I've never understood why restaurants themselves don't charge for prime-time reservations. If scalpers can do it, the restaurant can too.
Because let's be honest -- dining at certain highly exclusive restaurants on a Friday night is just as much of an event as going to the theater. These aren't neighborhood restaurants with average food that are meant for locals that we're talking about here. These are fancy. If you want to eat at 7 pm on Friday, why shouldn't it be more expensive than Tuesday at 5 pm?
And if restaurant owners don't want to take advantage, they can always offset it by lowering the food and drink prices slightly the whole week long. (Not that they're obligated to -- making a profit is already hard enough as is.)
I can speak to this! I was "canceled" in 2014...before it was cool...for doing exactly this[0]
A couple reasons restaurants don't do this:
1) Loss of quality control over customer experience. For example they provide a $100 dinner, but the client expects a $200 dinner. That creates bad experience
2) Desire to maintain accessibility on price point (same reasons artists don't charge more for tickets) and perceived inequities of charging extra for reservations
3) Rewarding loyal customers who value the food / brand / hospitality rather than the highest bidder which tends to bring in out-of-towners, Amex centurion card holders, wannabe influencers -- people that don't help create loyalty
There are many other reasons I'm sure as well. Most chefs/GMs/owners I talked to at the time emphasized that they sincerely are not in this for the money, and yes, they like to make a living, but being able to build a community of food lovers who are passionate about their brand is what they really care about. I ended up pivoting to try to build a shift management app soon thereafter...didn't work out but a good entrepreneurship lesson!
I mean yeah, doing it as a third party service without the restaurant's involvement or consent will obviously get you backlash. People aren't pissed with Dorsia, for example, which does it right.
Rather than charging for reservations, there could be a deposit that is applied toward your restaurant bill. The deposit could be refundable up to some cancellation period before the reservation, like 48h or whatever.
Exactly what a high end place I went to in London did. Seemed fair enough. Places are in demand but I’m not being screwed in to paying for the privilege of being able to pay, but at the cost of locked in to committing or lose £50 to cancel on short notice. I’d be fine with this being more normal.
The pricing is not dynamic though, at any Michelin restaurant I've been to. Even if it were, I'm not sure there would be any change though if the consumer knows that their net cost would remain the same, so it doesn't really matter how much the restaurant charges for the reservation fee.
This is the segment where I least understand the lack of surge pricing. Noma closed because "it wasn't sustainable". Meanwhile people made reservations as soon as they opened up and traveled there from across the globe. I know I'd paid more than they charged and I'm no billionaire.
I guess the people who works there don't just want to make food for the super rich. Maybe they have friends and family, and they want to imagine that the experience they create would also be available to people like that. And if that's the case then the "low" price is a fundamental requirement, and it makes sense to say that it's not sustainable (the combination of the quality and the price).
As I said in another comment, El Buli solved this decades ago by setting a chunk of reservations aside for locals from the town they were located in and another chunk only for people from Spain. Just do that and add a portion for friends and family.
I used to do consulting for a extremely high-end hotel where a single night could easily cost $3k+. Every employee got to spend a night for free every year and they got a number of friends and family discounts that were 90% off.
This is really common now for online reservations where I am in the UK. If you phone up, you won't be asked for a deposit. I assumed it was to combat bots. My favourite restaurant was charging £20 a person, refundable against the bill. It's a £30-40 per person restaurant.
Speaking of dynamic pricing, there are a lot of people foaming at the mouth to get this to replace the fixed rate electric utility bill. There are pro/cons to both sides (i.e. efficiency versus safety and simplicity for the end customer). In this case, I don't mean dynamic pricing to mean paying a little more during peak hours, but being directly exposed to the wholesale prices.
It would certainly help get people to consume less during major events and many assume it to be a necessity to make a fully renewable grid work. On the other hand, I struggle with the relentless need to complicate daily life (e.g. being prodded to have an app for everything that doesn't need one).
Time-of-use rates (peak vs off peak hours) have been around forever. Power users (huh, pun…) like ev owners do it, or new construction sometimes isn’t given an option, but that’s hardly foaming at the mouth.
I heard it tossed around in places like Texas, but most people realize it’s risky AF cause one high-demand day, eg from a polar vortex gone unusually far south, could easily wipe you right out.
Is it like a group of off-grid enthusiasts who can go a day or two off generators or batteries that make all this foam?
I wasn't referring to TOU pricing, but actually exposing residential customers to the wholesale market prices that a commenter below pointed out typically run every 5 minutes in most parts of the US. The utilities and actual generator owners bid into this ultra-complex auction and get an instruction on where to go every 5 minutes that minimizes operating costs and determines prices at every node. These prices are extremely volatile (pretty much the most volatile major commodity) and change rapidly in short periods of time (example: from $25/MWh to $5000/MWh within a few minutes). The bigger players deal with these prices by hedging in various forward markets and through other contracts. There is a big push from academia and a lot of the big names in the industry to have the residential customers exposed to that so the demand side of the auction finally starts working which solves a lot of the pre-existing problems coming from running a market where demand is almost entirely inelastic.
