “fair”, but not necessarily desirable for a society of every limited service is distributed via lottery and hence removing all incentive for competition.
What is your angle, why are you so adamant to defend this behavior?
> than increasing the simply simple favors one party over another for some reason
This comment chain is about dynamic pricing, which does not necessarily involve third parties (assuming you mean scalpers).
> That happens anyway in a market
What happens anyway? Price discovery? Dynamic pricing allows for better price discovery, that is obvious. Whether it is done by sellers or resellers is irrelevant.
Obviously, different businesses have different mechanics, so the cost of that price discovery may not be worth the inconvenience. For example, a restaurant might want to eliminate scalpers so they can require IDs, but still increase their price with every 20% of capacity they sell.
You'll have to clarify your definition of "discovery". Your attempt to keep it vague is suspicious to say the least.
What dynamic pricing actually does is define and enforce pricing according to unilaterally controlled procedural structures. It is basically a capture of the pricing mechanism. Price discovery already happens in the market as the result of people buying and selling things, this is what's already obvious and is understood from Finance 101 by literally everyone.
Traditionally, how price discovery occurs in goods and services (excepting speculation) is 1) market research and 2) adjusting offered prices in cases of massive recognized disparity between supply and demand to maximize the revenue. As an example of 2, if a restaurant wants to start charging for reservations they first set a price, eg $20, and if they book solid they raise the price after a couple weeks or if they can't get any revenue from this they lower the price. That's the extent of "dynamics" that are necessary here.
You don't need to create some additional service that adjusts these things on the fly, first there is no value for the manager who's already watching and synthesizing this activity as part of their understanding of the operations, and also, it costs more for everyone involved compared to the baseline in order to, what, create one job in the economy?
A seller cannot “enforce” any price, buyers have to choose to buy at a price. That is the price discovery.
Price discovery already happens in the market as the result of people buying and selling things, this is what's already obvious and is understood from Finance 101 by literally everyone.
Correct.
> You don't need to create some additional service that adjusts these things on the fly, first there is no value for the manager who's already watching and synthesizing this activity as part of their understanding of the operations, and also, it costs more for everyone involved compared to the baseline in order to, what, create one job in the economy?
With computers, this is not even a job. Lots of businesses like airlines and hotels already use programs that use data from previous years’ trends as well as searches and accrued reservations statistics to forecast demand and constantly update the price.
As I wrote in my previous comment, a simple program can raise prices as supply decreases, a slightly more advanced one can keep track of the pace of reservations and reduce prices if the pace drops, or if it gets too close to the expiration date for an expiring good.
In the case of a single restaurant like here, I don't see a huge issue though.
Capitalism is a tool, not a law of nature. Perhaps we quite simply do not want to eliminate all surplus, because we like the result of a system with surplus.
You need only look at the difference between catering/decor for a wedding and catering/decor for any other event to see how much wealth extraction... how much poorer we would all be, if we lose the consumer surplus.
That is almost always the case anyway. Things are priced at the point that one would pay. To lament that on behalf of the consumer and not of the business is hypocritical, or more concretely, self-interested, as of course we all are.
> how much poorer we would all be, if we lose the consumer surplus.
To summarize my point, imagine how richer we would all be if we didn't have to pay anything at all. Unfortunately, that is a false world; production depends on consumers paying what they can and businesses charging what they must.
No, things are priced at the point that the market, as a whole, is willing to pay. If you're someone with an above-median income, you're usually paying less than you otherwise would.
Most purchases you make don't start with the merchant checking how much money you have in your savings account.
>That is almost always the case anyway. Things are priced at the point that one would pay.
No... not at all. When you need to fly home for a funeral of a close friend, suddenly plane tickets cost $10,000 for you and only you. Your neighbor could get the same flight for $200, but would not be allowed to transfer the ticket to you, because, well, them's the rules in a no-consumer-surplus world.
The vast, vast, vast majority of the time, most people are paying far less than the would pay for things if the companies they bought them from could use dynamic pricing. This is what the consumer surplus is, and is why markets generally worth for both consumer and seller.
No? How can the neighbor get a different deal than one you are looking for in the case of plane tickets? It's not like the airline knows that you are flying for a funeral. Even if they did, as you mention in a non-surplus world, well, yeah, that's how markets work, people have different needs and pay for that privilege. There are business and first class tickets for a reason, as well as prices being more expensive during holidays and summers. Of all of the examples, you chose one of the worst as flight prices are inherently dynamic.
This is literally how dynamic pricing works, and it happens all the time.
>It's not like the airline knows that you are flying for a funeral.
