The restaurant industry’s latest obsession: Your data
Once upon a time (1999 and the years that followed), there was a company named OpenTable that told San Francisco restaurants a story. Customers wanted, they said, to search for a restaurant on the wondrous world of the Internet, then click a button to make a reservation. Sure, a restaurant could just build its own website or keep managing reservations the old-fashioned way—with a book or spreadsheet offline—but OpenTable could do it all for them for a low set-up price, a monthly fee, and a dollar per diner.
By 2009, when OpenTable went public, it had a $1.5 billion valuation, and was bought for $2.6 billion soon thereafter. At the time, it controlled 90 percent of the country’s online booking market share, meaning that the service it had provided to restaurants became something like a mandatory fee. Restaurants without the service argued that they lost bookings to those that did.
Those who signed up wondered why they had to give up all their customer data to this third-party company. Competitors arose, but the industry had already changed forever: Online reservations are just a cost of being in the restaurant business these days. It’s not clear, though, that more people go out to eat just because they can book online. It’s a surcharge and a near monopoly, and cuts into the profit margins of the folks actually selling us food.
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Bruce Schneier—a well-known technologist and security expert, a cybersecurity professor at Harvard’s John F. Kennedy School of Government, and one of my closest friends—tells me about the controversy surrounding OpenTable as we wander through the Tech Pavilion of the 2017 National Restaurant Association. Every company here would be thrilled to become the next OpenTable.
None of them are focused on reservations, or at least not only reservations, but are instead trying to find other gaps where they can insert some kind of online service. Some of the sales pitches are compelling: Companies offer to harvest customer data so the restaurant can better track its clientele’s needs.
They offer to manage every aspect of a restaurant’s labor force. They offer to turn every piece of kitchen equipment into an “Internet of Things” device, a phrase now used casually in marketing, as if we all agree on its definition. Turn your restaurant into a panopticon! Schneier isn’t surprised, as he’s seen this sort of thing before in other industries. “Much of the ‘Internet of Restaurants,'” as we agree to call it, “is extractive and disempowering while pretending to be about giving control to employees and owners,” he says.
As Pacific Standard reported a year ago, the National Restaurant Association is the industry’s massive annual gathering in Chicago’s conference center, McCormick Place. It fills three huge halls (four, if you count the alcohol specific spin-off conference, BAR) with every kind of product you might need at your your restaurant: food, drink, furniture, lots of shoes, shirts, branded belt buckles, toilet cleaners, kitchen machinery (ovens, pasta makers, a sushi-making robot), pots and pans, and much more.
The giant producers and distributors (Coke, Sysco) hobnob with start-ups (Silk Road Catering, a family company making spice blends in Missoula, Montana; Nduja Artisans, a Chicago father and son making spicy spreadable Calabrian salami).
States send agricultural delegations (Louisiana seafood, Minnesota wild rice, Wisconsin cheese). A Québecois delegation served smoked meats and presumably ran out of poutine. A large contingent of Italians poured prosecco and served buratta. Celebrity chefs did demos, taught classes, and hawked their wares from large stages.
But in the back third of one of the halls, there is nary a snack to be found.