I shouldn't have used "foaming at the mouth" as the connotation is pretty negative. I should have said extremely committed or something like that. These are all smart and good people trying to solve a major problem that's been ongoing for decades. The economist in me agrees with them, but part of me also has an aversion to the constant complexity creep in our lives as well as risk.
I live in Texas. Lots of states in the use have dynamically priced whole sale electric markets, usually the price changes every 5 to 15 minutes.
Residential users ussally don't have direct access to the wholesale market and will contract with a provider for a fixed rate plan or a variable rate plan where the rate only changes every month or so. (Their can be other plan structures like, peak vs off peak rates or 'free nights', etc)
Commercial/Large industrial users will buy on the wholesale market, some manufacturers will get a subsidized rate for having remote controlled breakers installed so the grid operator can shed lead when demand is high.
Texas definitely went too far with this model. It encourages the development of natural gas peaker plants that sit ideal all day and only spin up for a few hours when the price isn he highest. (There's also a whole corrupt saga with the natural gas monopoly in the state from the early 00's when the GOP finally got hegemonic control of the state)
Dynamic pricing destroys the consumer surplus. The reason why people don’t like it is because the consumer surplus is the only reason why capitalism really provides value to most people.
The reason why less-well-off folks are more likely to support a command economy is exactly because they are at the bottom of the demand curve, thus, receive almost no consumer surplus ever… it’s like they have dynamic pricing for almost every item they buy.
It big data is allowed to defeat the consumer surplus, don’t be surprised when the political winds quickly move toward price controls.
> The reason why less-well-off folks are more likely to support a command economy
Yep, but ironically it would destroy even more of their surplus, so, at least for now, they're still benefiting.
But also, why shouldn't surplus be destroyed? You don't see people complaining when business surplus is destroyed, and it is because it benefits one party (ours) over the other (theirs), it's simply hypocrisy to think so. For a truly efficient market, surplus on either side should not exist.
I think the issue is that business surplus concentrates power to a greater degree than consumer surplus. Concentrated power, be it a business, a government, etc is typically bad because it can be used to distort the market in its favor (i.e. corruption). So it makes sense to me why even folks who favor efficient markets don't want to shrink consumer surplus, at least not faster than business surplus.
In the case of a single restaurant like here, I don't see a huge issue though.
That assumes a monopoly or oligopoly, which is not implied here at all. If one doesn't like the practices of a restaurant, they can go elsewhere, freely.
> Yep, but ironically it would destroy even more of their surplus, so, at least for now, they're still benefiting.
No one who is excluded from affording a service due to dynamic pricing going higher than their budget is "benefiting".
I'm having trouble interpreting the boundaries between individuals and groups here in your comment, the language seems to freely and fluidly move between referring to one or the other.
There is long term benefit in that it signals to suppliers that more demand exists and leads to more supply.
> No one who is excluded from affording a service due to dynamic pricing going higher than their budget is "benefiting".
If everyone cannot afford a service, then that means there is limited supply. Any option other than increasing the simply simple favors one party over another for some reason. For example, if price is kept lower than the highest bidder, then it favors whoever was first (which is unfair too). Or you can do a lottery system, which is “fair”, but not necessarily desirable for a society of every limited service is distributed via lottery and hence removing all incentive for competition.
I had a typo in my previous comment. The first “simply” should be supply”.
> than increasing the simply simple favors one party over another for some reason
This comment chain is about dynamic pricing, which does not necessarily involve third parties (assuming you mean scalpers).
> That happens anyway in a market
What happens anyway? Price discovery? Dynamic pricing allows for better price discovery, that is obvious. Whether it is done by sellers or resellers is irrelevant.
Obviously, different businesses have different mechanics, so the cost of that price discovery may not be worth the inconvenience. For example, a restaurant might want to eliminate scalpers so they can require IDs, but still increase their price with every 20% of capacity they sell.
> Dynamic pricing allows for better price discovery, that is obvious
You'll have to clarify your definition of "discovery". Your attempt to keep it vague is suspicious to say the least.
What dynamic pricing actually does is define and enforce pricing according to unilaterally controlled procedural structures. It is basically a capture of the pricing mechanism. Price discovery already happens in the market as the result of people buying and selling things, this is what's already obvious and is understood from Finance 101 by literally everyone.
Traditionally, how price discovery occurs in goods and services (excepting speculation) is 1) market research and 2) adjusting offered prices in cases of massive recognized disparity between supply and demand to maximize the revenue. As an example of 2, if a restaurant wants to start charging for reservations they first set a price, eg $20, and if they book solid they raise the price after a couple weeks or if they can't get any revenue from this they lower the price. That's the extent of "dynamics" that are necessary here.