Yes, they could. A company armed with the biggest of big data could scrape that information fairly trivially. This is my entire point. The more companies know about us, they more they can use dynamic pricing to extract the highest price we'd probably be willing to pay... personally.
>There are business and first class tickets for a reason, as well as prices being more expensive during holidays and summers.
These are different products. Dynamic pricing is different pricing for the exact same product depending on the who the customer is... typically their demographics data.
since when were there not different prices for tickets based on seating? if a concert is only one or two nights, then the nose bleed seats could be the same as eating at the restaurant on a Tuesday night, while the front row seats would be eating on Friday nights.
Ticketmaster as well is offering “Platinum” tickets which are just more expensive tickets with no better views or perks.
I don't think most people mind when a restaurant sells the moral equivalent of tickets to dining slots ahead of time. I've visited restaurants that do that, and had no problem with it.
The issue is that you were taking something that was free (open reservation slots), and then forcing people to pay for them if they wanted to dine there... when they could have just made a reservation -- perhaps farther in advance -- for free.
I agree that most people in the restaurant business aren't in it for the money (if they are, they've picked the wrong industry). But scalping reservations to their restaurants is making things worse, not better.
"market maker" ?
That's pretty strong. I won't name all the people doing much worse, but lots of people do jobs that are only about profit, such as much of the finance industry, tech industry, etc. If she was a developer for Google's ad system, would you do the same?
So first come first serve is an okay way of allocating resources, but charging a higher price is not?
But all of this is sideways to when and whether scalping is moral or, at least, preferable in society. Not all actions which increase allocative efficiency are things we actually want in society.
Otherwise, kidnapping and ransoming children back to their parents would be a boon industry.
And your last two paragraphs are nonsensical, you are comparing the right to eat at a top end restaurant with the right to not have your kids kidnapped it’s downright laughable that you’d see such a moral equivalence.
> This is by definition increasing economic efficiency
Bespoke markets are by definition economically inefficient. There's a reason most people buy mass-manufactured cars, and it's not just the cost, it's that bespoke car production cannot make enough cars to meet demand.
At absolute best a bespoke market may sell a few more of a limited set of dining opportunities to others through the additional marketing medium. At better what bespoke markets do is maximize profit taking. At bad this maximization of profit taking channels money to the middleman that otherwise would have gone to the merchant (as there will be people who pay for a reservation and then order the cheapest meal at the restaurant, as they can't afford more). And at worst this makes it inconvenient for people to frequent the restaurant, resulting in an overall reduction of customers. The bad and worst circumstances can result in fewer operating restaurants. And artificial resource scarcity is the opposite of economically efficient.
The restaurant cares about increasing people's utility, not about only serving a the wealthiest fraction of people who can afford their food (those with the highest ability to pay).
Edit: The reservations also weren't free. For several restaurants I've had to figure out at what time new reservation open up, set an alarm and then still sometimes not get a seat because it's already booked out. When I traveled to Spain we had one place we called late at night our time to get a reservation. None of that is free. I'd happily paid extra to avoid this trouble and beer certain that I can go to the restaurants for which I'm traveling to another continent.
I used to do consulting for a extremely high-end hotel where a single night could easily cost $3k+. Every employee got to spend a night for free every year and they got a number of friends and family discounts that were 90% off.
Restaurant reservations are fundamentally different compared to, say, Taylor Swift concert tickets. Loyalty to an artist is multi-channel (concert tickets, merchandise, CD, streaming) and thus difficult to track and reward. Restaurant reservations occur at a single point of sale. It is much simpler, conceptually, to first offer up Friday 7pm reservations to people who have dined with you in the past, at a lower price, then open them up for a higher price to the general public if they haven't sold within a reasonable time frame.
If you facilitated the restaurants adjusting prices for prime bookings, then maybe it would have come across differently.
Also nearly 10 years later, the world is a much worse place. I wouldn't be surprised if blatant booking scalping didn't really raise any eyebrows.
At least for ultra-fine dining like El Buli, Noma or Central 1) should be irrelevant. I've had this argument with restaurateurs before and it seems that they are a lot more concerned about some magical "fair" prices than much of the customer base. I've looked several times into traveling to Copenhagen to eat at Noma. At that point, who gives a shit if the meal is $300 or $1,000?! It all pales compared to the travel cost. If people aren't willing to pay it, the auction won't go that high. Easy peasy!
And then I keep hearing that fine dining isn't sustainable. Just charge more!
Essentially, they’ll bill you 50€ per person and you’ll get it back (aka the authorization is cancelled) when you show up, but the transaction is executed when you don’t.
A few years back there were many empty tables during prime time because of the reservations, and now there’s barely any table unused.
