iPads and restaurants: How waiters will be replaced by tablet computers.

Commentary about business and finance.
April 30 2011 7:09 AM

This Waiter Doesn't Need a Tip

How restaurants will use tablet computers to replace servers.

Illustration by Rob Donnelly. Click image to expand.

A few years ago, I ate dinner with my parents and siblings at an oak-paneled, oh-so-snooty restaurant. We had finished dessert. The coffee was cold. We wanted to leave. We could not. The waiter, until that point obsequious, had never appeared with the bill. Twenty minutes passed, and Mr. Lowrey, a dad of the pragmatic, stern-but-fair variety, finally got fed up. He whipped out his BlackBerry and called the restaurant. A minute later, we had the check.

A Palo Alto, Calif.-based startup called E La Carte is hoping to ensure that no family has to endure such a nightmare again. It has produced a kind of souped-up iPad that lets you order and pay right at your table. The brainchild of a bunch of MIT engineers, the nifty invention, known as the Presto, might be found at a restaurant near you soon.

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It works like this. The company manufactures tablet computers with full-day battery lives and a credit-card reader attached. The interface is easy enough for a grade-schooler to use. You select what you want to eat and add items to a cart. Depending on the restaurant's preferences, the console could show you nutritional information, ingredients lists, and photographs. You can make special requests, like "dressing on the side" or "quintuple bacon." When you're done, the order zings over to the kitchen, and the Presto tells you how long it will take for your items to come out. Want a margarita in the meantime? Just add it on the console, and wait for the waiter to bring it. Bored with your companions? Play games on the machine. When you're through with your meal, you pay on the console, splitting the bill item by item if you wish and paying however you want. And you can have your receipt emailed to you.

The company is currently rolling the product out after two years of development, testing, fundraising, and manufacturing. So far, about 20 restaurants have signed up and many more nationally have expressed interest. "They're anything above McDonald's and below a fancy, white-tablecloth French restaurant," says co-founder Rajat Suri, who dropped out of a Ph.D. program at MIT to start the company. "Restaurants are in a competitive market, and they love to differentiate themselves. And people just get it."

The idea came to him after he and some friends struggled to settle the bill at a restaurant. "It's like a bad joke," he says. "How many MIT kids does it take to split a check?" He came up with the idea for a computerized table-by-table ordering system, and said goodbye to chemical engineering shortly after.

The company is selling its cost-savings and margin-boosters, not just its benefits for customers sick of waiting for the bill, to businesses. First and foremost: lower labor costs, though Suri stresses that the console is not designed to replace waiters. "You still need people to bring the food, to fill up the glasses, for customers to [interact with] if they want to make, like, a really complicated burger order. It's up to the restaurant to decide how to use it," he says.

The Presto aspires to be the food-services version of the airline check-in kiosk or the ATM or the self-checkout at your local pharmacy. It makes a person's job a computer's job, and that cuts costs. Each console goes for $100 per month. If a restaurant serves meals eight hours a day, seven days a week, it works out to 42 cents per hour per table—making the Presto cheaper than even the very cheapest waiter. Moreover, no manager needs to train it, replace it if it quits, or offer it sick days. And it doesn't forget to take off the cheese, walk off for 20 minutes, or accidentally offend with small talk, either.

E La Carte also boasts that the consoles help with customer retention, keeping order histories for individual guests and letting them fill out surveys and request forms. Restaurants can use that information to follow up or offer discounted items. The company also says the consoles boost average check sizes by 10 to 12 percent, by making it easier to up-charge (want to add fries for $1?) and accommodate "impulse orders" (I want fries!).

But the company faces some serious challenges. The software is not particularly advanced, so E La Carte has competitors. The more-established Ziosk, from Dallas-based TableTop Media, offers a very similar product that has been in use in restaurants like Chili's and California Pizza Kitchen, for instance. The company recently won a spot in a Pepsi-sponsored incubator program, meaning a broader rollout might be on the horizon. It's also possible that big efficiency-focused chains, such as Olive Garden owner Darden Restaurants, might develop proprietary systems for themselves.

The existence of that competition raises a second concern. The tech is not too technical. The cost savings seem self-evident. Yet such systems are not in broad use. There are probably a few reasons why. First, labor costs are not 42 cents per table per hour, but they actually aren't much more than that. Many waiters earn as little as $2 or $3 an hour, making the rest of their living in tips. Second, installing the system means paying some up-front costs and taking on some serious risk. Many customers like being waited on in restaurants and pay to dine out in part for the experience of being coddled, cared for, and catered to by some beaming teenager wearing 48 pieces of flair.

Finally, there is the question of the tablet. E La Carte's is sturdy—designed to be manhandled, spilled on, dropped, and poked. But is it really baby-, margarita-, and idiot-proof? What happens if it looks dingy and old and clunky after a few months? What happens if the computer slows? What happens if someone comes along with an app that allows everyone to order right from their Droids or their iPhones?

Those questions aside, the market seems ready for the technology. E La Carte says it plans to announce a deal with a national chain soon. They won't say who it is. But, for what it's worth, an Applebee's executive is an investor and is mentioned in their press materials. So even if you can't always get the white tablecloth guy to bring you your check, you might soon be able to get your basket of chicken fingers ordered the 21st-century way.

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