You don't need to create some additional service that adjusts these things on the fly, first there is no value for the manager who's already watching and synthesizing this activity as part of their understanding of the operations, and also, it costs more for everyone involved compared to the baseline in order to, what, create one job in the economy?
> What dynamic pricing actually does is define and enforce pricing according to unilaterally controlled procedural structures. It is basically a capture of the pricing mechanism.
A seller cannot “enforce” any price, buyers have to choose to buy at a price. That is the price discovery.
Price discovery already happens in the market as the result of people buying and selling things, this is what's already obvious and is understood from Finance 101 by literally everyone.
Correct.
> You don't need to create some additional service that adjusts these things on the fly, first there is no value for the manager who's already watching and synthesizing this activity as part of their understanding of the operations, and also, it costs more for everyone involved compared to the baseline in order to, what, create one job in the economy?
With computers, this is not even a job. Lots of businesses like airlines and hotels already use programs that use data from previous years’ trends as well as searches and accrued reservations statistics to forecast demand and constantly update the price.
As I wrote in my previous comment, a simple program can raise prices as supply decreases, a slightly more advanced one can keep track of the pace of reservations and reduce prices if the pace drops, or if it gets too close to the expiration date for an expiring good.
Capitalism is a tool, not a law of nature. Perhaps we quite simply do not want to eliminate all surplus, because we like the result of a system with surplus.
Why would you want such a system? Capitalism is not a law of nature but markets, in aggregate, across many cultures, certainly are, for some definition of nature (perhaps human nature) which is not wholly consistent with the literal laws of nature such as those of the physical world.
Imagine you see a painting you like... you really like it... but you don't even have to look at the price because you already know what it is. It's the most you would possibly pay for it. That's eliminating the consumer surplus. Everything would be priced at the highest possible price that you'd still pay. Need to fly home for a funeral? Suddenly plane tickets are $10,000 because they know you wouldn't miss it for the world.
You need only look at the difference between catering/decor for a wedding and catering/decor for any other event to see how much wealth extraction... how much poorer we would all be, if we lose the consumer surplus.
> Everything would be priced at the highest possible price that you'd still pay.
That is almost always the case anyway. Things are priced at the point that one would pay. To lament that on behalf of the consumer and not of the business is hypocritical, or more concretely, self-interested, as of course we all are.
> how much poorer we would all be, if we lose the consumer surplus.
To summarize my point, imagine how richer we would all be if we didn't have to pay anything at all. Unfortunately, that is a false world; production depends on consumers paying what they can and businesses charging what they must.
> Things are priced at the point that one would pay.
No, things are priced at the point that the market, as a whole, is willing to pay. If you're someone with an above-median income, you're usually paying less than you otherwise would.
Most purchases you make don't start with the merchant checking how much money you have in your savings account.
>> Everything would be priced at the highest possible price that you'd still pay.
>That is almost always the case anyway. Things are priced at the point that one would pay.
No... not at all. When you need to fly home for a funeral of a close friend, suddenly plane tickets cost $10,000 for you and only you. Your neighbor could get the same flight for $200, but would not be allowed to transfer the ticket to you, because, well, them's the rules in a no-consumer-surplus world.
The vast, vast, vast majority of the time, most people are paying far less than the would pay for things if the companies they bought them from could use dynamic pricing. This is what the consumer surplus is, and is why markets generally worth for both consumer and seller.
> suddenly plane tickets cost $10,000 for you and only you. Your neighbor could get the same flight for $200
No? How can the neighbor get a different deal than one you are looking for in the case of plane tickets? It's not like the airline knows that you are flying for a funeral. Even if they did, as you mention in a non-surplus world, well, yeah, that's how markets work, people have different needs and pay for that privilege. There are business and first class tickets for a reason, as well as prices being more expensive during holidays and summers. Of all of the examples, you chose one of the worst as flight prices are inherently dynamic.
>How can the neighbor get a different deal than one you are looking for in the case of plane tickets?
This is literally how dynamic pricing works, and it happens all the time.
>It's not like the airline knows that you are flying for a funeral.
Yes, they could. A company armed with the biggest of big data could scrape that information fairly trivially. This is my entire point. The more companies know about us, they more they can use dynamic pricing to extract the highest price we'd probably be willing to pay... personally.
>There are business and first class tickets for a reason, as well as prices being more expensive during holidays and summers.
These are different products. Dynamic pricing is different pricing for the exact same product depending on the who the customer is... typically their demographics data.
Sure, but I'm pretty sure no airline does this currently. The fact that they could doesn't mean they do. And even if they did, there is no reason why they shouldn't, if one believes that surplus on either side of the market creates inefficiency.
Taking this further, if big data can eradicate the consumer surplus, then maybe big data could make price controls more feasible. Maybe big data actually could make a command economy kinda work.