It seems to work and I’m absolutely happy to reassure the restaurant with money that I’ll be there.
Maybe make a FakeryBakery pay kids a commission to collect grocery story Kids Club Cookies and resell them.as half-price boxes.
Far worse ideas sprout everyday and many get positive attention as well. Judge the process along with the idea.
With the context in this thread I would implement it as dynamic cancellation fees. You pay to reserve, but 100% reedeemable on bills. If you cancel, you lose a clearly notified percentage based on how popular the time slot is. Might work while still staying true to the idea of fairness.
If the spot itself is actually worth $200 then the restaurant was forgoing that per seat and suddenly made $5000+ per day. No restaurant is going to pass up $1.8M of “free” revenue.
Either the seats are worth the price or they’re not.
Restaurants should of course disclose -- very clearly -- at reservation time that the deposit and slot are not transferable, and that IDs will be checked at the door. If you choose to make that reservation, knowing that, and then show up without an ID, that's on you.
> ... but didn’t notice I would have to bring my ID
That would fall under the category of "that's on you".
Regardless, I would hope that a restaurant would try to find another way to verify you are who you say you are, like perhaps asking for the credit/debit card you used to make the reservation, or even just asking to see something on your person that looks vaguely difficult to forge and has your name on it. We're not talking about a high-security situation here.
I’m not from the US, and I don’t live there. I was talking about the world at large, not about the US.
Also are there other options for ID? Eg in UK, Australia, NZ you can get identity cards that prove your age. Australian one costs $77 AUD.
No. In my country there is a requirement to have a certain amount of training with a professional driving instructor. For most people here the cost of that will amount to about $3000 USD. And it takes a lot of time too.
Just because I don’t have $3000 USD to shell out for that currently, nor the time for those lessons and self-study, does not mean I cannot afford to go to a restaurant.
> are there other options for ID?
Yes there are other options, but I have no use for a National ID card really when I already have a passport. Having to show ID only happens in two cases for me most of the time:
- border control when I am traveling, in which case my passport is required anyways in many countries
- retrieving packages that were too big to be delivered in my mail box. And even then most times I don’t have to show ID
It also used to be the case that I had to show ID when buying alcohol and tobacco. But being 32 years old now I usually don’t get asked for ID in the store in my country anymore.
Sounds like what the parent said, "that's on you" to fix that, then. In the aggregate, your (as well as those similar to you's) business is simply irrelevant to the vast majority of businesses that need to check IDs. Just because you don't want to get such a driver's license does not mean that a restaurant must honor your choice.
The US issues passport cards you can stick in your wallet, as well as the books. I carry mine because my state ID isn't "REAL ID" compliant, which is amazingly a thing that starts to matter before my ID expires.
Trouble is, I keep forgetting to change it back so now we never know what name a reservation will be under.
Just commit and don’t change plans.
Tell everything else this time is already booked and paid for.
"When guests drop $100 or more just to walk in the door, “people have [the] wrong expectation when they come” he says because those expectations might be unreasonably high."
Some do charge something like $50 for the reservation. And if you can't come because there is a major blizzard in the city, tough luck ...
Tablz from Toronto does dynamic pricing.
On the other hand if it gets more granular... there may be no winning. Budget-conscious will feel they're being priced-out, and the fancy-rich will not go to a restaurant that nickle-and-dimes / seems desperate for every last cent.
I have to check every Tuesday at midnight for the 5 minutes that the next weeks tables open up before they are booked. Then I have to put down a credit card. Next I get bombarded with push notifications and texts with increasing urgency leading up to dinner that I must show up on time or forfeit money. When I show up on time they don’t seat me but suggest I go wait at bar and buy drinks. Finally they seat me and remind me I only have the table 90 minutes.
You know what, just charge me for seats. Let’s just go completely nakedly economic because you’re already 90% there with extra steps in the way.
It is called the hospitality industry but you’d never know it given what the dining experience has turned into.
As someone that lives in Mexico City where dinners (and lunches!) easily last 3, 4 or even 5 hours this sounds horrifically demeaning.
It isn’t a new idea. Free outside hours, booking fee with credit during prime time.
Restaurants could pick how much they charged for reservations, whether that cost could be applied to a portion of the bill, or whether it was a straight up auction for spots.
They thought there would be pushback from customers, but the customer feedback was excellent.
The friction mostly came from the restaurants. They either had antiquated reservation systems (many on pen and paper) and didn't like the idea of letting software control their table planning (since free reservations could be cancelled on the spot on the whim by the serving staff but cancelling a paid slot really irked everyone). Or poor accounting practices that made it really hard for them to accept that a customer already prepaid $500 for a meal in another system that'll all be bundled in a big check later. Or that they couldn't be sketchy about customer tips if it's being tracked.
