Even If Most Restaurants Reopen, Should Servers Be Worried They’ll Have No Jobs To Come Back To?
In a post Covid-19 world, are we fast tracking what was once a slow moving threat? The death of servers due to the rise in delivery and counter service.
Obvious truth: Covid-19 has decimated the restaurant industry.
It might never be the same.
Restaurateurs rang the alarm bells to governments as they’ve pleaded for aid during this turbulent time. Here in Canada, it’s been a tough battle, but help is somewhat finally on the way. Even so, it probably won’t be enough. Some restaurants, regardless of the support they receive, will shutter forever. Those that survive could look drastically different once this is over. I’ve spoken with several restaurateurs who feel they may have to change their whole operation if they do make it out alive. They’re worried. Scared. I feel for them. This has been awful and we’re not even close to being done yet.
Nevertheless, throughout this shit storm, some silver linings have emerged. Community engagement could never be higher. Help from so many sources has sprung up as those with the means have stepped up. This is wonderful. As well, to stem the tide and stay afloat as best they can, restaurateurs have been forced to innovate, as takeout and delivery have never been more desired. Every little bit helps and it may just work for a good majority of restaurants.
But what about all those front of house workers? How many jobs will there be for them once all of this is over?
These two questions have caused me to wonder if our current state has sped up what was once thought of as a slow moving threat — the death of the server. I referenced this idea two years ago in a column I wrote where I detailed the rise of the fast casual restaurant model (counter service essentially) and how it was slowly changing the industry. If you know anything about the restaurant industry at all, it wasn’t hard to see why. Costs have risen much faster than pricing. This phenomenon has squeezed already tight profit margins. If you think a 10% rate of return is the norm, then you’re dreaming. Try 5%. Cuts needed to happen somewhere. Labour is the easiest and most economical approach most assume.
**This column is a fantastic read into the cost structure of running a restaurant.
Now add in the stress and destruction of this pandemic and I’m worried most restaurants won’t be able to function unless they adopt this fast casual model or a facsimile of it. This idea, however, doesn’t even factor in the growth, acceptance and convenience of delivery and takeout. If Covid-19 has done any good for restaurants, it’s that it’s forced them to get good at accommodating these two archetypes. Nick Kokonas, the CEO behind the Tock delivery app and the Alinea Group of restaurants in Chicago, has turned his platform into a restaurateurs dream. Instead of paying a 30% commission to Doordash, Skip the Dishes and Uber Eats, his app only charges a 3% fee for the use of its service. Now granted, all deliveries must be done by the restaurants themselves, which negates some of the savings they might be receiving as employees must be hired to do the deliveries. But even still, its innovative cash saving ideas such as these, done by restaurateurs, which have emerged to help an industry looking to stay alive. A similar app is even being designed here for the local Vancouver community.
Factor in all of these decisions and what restaurateurs might be forced to reckon with is that the fast casual model and a strong reliance on takeout and delivery are frameworks they may have to adopt permanently once they reopen.
Now let me be clear, all isn’t gloom and doom for your would be server. People love to eat out and we also crave human interaction. Waitstaff are vital in this respect. This won’t affect everyone. You will not be seeing a fast casual model at any Hy’s in the near future I can promise you that. But what about fast food? Or small independents? If you can leverage your now well oiled takeout and delivery options with a fast casual model, your labour costs could drop considerably. It’s understandable why some might contemplate it as a viable option once things return to normal.
I don’t have a crystal ball here, so I hope my fear is one that might never come to fruition. But I can see the appeal. Smartphones have brought us much convenience. They’ve enabled us to communicate and do things one probably would never have dreamed of twenty years ago. Delivery is no longer restricted to Pizza and Chinese. Everyone is a player now and our society may just like the options we now have. Regarding Nick Kokonas once more, diners can now receive meals from his three Michelin star restaurant Alinea at home for a decent price. This is a restaurant where meals normally run in the thousands. Options such as these have emerged and guests may come to enjoy and want these new perks in perpetuity. I know for sure that if I was living in Chicago, I would definitely be eager to try this service from his restaurant and I might be disappointed if it were no longer offered once Covid-19 passes.
Inevitably, the question a lot of restaurateurs will have to ask themselves once Covid-19 subsides is if they want to continue offering expanded takeout and delivery. Some might think it’s worth it and to be honest, it probably is. The economics of just staying alive could prove too costly to do otherwise. These decisions, therefore, might leave a large swath of servers with reduced hours or no jobs at all. This isn’t ideal, but it may be a reality that can’t be ignored. And on top of all of this, I’ve yet to address the rise of minimum wage here in British Columbia on June 1st as well as our propensity to struggle with anchoring and its effect on how we perceive pricing, two topics I’ve discussed at length in the past.
All of these elements detail the struggle restaurateurs will be facing in the coming weeks and months. This recovery won’t be easy. Some will make it, while a few might not. But in the end, the industry will survive. Diners will come back, and restaurants will once again start to flourish. However, how they do so, under what context and system is still yet to be decided. How Covid-19 plays out from now until it resolves will play a major role in deciding how most restaurants proceed. I’m hopeful that the majority will aim to keep and maintain their current staff. But even still, this pandemic has exposed the industries weakness, that the vast majority are barely hanging on. This reality may force some to make some tough decisions. Servers may bear the brunt of these choices. It’s a sad reality, but one we should be prepared to accept.
Again, I hope I’m wrong.