There is a book called The People's Republic of Walmart about how "command economies" work in corporations, and why we couldn't have something similar in the general economy. I remain unconvinced, however, because the difference is that the amount of data you need is vast and often uncapturable, uncollectable. You basically have to know everything about everything, so markets are a better bottom up emergent simulation of supply and demand, hence why they work so well, at least in the aggregate.
El Buli had some of this figured out decades ago. They set reservations aside for locals from their little town and another portion for people from Spain. However, you had to write an application(!) instead of using an auction for the remainder.
At least for ultra-fine dining like El Buli, Noma or Central 1) should be irrelevant. I've had this argument with restaurateurs before and it seems that they are a lot more concerned about some magical "fair" prices than much of the customer base. I've looked several times into traveling to Copenhagen to eat at Noma. At that point, who gives a shit if the meal is $300 or $1,000?! It all pales compared to the travel cost. If people aren't willing to pay it, the auction won't go that high. Easy peasy!
And then I keep hearing that fine dining isn't sustainable. Just charge more!
You "looking" into travelling doesn't pay Noma's bills. Fad places where "the high price is the attraction" like the Salt Bozo aren't sustainable because the fad passes.
Me flying to Spain and going to Arzak which has been around for many decades certainly paid their bills. It's telling that most people on tables around us were speaking English as well.
People hated your business because you brought ticket scalping to the restaurant world. Many years ago, I went on a couple dates with a 'professional' ticket scalper; as soon as I found out what she did (which she tried to hide with several all-too-transparent euphemisms), I noped right out of there. These people are the worst of capitalism.
I don't think most people mind when a restaurant sells the moral equivalent of tickets to dining slots ahead of time. I've visited restaurants that do that, and had no problem with it.
The issue is that you were taking something that was free (open reservation slots), and then forcing people to pay for them if they wanted to dine there... when they could have just made a reservation -- perhaps farther in advance -- for free.
I agree that most people in the restaurant business aren't in it for the money (if they are, they've picked the wrong industry). But scalping reservations to their restaurants is making things worse, not better.
The scalper issue would go away if tickets were auctioned off instead in order to find the actual equilibrium price. I know that this is a solution that some of these only platforms considered. Nothing ever happened. However, now they are marketplaces and the ticket gets sold twice which means the platform gets commission twice. So no scalpers made money on the delta between sticker price and equilibrium and the platform for commission twice. All that is money that the artist and venue aren't seeing. Just do auctions!
Edit: The reservations also weren't free. For several restaurants I've had to figure out at what time new reservation open up, set an alarm and then still sometimes not get a seat because it's already booked out. When I traveled to Spain we had one place we called late at night our time to get a reservation. None of that is free. I'd happily paid extra to avoid this trouble and beer certain that I can go to the restaurants for which I'm traveling to another continent.
> The issue is that you were taking something that was free (open reservation slots), and then forcing people to pay for them if they wanted to dine there... when they could have just made a reservation -- perhaps farther in advance -- for free.
So first come first serve is an okay way of allocating resources, but charging a higher price is not?
I would imagine the immediate problem is just that both approaches are fine, but the approach that is not fine is a third party arbing the interchange, i.e. you want either the seller or the buyer to get the surplus, not a rando in between.
Scalpers transfer goods from those with lower willingness to pay to those with higher willingness to pay. This is by definition increasing economic efficiency. Rationing of scarce resources and all that.
Transferring goods from those "with lower willingness to pay to those with higher willingness to pay" does not increase economic efficiency, it changes the allocative efficiency. But at scale, in many situations, scalping merely becomes rent seeking. Rent seeking reduces allocative efficiency. How much the rent-seeking of scalpers offsets the allocative efficiency is up for debate.
But all of this is sideways to when and whether scalping is moral or, at least, preferable in society. Not all actions which increase allocative efficiency are things we actually want in society.
Otherwise, kidnapping and ransoming children back to their parents would be a boon industry.
The first paragraph is only true if you believe the supply is fixed (ie the elasticity on the extensive margin is zero). This is often a good way to teach economics because much of the math remains the same in a production environment but when you apply it in an environment it isn’t designed for it leads to fallacies like this one. Free markets and capitalism work precisely because it isn’t a zero sum game like this.
And your last two paragraphs are nonsensical, you are comparing the right to eat at a top end restaurant with the right to not have your kids kidnapped it’s downright laughable that you’d see such a moral equivalence.
Yes, but the restaurant has set prices they think are appropriate for their food. They want to be open to any customer willing to pay $x per person to eat, more or less. Scalpers make it so that people who can only barely pay $x per person are supplanted by people willing to pay much more. These people have higher ability to pay, but that doesn't mean they will receive as much utility as the people who are being priced out.
The restaurant cares about increasing people's utility, not about only serving a the wealthiest fraction of people who can afford their food (those with the highest ability to pay).