It was also difficult to scale the business quickly because every restaurant had to be trained and onboarded individually, and every restaurant had an unicorn of an operation that the software had to be able to handle.
That way they create a situation where you SEE how popular a place is. A line is much easier to see than a date dropdown that is booked out for 2 months.
It's also easier to keep the restaurant full. A full reservation where not everybody shows up might cause empty tables.
A long line fixes that.
What does democracy have to do with allocating a scarce resource?
Allocating a scare resource so that some people can use it multiple times while others can never use it isn't exactly democratic.
>Why should a rich person be able to experience luxury more often than a poor person?
Because that is the benefit of being rich. Perhaps this question is better phrased as “Why should there be a wealth/income gap greater than <$x>?”
Every society has some measure for who deserves more and who deserves less. The Nazis determined it by ethnicity. Other societies determined it by whether you were born into noble families. Our society today determines it by wealth, which in the end is just a proxy for ancestry and luck.
A truly fair system would allocate resources only based on factors entirely under your own control. It's not fair if you're punished for being born into the wrong family.
It follows that using wealth as a measure is definitely a bad choice.
I’m also still not clear why money is a bad tool for acquiring luxury resources. We’re not talking about necessary food and shelter, we’re talking about a high end restaurant.
Is there something wrong with saving money for things I want? Why should I have to enter a lottery for everything? Maybe I end up with a trip to Disney World, which I don’t want, instead of a nice date night with my wife, which I do want. Is there some reason you think that’s a more desirable situation or more fair?
It feels like a weird way to try to be equitable for things that will never, ever be equitable, and a strange, unsupportable justification for it.
Wealth amassed through working and saving your wage is a just and fair system in my opinion. It's still biased as not all wages are fairly negotiated, but it's the most fair solution today.
My vision for the world is a socially democratic one — everyone is guaranteed a basic level of survival, similar in terms of housing, medical care and food access to what you'd get from a university dorm and cafeteria.
Beyond that, people can gain wealth from their own work and save it up. If you'd rather eat at a cheap restaurant every week, or a michelin star restaurant every few years, should be up to you.
But your wealth and your access to resources should come from your own work and not the luck of being born into the right family, the right ethnicity, the right country, or the right caste.
It's not a choice. Would you rather it be wealth or violence? As civilizations mature, the power that happens to be encapsulated in a tribal (read gang) leader's threat of physical violence and banishment transmogrifies into debt obligations once a strong civil law foundation is in place.
>By what measure do you or I deserve more than poor people? Who decides who deserves what? Let me know and we'll start lobbying next Monday ;)
“Don't you understand that it's a question of power, and money means power. It's as simple as that.”
- John Deuss
Why would you work harder to get rich if you don't get anything for it?
this comment wouldn't be nonsense if we lived in a political economy where money came exclusively from working hard / hazardous / difficult jobs, but in case you forgot, plenty of rich people have never worked a day in their lives and either lucked into an inheritance or sit on their ass and cash rent / dividend checks
Imagine a scenario where you could banish your children to a hellish, poverty-stricken existence -- but their peers would be even worse off than that. Alternatively, you could give your children a happy, comfortable life, but all of their peers would be equal to them.
Are you seriously suggesting that you would choose the first option, not the second one?
Obviously I want my own children to live the best possible life I can give them, but I want their peers to do well, too. It is crazy to me to care only about your children's status in their community, rather than their absolute wellbeing and the wellbeing of the community they are a part of.
Why does a rich person only has access to any asset you are selling. Could I get it for free?
"None of this is communist, but that is the nature of luxury".
This is about Jazz Alley, in Seattle WA.
https://www.seattletimes.com/entertainment/music/how-seattle...
The solution to this problem is to handle restaurant reservations like airline reservations. They check your ID before you can board the plane. No reason that restaurants can't do the same. People would be mad, of course, but that's the only way you can prevent a secondary market from setting the price. (They should do this for concert tickets and things like that as well. Artists intentionally sell tickets below market price so that their fans don't get mad at them, but economics simply doesn't all this to exist; someone will always step in to take the profit that you left on the table. By requiring ID, you can prevent the market from stepping in, because the pool of buyers goes down; only people that can get a government ID with your name on it can buy your ticket on the secondary market. John Smith is probably out of luck, but everyone else is fin.)
