Robots, Big Macs, and the Fight for $15

This month, a hotel staffed almost entirely by robots opened in Japan. The robots at the reception desk include a human-like “female” robot that bows and blinks her eyes and a likewise polite English-speaking dinosaur. Robots perform other functions at the Hann’na Hotel (which means “strange hotel” in Japanese) normally performed by humans, including transporting and storing luggage and providing concierge services. In each room, there is a robot that uses speech recognition to control the lights and other in-room functions. The owners of the Hann’na claim this approach reduces recurring labor costs by 70%. Room prices at this hotel, which is part of a Netherlands-themed leisure park, start at around $80. While the use of talking robots is gimmicky and undoubtedly meant to be part of the appeal, it’s part of a larger trend in the hotel industry.

Recently, I stayed at a hotel that is part of the CitizenM chain, which operates 5 hotels in Europe and 1 in New York City. CitizenM, which opened its first hotel in Amsterdam in 2008, offers what it calls “affordable luxury for the people”. One of the ways it achieves “affordable” is by minimizing staff. Check-in and check-out is self-serve (with assistance available nearby, if required), and there is a large common area that has a manned bar and a self-serve buffet for breakfast and dinner.   Unlike full-service hotels, the CitizenM was not buzzing with porters, concierges, desk staff, launderers and restaurant workers. Outside of the common area, there was almost no staff presence.

Hotels such as the Hann’na and CitizenM offer a basic set of services that allow it to offer a lower-priced alternative for travelers who do not need or want some of the services that require flesh and blood workers. This trend is expected to continue, with other hotels adopting similar models.

Automation has long been utilized in other service industries to reduce costs.   Some services (e.g. travel planning/booking) that were once handled human-to-human are now almost completely accomplished online. Bank transactions, department and grocery store check-out, and airport check-in are examples of very successful implementations of point-of-service human-to-machine transactions.

So what does this have to do with Big Macs?  The restaurant industry, especially the fast-food segment, is an obvious candidate for automation. Fast-food restaurant chains are particularly suited to automated ordering of meals through kiosk or smart phone apps. With similar menus at every location, a youthful customer base, and a heavily reliance on repeat customers, there is little need for employees to answer questions (e.g. “Is the filet-o-fish fresh?”) or provide assistance.

Initiatives to increase the minimum wage to $15/hour in major cities such as San Francisco, Los Angeles, and New York will move the larger fast food chains more quickly toward automation. This will result in the elimination of jobs that have served as an easy entry into the work force for decades. McDonalds, which already uses touch-screen kiosks in Europe, announced last fall that they were testing similar machines for deployment in the USA. If this move will cause you some distress, you may lodge a complaint on the company’s website or by calling their toll-free phone number, which will take you into their automated customer service system.

So, the “Fight for $15” campaign, which is lobbying for a $15/hour minimum wage nationwide, could lead to movements toward automation in other areas of the service sector. This campaign is led by labor unions in part to get a foothold in the fast food industry, and it will likely backfire.

About Roberto

Roberto is a jack of all trades who enjoys life at the fringes of the bell curve. He is appalled by the shallow, emotional, and dishonest discourse on public affairs. He is searching for his true purpose in the universe through blogging.

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