The rationing already occurs in the reservation process, without money changing hands.
> This is by definition increasing economic efficiency
Bespoke markets are by definition economically inefficient. There's a reason most people buy mass-manufactured cars, and it's not just the cost, it's that bespoke car production cannot make enough cars to meet demand.
At absolute best a bespoke market may sell a few more of a limited set of dining opportunities to others through the additional marketing medium. At better what bespoke markets do is maximize profit taking. At bad this maximization of profit taking channels money to the middleman that otherwise would have gone to the merchant (as there will be people who pay for a reservation and then order the cheapest meal at the restaurant, as they can't afford more). And at worst this makes it inconvenient for people to frequent the restaurant, resulting in an overall reduction of customers. The bad and worst circumstances can result in fewer operating restaurants. And artificial resource scarcity is the opposite of economically efficient.
If scalpers (who have overheads of their own) are making money then that implies the restaurant is doing the economic equivalent of leaving a lot of $100 bills on the floor. Before those bills were being picked up by random customers but now they are being picked up by people who heard there were restaurants leaving $100 bills on the floor. But the cause is ultimately the restaurant choosing to just give up free money by not charging a price so that supply and demand equal and the market clears.
You're assuming my "bad" and "worst" scenarios do not exist. And also assuming that knock-on effects don't occur which cause issues in other parts of the economy. A cartoon-like example: spend X+Y money to dine at restaurant, spend -Y less money elsewhere, people working elsewhere are laid off and can no longer afford to spend money at restaurant. Restaurant loses customers. Restaurant closes.
Mutually assured destruction does happen. The problem is if there are more potential scalpers who are convinced they know why the previous scalper failed than there are restaurants that can absorb the hit.
Forcibly divesting consumer from producer, creating two separate markets where before there was only one, is rent-seeking. They artificially created the conditions that justify their existence, and if they were to stop existing or otherwise stop their practice, the situation would revert. None of this behavior is defensible following any economic ideology except a trivially cruel one.
You will have to convince the people who actually run these platforms that that is true if you want it to be a feature of reality. It seems only you are here speaking in hypothesis while everyone else is speaking about facts of the matter.
The markets are at different times and places. Sometimes it is physical (such as on the sidewalk outside the venue). Or it could be a different website.
That's pretty strong. I won't name all the people doing much worse, but lots of people do jobs that are only about profit, such as much of the finance industry, tech industry, etc. If she was a developer for Google's ad system, would you do the same?
Actually what I like best is a refundable fee for no-show: there’s a restaurant I rarely visit by myself but often when I want to have a nice time with people from abroad; it’s a restaurant on the 16th level with an amazing view over Berlin.
Essentially, they’ll bill you 50€ per person and you’ll get it back (aka the authorization is cancelled) when you show up, but the transaction is executed when you don’t.
A few years back there were many empty tables during prime time because of the reservations, and now there’s barely any table unused.
It seems to work and I’m absolutely happy to reassure the restaurant with money that I’ll be there.
Maybe you next startup idea will be more successful: an app for tracking the location of well stocked give-a-penny/take-a-penny trays to raid, or collecting and reselling all the samples from grocery displays.
Maybe make a FakeryBakery pay kids a commission to collect grocery story Kids Club Cookies and resell them.as half-price boxes.
This comes off as excessively negative. They had a hypothesis, found out it isn't how they thought both from consumer and restaurent perspectives, moved away.
Far worse ideas sprout everyday and many get positive attention as well. Judge the process along with the idea.
With the context in this thread I would implement it as dynamic cancellation fees. You pay to reserve, but 100% reedeemable on bills. If you cancel, you lose a clearly notified percentage based on how popular the time slot is. Might work while still staying true to the idea of fairness.
I'm not sure if the article you linked was misleading, but it really just made it sound like you were scalping reservations. No wonder everyone hated on it.
If you facilitated the restaurants adjusting prices for prime bookings, then maybe it would have come across differently.
Also nearly 10 years later, the world is a much worse place. I wouldn't be surprised if blatant booking scalping didn't really raise any eyebrows.
> 2) Desire to maintain accessibility on price point (same reasons artists don't charge more for tickets)
since when were there not different prices for tickets based on seating? if a concert is only one or two nights, then the nose bleed seats could be the same as eating at the restaurant on a Tuesday night, while the front row seats would be eating on Friday nights.
Restaurant reservations are fundamentally different compared to, say, Taylor Swift concert tickets. Loyalty to an artist is multi-channel (concert tickets, merchandise, CD, streaming) and thus difficult to track and reward. Restaurant reservations occur at a single point of sale. It is much simpler, conceptually, to first offer up Friday 7pm reservations to people who have dined with you in the past, at a lower price, then open them up for a higher price to the general public if they haven't sold within a reasonable time frame.