Overall, I don't think the restaurants have a particularly strong incentive to solve this problem. At the end of the day, they are made or broken based on filling up their tables. They do fill all their tables with the current system. So the next remaining hurdle is increasing "fairness". There isn't a way to do this without annoying someone. If they check IDs, someone will be mad that they had their ID checked. If they charge an entrance fee (i.e. a cost for the reservation that isn't applied to your meal), then someone is going to be mad. (The staff will also probably be mad; if you pay $100 for your seat, that's $100 less to tip with.) At the end of the day, I think charging market price on everything is the most fair. If people will pay $100 just to get in the door, they should take the $100. I would definitely pay it for special occasions; you can do it 6 times a year and still pay less than the annual fee on your Amex Plat card!
Meanwhile, anyone that cares about this can still delegate it to a human. Call the Amex concierge, "can you get me into FooBar at around 7PM any night next week" and they take care of it. The phone adds no fairness; it opens up a way for middlemen to offer a service that you pay for but that the restaurant never sees.
While maybe a rare situation, software to handle reservations is a great idea. You instantly save one employee's worth of work for a tiny amount of money.
The other option is to only take walk-ins, but then you risk having empty tables when people are tired of waiting in line. I am sure many places have tried walk-in only, only to be disappointed about not making enough money. Restaurants like reservations.
As a customer, I see exactly what all my options are, immediately, and can easily switch days to see what else is available. Needing to manually tell a human what I'm looking for (which I might not even know yet, without seeing all the options), and have them read something off a screen or book to me, is a waste of time.
And for the restaurants, they don't have to pay someone to answer the reservations phone number when they're not open. And they don't have to distract staff from their hospitality duties when the restaurant is open. Also I'm sure all of us have called a restaurant while they're busy, and have had to repeat what we've said to busy, overworked restaurant staff member who can barely hear us on the phone over the din of the restaurant behind them.
This is the identical to early perspective on the secondary market in event ticketing: a sale is a sale, our work is done.
That means the restaurant is undercharging.
Then you realize how much money you are losing to arbitrage and the work begins.
A couple of decades later, you have variable pricing, dynamic pricing, distribution to expedia, official secondary market partnerships, conferences, niche-y saas products, competing enterprise products, revenue managers, specialized masters' degrees, papers at INFORMs, revenue directors, VPs of sales and revenue,
and a bunch of people who just want to cook and eat
- distribution to ~expedia~ booking (opentable)
- conferences
- niche-y saas products (resy, tock, opentable, etc)
- VPs of sales and revenue (at big restaurant groups)
For restaurants, the complexity they're adding is fairness. They don't want to only cook for rich people, they want to cook for everyone. But their food is so good that if you sorted the net worth of every customer every night descending and invited customers in in that order, there would never be a person in the restaurant with less than 100 million dollars. So, to ensure that net worth isn't a factor on who gets admitted, they have to add operational complexity, basically distributing tickets by random lottery and ensuring that people can't sell those tickets.
The current system is basically a competitive auction with extra steps. The competitive auction ensures that only the people with the most money can eat at your restaurant. If you are a restaurant and you don't like that, then there is no choice but to move to a different system. If you're fine with it, keep doing what you're doing. Many restaurants already do that and they are full every single night.
Ask them to check out with the same credit card at the end of their meal.
Blacklist any card used for a reservation consistently not matched. Cancel all their RSVPs.
We don't care about the odd reservation where someone books and someone else pays - that's rare and individual people don't book that many reservations. Worst case they call support and you set a note to not apply the rule to them.
This means scalpers now need to rotate cards. That sucks and is going to hit other limitations.
Even if the scammer rotates a new virtual number each time, the high number of cancelations on them is enough to trigger inspection and a personal ban (since they still need their name/address on all the virtual numbers).
Since restaurant patrons aren't avoiding restaurants due to terrorism concerns, there would be no need for a security check. Revenue management is, however, broken. (You can't eat at your neighborhood restaurant anymore because tourists are buying all the seats from a bot.) So that's why the ID check is necessary.
I'm not saying that restaurants should do this, I'm just proposing a system that would actually work. Most likely, nobody really wants to solve this problem; huge banks like Amex can extract an extra $700 a year from people that care.
Remember, the goal of this process is to add artificial fairness. The people with the most money are the ones least likely to like this system; they LOSE benefits under this system, as the current system meets all of their needs. They can eat anywhere they want, whenever they want. That is why they would get angry and storm out. Some would argue the whole idea is to make them angry and storm out, so that people that live in the neighborhood can eat there once in a while. Or, so that the restaurant can take the revenue that scalpers currently take.
Nobody is going to go through all the effort of getting a reservation, traveling to a restaurant, getting to the front desk, and then storm out and ruin their entire dinner plans on principle just because they were asked for ID.
> I wouldn't be surprised if most don't even carry it around with them.
