Businesses in the leisure and hospitality sector been raising wages to record highs, surpassing $15 an hour on average, to attract and retain workers. Labor costs continue to rise in response to state and city-implemented wage increases and high prices.
Executives are eager to lower labor costs. The mentions of “automation” on earnings calls rose 67% from 4,706 in 2017 to 7,042 in 2021, according to transcripts compiled by Sentieo, a financial services company.
Unlike big, showy tech innovations—like the cautionary tale of Zume Pizza, a buzzy Silicon Valley company with a billion-dollar valuation that had ambitions to use robots to cook pizzas on the delivery route, but flamed out after growing too fast, too quickly, and ultimately pivoted to becoming a food packaging company in 2020—automation is now creeping into the service industry in more subtle ways. Tech tools are replacing specific, and often arduous tasks, often out of sight from customers.
The idea is that technology like check-in kiosks free up workers to deliver a better experience to customers. That said, efficiency created by automation will likely lead to fewer positions overall, Daniel Zhao, a senior economist at Glassdoor, a jobs site, told Quartz, adding that those who remain are likely to earn higher wages.
Let’s take a look at what kind of job an ambitious young robot can get in the service industry now.
Panera Bread announced this week that two locations are brewing coffee automatically—with more sites expected to do so later this year. The cafe chain partnered with Miso Robotics, which uses artificial intelligence to monitor the volume, temperature, and time to know when to brew a new batch. This eliminates the need for staff to manually check on the coffee throughout the day. The cost of the technology is few hundred dollars a month.
Median 2020 pay for food service workers: $11.60 an hour
Miso Robotics, a restaurant robotic startup in Pasadena, California, has also deployed robots called Flippy 2 to serve as fry cooks at some 100 White Castle locations, or a third of the company’s locations nationwide. The robot uses AI to identify the type of food (chicken fingers or french fries), pick it up, add it to a fryer basket, and then place it in a hot holding area. Flippy 2 can operate without human intervention, and the cost starts at $3,000 per month. That comes after White Castle increased the minimum wage at Detroit locations to $15 an hour last May. Meanwhile, Chipotle is testing robots, also from Miso Robotics, to make tortilla chips, after raising the national average wage to $15 an hour last June, up from $13 an hour.
Median 2020 pay for cooks: $13.10 an hour
“From an inventory and productivity perspective, we simplified tasks and automated production planning in our fresh departments, resulting in higher in-stock conditions and more time for customer interactions,” said Albertsons CEO Vivek Sankaran on a conference call with investors and analysts April 12. “For example, in the deli, we installed auto slicers and stackers and implemented production planning tools that increase product availability while reducing shrink and improved customer service.”
Median 2020 pay for butchers: $15.82 an hour
Amazon began operating cashier-less grocery stores in 2018 in Seattle, and has now expanded the self-checkout technology to Starbucks and Whole Foods. Part of the boom in self checkout technology is consumers’ growing reliance on digital payments. That said, self-checkout technology is often finicky and still requires human intervention.
Median 2020 pay for cashiers: $12.03 an hour
Restaurants have increasingly turned to automating aspects of front-of-house operations like the diner check-in process, managing the wait list, and taking reservations. “[Y]ou’re using technology to solve operational problems, not to drive customer demand,” Peter Newlin, CEO of Birdcall, a chicken sandwich restaurant chain with locations in Colorado and Arizona, told Quartz.
Median 2020 pay for hosts: $12.50 an hour
Last November, Walmart announced it was operating autonomous trucks—without a safety driver behind the wheel—on a seven-mile route between a distribution center and a Walmart store in Arkansas. The goal is to increase speed while carrying out e-commerce orders, according to the retail giant. That comes after Ocado, a British online grocer, said last October it is testing self-driving delivery vans and aims to expand the technology to the US. Albertsons in March 2021 began testing autonomous grocery delivery in northern California with remotely-operated carts delivering up to 120 pounds of groceries to customers’ homes.
Drivers have been in short supply for years; the industry is short by 80,000 drivers in the US, which could increase with more drivers retiring (pdf).
Median 2020 pay for delivery truck drivers: $16.51 an hour