There is another way. It involves no money and nothing for the restaurant to do. First come first serve. Basically you want in. Show up and stand in line.
Many places in Paris do that now with virtual waiting line (show up, get a number and an ETA, get bipped when it's about to be your turn...). Nice when in a walkable nice neighborhood.
One downside is that means you basically can't go to that restaurant pre-theater or pre- some other fixed time event. Though you're eating earlier if you're doing that anyway.
That might work for a more casual kind of restaurant, where you would just go somewhere else if you can't afford to wait in line. It doesn't work for the more upscale restaurants, some of which are reservation only.
Depends. For me, being in home is much better option than standing in a queue with unknown waiting time just to get the previlige of eating in a restaurant. Most people go to resturant not as neccessity but a optional visit to spend good time. And this solution takes away good time.
I agree for places like doctors visit though. Everyone should stand in queue rather than a limited reservation.
>I agree for places like doctors visit though. Everyone should stand in queue rather than a limited reservation.
What if my work schedule isn't flexible? Having a queue and no option for an appointment time means that I'll essentially never be able to guarantee a doctor's visit. I'll just have to schedule time off and pray that the line isn't too long.
They are talking about putting something like ticketmaster in the middle of this. That is scalper city. Oh then a band aid to make it work right. Then another then another. Most restaurants run on a thin margin. All of those band aids will cost money. Something the 'ticketmaster' system is not going to eat.
I’ve thought the same in NY for a while. Any reasonably popular spot is now gates by an obnoxious reservation system like resy.
I have to check every Tuesday at midnight for the 5 minutes that the next weeks tables open up before they are booked. Then I have to put down a credit card. Next I get bombarded with push notifications and texts with increasing urgency leading up to dinner that I must show up on time or forfeit money. When I show up on time they don’t seat me but suggest I go wait at bar and buy drinks. Finally they seat me and remind me I only have the table 90 minutes.
You know what, just charge me for seats. Let’s just go completely nakedly economic because you’re already 90% there with extra steps in the way.
It is called the hospitality industry but you’d never know it given what the dining experience has turned into.
I've been to places that are clearly managing their service to hit that 90 minute mark too. Over the top pestering to get your orders in the second your but hits the seat.. coming back to upsell you more drinks at the 20/40min mark, and then completely disappearing from about the 55min mark onwards so you can't put in a dessert order.
Plenty of high end restaurants in the city do this. The problem is that it usually makes things worse. If I want to book a dinner, and the restaurant has something like a $200 non-refundable deposit, I'm going to think long and hard before committing because my plans can always change. A bot on the other hand wouldn't hesitate because they can turn around and sell the reservation to anyone they want. The deposit is simply a cost of doing business for them.
> A bot on the other hand wouldn't hesitate because they can turn around and sell the reservation to anyone they want. The deposit is simply a cost of doing business for them.
If the spot itself is actually worth $200 then the restaurant was forgoing that per seat and suddenly made $5000+ per day. No restaurant is going to pass up $1.8M of “free” revenue.
Either the seats are worth the price or they’re not.
I'm fine with that. They should do it for concerts, too. A little bit of inconvenience is often better than paying market price; you can easily fill every restaurant in the city every night with people that make more money than me.
I don’t have a drivers license. The only ID I have is my passport. I never carry my passport except when I know that I need it. I don’t expect needing to bring my passport to go to a restaurant. Imagine I saved up money for a special restaurant visit, got the reservation and paid the $200 deposit but didn’t notice I would have to bring my ID. I show up and.. the night is ruined and my $200 is lost because I can’t prove my identity to the staff at the restaurant with a valid ID, since that one is still at home.
Pretty sure you're in the minority here, to the point that a restaurant that felt they needed to implement this sort of thing could easily just not care about your business, and be fine. Most people (in the US, don't know where you're from) have at least a state-issued ID if they don't have a driver's license.
Restaurants should of course disclose -- very clearly -- at reservation time that the deposit and slot are not transferable, and that IDs will be checked at the door. If you choose to make that reservation, knowing that, and then show up without an ID, that's on you.
> ... but didn’t notice I would have to bring my ID
That would fall under the category of "that's on you".
Regardless, I would hope that a restaurant would try to find another way to verify you are who you say you are, like perhaps asking for the credit/debit card you used to make the reservation, or even just asking to see something on your person that looks vaguely difficult to forge and has your name on it. We're not talking about a high-security situation here.
What area of the world has only a passport as its main form of ID? Or do they have a local form of ID that you choose not to adopt? Because as far as I know, most places in the world have some sort of driver's license or state ID equivalent.
We have drivers licenses in my country too but in our country you can get around fine with just public transport and walking by foot. And it’s a bit expensive to get a drivers license for me, plus time consuming. I want to get one soon, but don’t have one yet. Likewise a lot of other people in my country don’t have one either.