I highly doubt that people are bringing their credit card but not their driver's license when going to a restaurant. Why you think anyone would arrive with a means of payment but not a 10 gram ID card is beyond me.
The solution to the above shitshow is the same as the solution to these scalpers. The telephone. Few places will collect your credit card information over the phone for a reservation. And places dealing with scalpers can take names and inform guests that they will need to present ID on arrival. Not an entirely frictionless solution, but I think most people won't mind showing their ID if they are given advanced notice.
Like a thing you talk into? Why would anyone in 2023 use one?
Just require the same payment card is used for the food as to make the booking.
In my head, this completely decapitates scalping as a business. Why can't this also be applied in other sectors (i.e. restaurant reservations)
In places/contexts that do have functioning identity ecosystems, that does indeed solve the issue, yes. For example,this is why airline ticket scalpers are not a thing in the US: TSA will validate every passenger's ID matching their boarding pass before being allowed into the airport.
Even if government ID is out of the question, asking for a credit card with the same name should also work as an alternative for those without a drivers' license or any other form of ID. I don't have any numbers of course, but I suspect there's not a lot of overlap between the groups of people who don't have credit cards or ID and the people who go to these expensive restaurants.
Many other countries (and private airlines) will match your ID with your boarding pass; however, airlines often allow you to change the details on the boarding pass up to the very end, sometimes for a small fee. When the scalpers' customers go through security, their boarding passes match their government ID. If airlines wouldn't allow you to change the name on your ticket the day before your flight, scalpers would probably lose a lot of business, at the cost of minor inconvenience to customers.
So, to answer your question, companies could solve this problem by binding a reservation to an ID. However, there's very little incentive to do that. There's also a slight downside when people show up and say "Oh, forgot my ID". Now you have a fight at the entrance you don't want to deal with.
The scalper also has to front the money and eat the cost of unsold reservations.
Not really. Restaurant charges 50 dollars for reservation, which gets added as credit at bill. Scalper pays the 50 dollars and charges customer 60 dollars for the reservation. Customer gets the 50 dollars from the restaurant. Scalper keeps the 10 dollars of profit. No rebate is needed for the scalper, they already took the customer money with the deposit included.
Now, for unsold reservations, yes, it helps by adding some risk to the scalper.
They will. Either by bouncing the reservation page and/or by giving a nasty review.
Or just go back to telephone reservations. If you hear the same voice calling over and over, you tell them there aren't any more reservations available. Imperfect, yes, but cheap.
Once someone shows up for a reservation, it's too late to really do anything about it. No restaurant is going to turn away money like that. Popular enough spots may have a line at the door, but you also don't want to risk a commotion turning away hungry people with money and some evidence of a reservation.
Plus, fine dining places like some of these are as much about the atmosphere and service as the meal. Being treated with such suspicion would put a bad taste in my mouth before my first bite of food...
But in general, the restaurants which are most affected by this scheme are the ones who are likely in the best position to do something about it. They may lose some customers who bought fraudulent reservations, which seems like not much of a loss. They may also lose some people who get mad about being questioned. But, in the long run, I think they'd win more fans among people who couldn't go to the restaurant at all when all the reservations were scooped up by bots.
Why wouldn't bots buy up every table in every restaurant everywhere no matter how busy they normally are? It costs basically nothing. That way you'll be forced to pay money to some app just to get a table anywhere. Restaurants that don't want to be exploited this way will have to either stop accepting reservations or spend a bunch of time and money fighting bots.
And then you’ll get AI bots making calls anyway (Google already does this)
Maybe restaurants should go back to requiring reservations over the phone or in person. Or require an ID to match the name on the reservation.
I find it much more fun to meet friends at a restaurant without a reservation. Less obligation to follow through. If one of us has a last minute idea to do something else, we go with the flow. If none of the available tables are to our liking, we go with the flow and go elsewhere. If there is no available table, we go with the flow and go elsewhere. So much more serendipity and freedom.
One time, we arrived at a restaurant and were told that there is no available table. Since I just read in a book that you usually can bribe the waiter, I jumped over my shadow, said "Maybe we can wait a few minutes and see if something becomes available?" and put a €20 note into the hand of the waiter. Pointed at the best table at the window and said "That one would be perfect of course". 5 minutes later, we were sitting at the table at the window. I was a nerve wreck and felt like a king :)
I would say you are missing out on very good experiences by doing noncommittal things with noncommittal friends
On the other hand, I feel like others are missing out on those moments where one of my friends calls and says "Hey I'm in this and that part of the city and I'm hungry. What do you do?". And I'm like "I'm sitting in a cafe in that other part, drinking coffee, tinkering on my laptop. How about we meet in 30 minutes in this and that restaurant?". And they are like "Deal. I also have my laptop with me. Have you seen the new OpenAI API? I just cobbled something together with it that I would like to show you.".
