In this articleMCDSOUNFollow your favorite stocksCREATE FREE ACCOUNTThe drive-thru menu at a McDonald’s restaurant showing various meal options and promotions, in Buttonwillow in Kern County, California, on 23, 2024.Smith Collection | Gado | Archive Photos | Getty ImagesSearching for ways to lower labor costs, restaurants are hoping that artificial intelligence can take down drive-thru orders — but it will likely be years before the technology becomes widely available.This year, 16% of restaurant operators plan to invest in artificial intelligence, including voice recognition, according to a survey from the National Restaurant Association. Most of the big spending comes from large chains, which have the capital and scale to make the technology work for their businesses.Even before the pandemic, labor costs had been rising for restaurants, leading operators to look to technology to boost their profit margins. Then Covid came, which not only accelerated labor costs but also led to a shift away from dining rooms and toward drive-thru lanes. California’s decision earlier this year to hike wages for fast-food workers to $20 an hour has only made operators more inclined to embrace technology to cut their labor costs, which has so far helped mostly in the automation of back-of-the-house tasks.At the same time, ChatGPT and other AI tools have fueled new excitement for generative AI in restaurants, though the industry is typically slow to embrace technological advances.One stumbling block for the burgeoning tech came in June, when McDonald’s told its franchisees that it would end its trial of Automated Order Taker, AI technology meant for its drive-thru lanes through a partnership with IBM. Once an early mover in the voice-ordering race, the fast-food giant now plans to turn to other vendors.Then there’s Presto Automation, the AI drive-thru technology company which disclosed last year in Securities and Exchange Commission filings that it uses “human agents” in places like the Philippines and India to complete orders. Presto interim CEO Gee Lefevre maintains that using humans is common in the AI industry and helps train the technology without straining the restaurant’s workforce. The company unveiled a fully autonomous version in May. Still, the initial lack of transparency may scare off some operators.While some restaurants may be skeptical of using AI for drive-thrus now, adoption may increase in the coming months and years.The tipping point for voice ordering is likely in 12 to 18 months, according to T.D. Cowen analyst Andrew Charles. That’s when he thinks at least two of the nation’s top 25 restaurant chains will go all in, expanding their small trial runs of the technology across their footprints.”It’s like third-party delivery a few years ago: Everyone was testing it, then when McDonald’s went with Uber, everyone else followed with their own partnerships,” Charles said.This time, McDonald’s likely won’t be the first mover.The pros and cons of AI orderingCompanies with voice-ordering technology say their AI doesn’t replace jobs — it just frees up workers for other tasks. They also tout secondary benefits.SoundHound, an early leader in the space, said that its AI can take more than 90% of orders without requiring human intervention; the typical accuracy rate for humans is between 80% to 85%. SoundHound also said that its AI can speed up drive-thru lanes by roughly 10% because it can process orders faster. Plus, AI tries to upsell customers every order, raising average check size.Moreover, in the future, AI could be able to take orders from non-English speakers, representing a large opportunity both internationally and domestically, according to Charles.Bu …
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[mwai_chat context=”Let’s have a discussion about this article:nnIn this articleMCDSOUNFollow your favorite stocksCREATE FREE ACCOUNTThe drive-thru menu at a McDonald’s restaurant showing various meal options and promotions, in Buttonwillow in Kern County, California, on 23, 2024.Smith Collection | Gado | Archive Photos | Getty ImagesSearching for ways to lower labor costs, restaurants are hoping that artificial intelligence can take down drive-thru orders — but it will likely be years before the technology becomes widely available.This year, 16% of restaurant operators plan to invest in artificial intelligence, including voice recognition, according to a survey from the National Restaurant Association. Most of the big spending comes from large chains, which have the capital and scale to make the technology work for their businesses.Even before the pandemic, labor costs had been rising for restaurants, leading operators to look to technology to boost their profit margins. Then Covid came, which not only accelerated labor costs but also led to a shift away from dining rooms and toward drive-thru lanes. California’s decision earlier this year to hike wages for fast-food workers to $20 an hour has only made operators more inclined to embrace technology to cut their labor costs, which has so far helped mostly in the automation of back-of-the-house tasks.At the same time, ChatGPT and other AI tools have fueled new excitement for generative AI in restaurants, though the industry is typically slow to embrace technological advances.One stumbling block for the burgeoning tech came in June, when McDonald’s told its franchisees that it would end its trial of Automated Order Taker, AI technology meant for its drive-thru lanes through a partnership with IBM. Once an early mover in the voice-ordering race, the fast-food giant now plans to turn to other vendors.Then there’s Presto Automation, the AI drive-thru technology company which disclosed last year in Securities and Exchange Commission filings that it uses “human agents” in places like the Philippines and India to complete orders. Presto interim CEO Gee Lefevre maintains that using humans is common in the AI industry and helps train the technology without straining the restaurant’s workforce. The company unveiled a fully autonomous version in May. Still, the initial lack of transparency may scare off some operators.While some restaurants may be skeptical of using AI for drive-thrus now, adoption may increase in the coming months and years.The tipping point for voice ordering is likely in 12 to 18 months, according to T.D. Cowen analyst Andrew Charles. That’s when he thinks at least two of the nation’s top 25 restaurant chains will go all in, expanding their small trial runs of the technology across their footprints.”It’s like third-party delivery a few years ago: Everyone was testing it, then when McDonald’s went with Uber, everyone else followed with their own partnerships,” Charles said.This time, McDonald’s likely won’t be the first mover.The pros and cons of AI orderingCompanies with voice-ordering technology say their AI doesn’t replace jobs — it just frees up workers for other tasks. They also tout secondary benefits.SoundHound, an early leader in the space, said that its AI can take more than 90% of orders without requiring human intervention; the typical accuracy rate for humans is between 80% to 85%. SoundHound also said that its AI can speed up drive-thru lanes by roughly 10% because it can process orders faster. Plus, AI tries to upsell customers every order, raising average check size.Moreover, in the future, AI could be able to take orders from non-English speakers, representing a large opportunity both internationally and domestically, according to Charles.Bu …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