Sounds like what the parent said, "that's on you" to fix that, then. In the aggregate, your (as well as those similar to you's) business is simply irrelevant to the vast majority of businesses that need to check IDs. Just because you don't want to get such a driver's license does not mean that a restaurant must honor your choice.
> If it’s too expensive to get a drivers license then it’s probably too expensive to go on a night out too.
No. In my country there is a requirement to have a certain amount of training with a professional driving instructor. For most people here the cost of that will amount to about $3000 USD. And it takes a lot of time too.
Just because I don’t have $3000 USD to shell out for that currently, nor the time for those lessons and self-study, does not mean I cannot afford to go to a restaurant.
> are there other options for ID?
Yes there are other options, but I have no use for a National ID card really when I already have a passport. Having to show ID only happens in two cases for me most of the time:
- border control when I am traveling, in which case my passport is required anyways in many countries
- retrieving packages that were too big to be delivered in my mail box. And even then most times I don’t have to show ID
It also used to be the case that I had to show ID when buying alcohol and tobacco. But being 32 years old now I usually don’t get asked for ID in the store in my country anymore.
I know that the ID situation in the US is complicated, but if you qualify for a passport, don't you automatically qualify for non-driving ID in your state as well?
You have to prove residency in that state as well. This would mean a utility bill or voter registration, most likely. If you live completely off the grid and don't vote, you could probably not get a state ID in some states.
The US issues passport cards you can stick in your wallet, as well as the books. I carry mine because my state ID isn't "REAL ID" compliant, which is amazingly a thing that starts to matter before my ID expires.
Financial documents (eg: bank or credit card statements, loan documents, tax filings) with your name and street address on them are also a valid form of demonstrating residency in most (all?) states.
Neat hack related to that. My wife wanted to take her girls weekend friends to what is currently one of the most difficult reservations to get in the US. I had free time during the window when reservations opened up so booked it. Then realized the name on the reservation was mine. Resy lets you change the name on the account to anything and it carries over to the existing reservations. I changed the name on my account to hers and they had a great time.
Trouble is, I keep forgetting to change it back so now we never know what name a reservation will be under.
I'm basically never a no show though I do sometimes cancel day-of if something comes up. I really hesitate to put down a deposit that I can't cancel because stuff does come up, especially when traveling.
My friends actually had a startup that did exactly this and had pretty great initial success.
Restaurants could pick how much they charged for reservations, whether that cost could be applied to a portion of the bill, or whether it was a straight up auction for spots.
They thought there would be pushback from customers, but the customer feedback was excellent.
The friction mostly came from the restaurants. They either had antiquated reservation systems (many on pen and paper) and didn't like the idea of letting software control their table planning (since free reservations could be cancelled on the spot on the whim by the serving staff but cancelling a paid slot really irked everyone). Or poor accounting practices that made it really hard for them to accept that a customer already prepaid $500 for a meal in another system that'll all be bundled in a big check later. Or that they couldn't be sketchy about customer tips if it's being tracked.
It was also difficult to scale the business quickly because every restaurant had to be trained and onboarded individually, and every restaurant had an unicorn of an operation that the software had to be able to handle.
I think Tock tried to do dynamic pricing for tables. (Tock was founded by Nick Kokonas a former Chicago mercantile exchange trader and co owner of Chicago-based Alinea). Alinea also has other ways to prevent no shows like selling tickets etc.
Yeah, I often like eating earlier and in some places, happy hour can be a really good deal. Just ate at my standard pre-theater place a couple nights ago that has $1 oysters--which I love but hate spending $3 each on.
Yeah. I'm sort of amazed this place still has them at that price. Surely it's a loss leader to get people in at Happy Hour. (This is Massachusetts.) Works for me though. While I otherwise like the place well enough I'd probably be going somewhere else absent the happy hour oysters.
In my city in Germany they are now doing exactly that - no show must pay. While there is no flood of bots we have trade fairs and too many people hosting a group guests started reserving seats in Chinese, Italian, Steak etc. restaurants to later offer their guest a last minute choice.
Out of curiosity, how does that work? When making a reservation do you have to provide your credit card? I highly doubt that given that it's Germany :) Seriously though, how do they make people pay?
Exactly that: “Please provide your card to complete the booking”. I was so pissed about it I signed up for Revolut (for their single-use cards). Funnily enough, restaurants that force you to do this are neither the best nor especially highly rated.
In my experience, restaurants taking deposits will actually charge the deposit to the card at the time you are making the reservation and credit it towards the final check amount if you do show up.
I’ve seen it both ways. For larger parties most places near me charge upfront. For couples or parties up to 4 the charge hits 48 hours before your reservation or whatever the cutoff happens to be. In one case, I did have to get the bill adjusted because the restaurant forgot the credit our deposit. I think it was an honest mistake since we’ve never had a problem there in half a dozen other visits and it’s only for parties over 8 that they charge the deposit. Seeing as the whole place only seats about 40, they don’t get many large parties.