Most people seem too entangled in job and family for this.
this has nothing to do with the crowd that is entangled in job and family?
I think visiting restaurants to meet with interesting people is one of the great joys in life. And when interesting people meet, there almost always comes up something to try out or look up online.
It feels we are so near to the singularity, that every moment is like a wild ride.
I meet people in restaurants a couple of days per week. Only once did a waiter complain about the laptop on the table. I just never went to that restaurant again.
One waiter complained. Many, many more complained about you without bringing it up, and you likely disturbed others who were eating as well.
Find meaning outside a laptop. It exists.
When the first startup I founded took off, I tried some of the more expensive restaurants in my town. I kinda liked the experience. But after a short while, it tapered off and I do not get any more out of it than from visiting a €10/meal restaurant now. So I almost never go to fancy restaurants these days. There is nothing that draws me there.
Really curious to hear what those restaurants give you that a cheap restaurant does not.
I've eaten at a few 3-star Michelin restaurants and the experience at each was worth living imho. 3-star means not only is the food world class, but the service is as well. I still remember fondly each thing I ate, and just as importantly, the interactions I had with the chefs throughout the evening.
It happens to be the case the excellent food and service does come at a price, so Michelin 3-star places tend to be expensive. Likewise people tend to dress up when they spend a lot so they tend to be "fancy", but those are things that happen as an artifact of the quality of experience they provide.
I've been to plenty of places that are expensive and very "meh", and I absolutely loathe "fancy" restaurants that pretend they are offering you some privileged experience (which is usually a laughable facsimile of the experience of real high-end dining).
I'll add that there are also diminishing returns: The experience of sitting at the counter of at Masa, with only two other couples why your personal chef hands you some of the best sushi in the world is incredible, but there are other omakase places in NYC that offer a nearly equally amazing experience (especially if you go on a quiet Tuesday night) for 1/3 the price, but I'm very glad I had that counter experience at Masa.
I’ve eaten across the stars and had the same misconception when we ate at 2-Star Tim Raue Wild in Berlin and were surprised at the poor service.
It almost feels like the servers have ESP. They get you a new napkin, or fork before you even raise your finger (but not after you thought about asking). The food is timed perfectly. Once everyone finishes the course, the next course comes. If there's a conversation about the previous course, the next one miraculously waits until that conversation dies down.
The food is ordered in a way to activate taste buds. It's not just from "lighter fare" to "heavier fare." Salty/sweet, temperature play, texture play; it's all on the table and masterfully executed. There's introspective dishes served in one course, and fun dishes (like candied balloons) in the next.
The food itself is nutrient-complete, so while the portions are ostensibly small, you leave satisfied, and each course builds the hype. There's never a dish that ends up making the last feel "smaller."
You can sit for as long as you want, then when the group decides it's time to leave, the restaurant already has your jackets ready, the car is ready, and everything is in it's right spot. There's no mix ups.
The crispness of the experience made me realize food can be more than just a meal, but ultimately it's hard to define without trying it.
... the food is objectively better?
... the ambiance is objectively superior?
... the staff is objectively superior?
No-one wants to eat a 14 course tasting menu every night, but I don't buy the idea that a $10 restaurant is going to be a comparable experience.
I have absolutely had the experience of an inexpensive local seafood restaurant on Long Island making much better food than an upscale place in Manhattan, for example.
Especially with things like seafood and steak. Honestly, I can make a better steak than any restaurant at home. I can shuck oysters and have fun. And as you said, with seafood in particular, little places in good locations often have better food!
But the experience of the fancy restaurant has it's value as well.
In upscale places that are bad go out of business, unless their primary means of gathering business isn't food, but instead is location/proximity to a source of near captive audiences.
Sure, McDonalds has sold like, a trillion hamburgers and a local started restaurant does like 100 covers a night. That doesn’t mean that they aren’t packed and that the reservations don’t go instantly, as soon as they’re available.
99% of people might not think think the difference is worth it; but I just don't accept the idea that 99% of people wouldn't think that the service and ambiance at Per Se is better than Olive Garden.
Michelin stars mean that a restaurant has been vetted by presumed skilled experts.
This means that you're going to have on average a better experience, but that you'll pay more for the experience you get (since they're in more demand). Finding a restaurant of similar quality without the stars will take more digging, but will likely give you better value.
