Comment by jrockway | Hacker News Reader

Comment by jrockway | Hacker News Reader

So, there are a lot of comments saying that reservations should charge an up-front fee and apply that to the food, but I don't think that will work. First off, plenty of restaurants in New York do that and the problem persists. The underlying problem is that with scalpers buying reservations, they are proving that the market will bear a higher price. People that buy scalped reservations are paying the scalper a fee which WILL NOT be applied to their bill. That means the restaurant is undercharging.

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!

Overall, I don't think the restaurants have a particularly strong incentive to solve this problem.

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

Well we already have:

- distribution to ~expedia~ booking (opentable)

- conferences

- niche-y saas products (resy, tock, opentable, etc)

- VPs of sales and revenue (at big restaurant groups)

The complexity is added to achieve a complex goal. In the case of airlines, it's so that you can walk up to the ticket counter 45 minutes before a flight, slap down a wad of cash, and get on that flight... while still ensuring that every plane goes out completely full even when that rare event doesn't happen.

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.

Less effort needed than that - charge $1 for a reservation. Just enough to be a valid purchase.

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.

My bank generates virtual numbers for free

That's why canceling the RSVPs is important. You just screwed over the scammer and their current "orders".

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).

This might technically work, but everyone would hate it. And that’s why it won’t happen, because people would hate it so much that it would have to be enacted en masse, and there’s no way to coordinate that.

Seems to me the real fix is to take reservations over the phone, not rely on apps and intermediaries to handle stuff that can easily be handled by humans, and move on.

I'm not sure that makes sense. You now have to pay someone to maintain a reservations book and be available at any time to receive the phone call. Meanwhile, the reservation companies can just have ChatGPT make the phone call for you; do you think that restaurant employees can administer a Turing test or that ordinary customers could pass a Turing test?

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.

Online reservations are so much better than phone reservations, both for the restaurant and customer.

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.

Checking ID on entry lol, Maybe they can pat us down and shout at us like an airport too then. Many restaurants services levels are already heading that way.

The ID check is revenue management, the magnetometers are to make you feel safe against terrorism. They happen at the same place in the airport, but they are totally different things instituted for totally different reasons.

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.

The clientele at a high end restaurant is very different from teenagers standing in line outside a concert or bar. I have experience in this area and I can tell you that the majority of patrons would laugh in your face or get angry and storm off if asked for ID at the door of a restaurant. I wouldn't be surprised if most don't even carry it around with them.

These clients never fly commercial? I am not inventing a new system here; I'm stealing revenue management from the airlines. Same exact problem; you lose money if all your seats aren't filled, and you can charge some people more money than others. Airlines are the masters of this, and the reason the system works is because they deleted the secondary market.

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.

> I have experience in this area and I can tell you that the majority of patrons would laugh in your face or get angry and storm off if asked for ID at the door of a restaurant.

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.

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