Fast food workers who enthusiastically joined the “fight for $15” are about to get the latest lesson in life’s numerous ironies: Shake Shack has become the latest fast food purveyor to launch with order kiosks, which the company said will help it minimize its “largest P&L headwind”: People.
In an investor presentation released Wednesday, Shake Shack touted its first “cashless shack” – located at the company’s Astor Place location – which opened in New York back in October. As we pointed out last year, self-order kiosks have already become a staple at thousands of McDonald’s restaurants, and Shake Shack is rapidly catching up. As a result, the company says it has been testing the sleek-looking kiosks at six restaurants.
And here things got confusing: people are Shake Shack’s “most valuable asset” – the crucial component to the company’s theory of “enlightened hospitality,” it said in its presentation. And yet, by “valuable” it turns out the company actually meant “expensive” thanks to to rising rising cost of unskilled labor – thanks to movements like the fight for $15, which has pushed several large US cities to raise the municipal minimum wage, in some cases all the way to $15.
“People are our most valuable asset…and our largest P&L headwind for the foreseeable future.”
What’s worse for workers, the kiosks aren’t the company’s only experiment with integrating more high-tech solutions to make minimum wage employees redundant: Shake Shack launched an iOS mobile app last year, which has been incredibly successful, according to the company. Orders placed on the app typically generate 15% more revenue. Because of this, the company is planning to expand its ability to “connect directly with guests” by adopting more desktop and mobile-based ordering options.
Translation: making human workers even more obsolete.
Of course, kiosks won’t entirely eliminate restaurant staff: Shake Shack will still employ “hospitality” workers who will hang out in the dining area and make sure everything is okay with customers’ food. At least until it finds the right robots to replace them too…
The good news: for now Shake Shack will continue paying its employees in New York City $15 an hour – $4 more than NYC’s minimum wage. Just don’t plan on being employed there too long.
And what assures that the company will continue its robotization is the market’s reaction to its efforts: the company’s stock price has persistently moved higher, beating most of its rivals.
Here is the kiosk in operation.
And while Shake Shack values its commitment to providing employees with a “livable” wage…
…we imagine it will be more difficult to “live” when you’ve just lost your job to a robot.
Read the full investor presentation below:
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