I'm not big into the show of it all, and I really enjoy cooking myself, but I can't even come close to the quality on a single dish they produced, much less the 5 - 10 small dishes you are typically presented. If you love food like I do, you'll generally love the food experience on presentation and taste alone. The head chefs are typically artists when it comes to this stuff, they spend a lot of time and effort coming up with both unique and enjoyable dishes. It is not catered in any way to mass production and speed of service like you see in the typical restaurant.
This said, if you don't enjoy food, or you don't enjoy special experiences you're not going to get much out of it.
https://www.fearlesscaptivations.com/pasta-bar-austin/ is an example of someones experience of the last place like this I ate at.
Yeah, I don't really like needing a reservation or appointment for everything; for specific events like birthdays or graduations it's probably good to make one, though.
There are a few restaurants in my city that don't take reservations at all. I've given up on going to them because the wait for a table is always at least an hour long, and you can't plan any other activities around it.
You're also discounting the many fine places, particularly downtown, that explicitly don't take reservations.
Personally, like the vast majority of us, I think anyone who calls in ahead to a restaurant is totally lame and most likely an NPC, but it does depend on where you are and the current culture around you
Most of the time I am meeting friends to hang-out and we will spontaneously find somewhere to eat. I really enjoy that.
Occasionally I am hanging out with friends from out-of-town, or friends with kids who don't get out as often. Then it's convenient to have somewhere booked so we don't end up having to eat at a not-so-great place and 'spoil' their visit, or their one evening seeing friends that month.
Sometimes I want to hang out with a big group. Try finding a place which can spontaneously accommodate twelve people.
Some people have the time and money to plan ahead, some don’t. It’s really all very random
Calling somebody an NPC is dehumanizing. You don't have to agree eith their values, but please don't disrespect their autonomy.
* Real names on restaurant, just verify their ID. Then ban them from opentable/resy (might be harsh, but will disincentivize behavior)
* No transferring reservations, if rez is cancelled, hold the rez and release at a random time later
I know for ticketmaster, they have no incentive to put these guards up because they take a % cut for every resale, but for these apps; I think you can put some reasonable defenses, especially since most of the restaurants that face these issues have bills of a few hundred dollars anyway.
Bulk-generating accounts -- email addresses, phone numbers and even credit card numbers -- is a solved problem for resellers.
In New York State, it is illegal to restrict transfer of tickets. Expect the same for reservations as this battle advances.
It sucks being able to not resell a ticket when plans change, but I'd assume that these days, the convenience of being able to do that is more than offset by the amount lost to scalpers.
(This is not my personal perspective.)
I hope Resy figures this out, and I hope we're able to learn from (or license) their solution.
I expect their approach will look similar to our path: fight the secondary market with every legal tool, work with them when you can't, improve pricing algorithms to reduce arbitrage opportunity.
Customers on both sides of their market will probably be frustrated with each effort. They want to cook and eat, not "be in a marketplace". They will probably blame Resy.
The secondary market will probably engage legislative resources, attempting to tailor the law to protect their practices. They will probably do this "in the interest of diners". It will probably become illegal to restrict transfer of reservations, among other things.
Good luck y'all. Reach out if you need support. Love, Broadway
But then again, e.g. in New York, it's apparently also illegal to resell a ticket for more than 10% above its face value, yet ticket scalping does not seem to be a solved problem...
There is no longer a limit on the amount you can resell a ticket for in NYS.
see NYS ACA 11-C, Title G, 25.30(c): https://www.nysenate.gov/legislation/laws/ACA/25.30
That said, your plan is one ticket per identified person, that you can't buy 4 tickets at a time for you and your friends? Not sure that'll fly, even with people who hate Ticketmaster.
The thought was that if you lived in the neighborhood, you would walk down to the restaurant around 4pm, make your reservation, go home and then come back for dinner.
In practice, this meant that if you wanted a spontaneous "let's go eat there" type of evening and you didn't live in the neighborhood, you wouldn't be eating dinner till after midnight.
+ Accept reservations by phone or in person only and ask for the patron's phone number. Then call back 1 hour before to confirm the reservation.
+ Make the most popular times non-bookable. You have to come in person and check how many guests are in a queue and how long you should wait for the table. Some people are okay to wait at the bar, others will head to less busy places.
+++ Open a spin-off of a popular place, and redirect the clients' stream there.
In any case, writing such a bot for a one time use-case (and just one reservation of which I was a part of) was fun!
My hunch is that turning restaurant reservations into a speculative bidding market will not make it better for restaurants on average, but will just extract value while making the business more volatile, and also less pleasant for the average customer.
I tried to google the title in firefox focus as I sometimes do to get around the paywall and found a weird youtube video of someone sleepily reading the article:
https://m.youtube.com/watch?v=w0wF_nne164
Lots of syndication in the serp also.