Shake Shack Replacing Minimum Wage Workers With Self-Service Kiosks

Written by Ann Brown


The fast-food industry is moving closer and closer to automated order takers. There are robot baristas serving up java, and other eateries are opting for ordering kiosks instead of human order takers. Shake Shack was the latest to test this out at a location in the East Village in New York City. Many observers say fast food chains are moving in this direction to avoid paying higher wages as the minimum raise rises.

“Not only did Shake Shake intro a kiosk location, it also opted to go cashless. In October 2017 Shake Shack touted its first ‘cashless shack’–located at the company’s Astor Place location–which opened in New York,” Zero Hedge reported.

The burger chain, founded by restaurateur Danny Meyer, now allows customers to use digital kiosks or their mobile phones to place orders.  Orders then go straight to the kitchen, which has been rearranged to “eliminate friction time,” Shake Shack CEO Randy Garutti told CNBC back in October.

While the Astor Place Shake Shack may have been able to eliminate “friction,” the movie to go cashless failed. Customers complained and now the chain is making new changes. “Refusing to accept cash is not technically illegal in the U.S. (with the exception of businesses in Massachusetts), but the cashless policy seemed to run counter to founder Danny Meyer’s famous business philosophy. ‘How could the guy who wrote the book on hospitality not accept legal tender, the most egalitarian system of payment in the U.S.?’ Eater contributor Melissa McCart wondered earlier this year,” Eater reported.

The chain will move forward with its kiosks plans, but will begin adding cashiers at its cashless kiosk restaurants, according to Market Insider,

What has worked is the iOS mobile app Shake Shack launched last year. According to the company, the app has been very successful. Customers can use the app to place orders. This has generated 15 percent more revenue. This again, will eliminate even more human workers. But the company points out, these new innovations won’t entirely eliminate restaurant staff:. Shake Shack will still employ “hospitality” workers who will monitor in the dining area and interact with customers.

Yet while the chain said this is all in an effort to improve the customer experience, most observers say it is to cut out workers as the minimum wage increase. And others point out these latest moves seem contrary to the company’s philosophy. According to the founder people are Shake Shack’s “most valuable asset” in the company’s theory of “enlightened hospitality,” Zero Hedge reported.

Based in New York City, Shake Shack actually began as a hot dog cart inside Madison Square Park in 2001 before becoming restaurant, and has since become of the country’s fastest-growing casual food chains. It became a public company filing for an initial public offering of stock in late 2014. Today, Shake Shack has 136 locations internationally.

Shake Shack
(AP Photo/John Locher, File)