San in berlin does this. Im surprised at how many users on hn have never experienced or even heard of the practice considering the average income of the group.
“Why would I leave my house to pay someone else to shake up my bottle of Soylent? I can just buy it premixed.”
“My work has an excellent and free cafeteria. I just eat there and stuff my pockets with things for the company bus ride to my apartment in the hive my company developed.”
“I’m kind of creeped out by restaurants because of the whole power dynamics of someone there to ‘serve’ me. And on top of that they want to know all kinds of stuff about what I want to eat. I think they are collecting all that information and then targeting me with advertising.”
I've been to a restaurant that already does this: pay $X a head, with that dollar amount applied to your bill. I want to say one of the big restaurant POS providers (maybe Toast) provided the infrastructure behind it.
Most restaurants will have a cheaper menu for lunch than for dinner. Nice places will usually have different menus, but many just serve the same for simplicity and cost.
I think this is actually common now. I'm often asked to make a deposit on a reservation when using Resy.
I'm not aware that there is variable or dynamic pricing component to it, however. That's a great idea and something I bet they are considering.
In practice, dynamic pricing it is not a panacea. You still need to beat the arbitrage market. Charge too much: customers don't reserve. Charge too little: brokers snap it up.
On Resy, at least, there is not dynamic pricing (though, in theory, restaurants can apply different deposit/cancel fees to different "reservation types", or different days. But nothing dynamic based on demand or anything)
I thought "Lunch Menu" and "Dinner Menu" were a way to reasonably implement precisely that.
On the other hand if it gets more granular... there may be no winning. Budget-conscious will feel they're being priced-out, and the fancy-rich will not go to a restaurant that nickle-and-dimes / seems desperate for every last cent.
Weirdly enough restaurants don't want reservations. They want long lines.
That way they create a situation where you SEE how popular a place is. A line is much easier to see than a date dropdown that is booked out for 2 months.
It's also easier to keep the restaurant full. A full reservation where not everybody shows up might cause empty tables.
Does this really sound like an ethical practice to you? This doesn't benefit customers at all. Especially if it is already expensive, why make it more expensive?
Well artists do charge differently for different areas of the venue. One could argue that prime time dinner is equivalent to watching Louis CK from the first few rows.
"When guests drop $100 or more just to walk in the door, “people have [the] wrong expectation when they come” he says because those expectations might be unreasonably high."
There's an app called Dorsia, which lets you purchase seats at sought-after restaurants. The purchase is usually in the form of a per-seat minimum spend. They start at $75 per seat, but some go into the hundreds. This app solves a few problems at once: customers get to buy their way out of the seat-scouting process (keenly watching the apps for open reservations, walking in and putting their name on the waitlist, bribing the host, knowing someone with pull, etc), restaurants guarantee some of their seats go to high-spending clients (you could walk out with spending $35 at a good number of these spots), and companies have something to offer to their customers as a perk - Dorsia membership (the fancy gym chain Equinox gives their customers Dorsia access, for example). None of this is democratic, but that's the nature of luxury.
Dorsia is fine for what it is, but doesn't really solve the problem at hand. High rollers can always find a reservation regardless of scarcity, and similar services like Amex Concierge have existed for a long time now. Restaurants however also have to care about the other 99% of their clientele.
Kaan, in Portland, won a bunch of restaurant of the year awards and became overwhelmed with out of towners trying to book the place up. The owners recognized that to stay open long term, once the hype dies down, they need locals able to get in the door too. They have started experimenting with crossovers where if you buy a lunch at a neighboring business on a certain day, you can jump the line for reservations at Kaan a month or two later. They also played with people who dine at their bar can get restaurant bookings early. It’s only been a couple of months but they’ve seen success in filling the in demand seats with a mix of locals and big spenders from out of town.
Why should a rich person be able to experience luxury more often than a poor person? Wouldn't it be more fair to allocate the seats randomly between all people that'd like to be there?
Allocating a scare resource so that some people can use it multiple times while others can never use it isn't exactly democratic.
Why should everyone have perfectly equal access to non-necessities? What, specifically, is “democratic” about making sure poor people can also get reservations at restaurants? Should everything in limited quantity be given away in a pure lottery?
By what measure do you or I deserve more than poor people?
Every society has some measure for who deserves more and who deserves less. The Nazis determined it by ethnicity. Other societies determined it by whether you were born into noble families. Our society today determines it by wealth, which in the end is just a proxy for ancestry and luck.
A truly fair system would allocate resources only based on factors entirely under your own control. It's not fair if you're punished for being born into the wrong family.
It follows that using wealth as a measure is definitely a bad choice.
Boiling wealth down to solely luck or family is a wild leap, and I’m not sure how you’d support it with actual evidence. Counter examples are trivial.
I’m also still not clear why money is a bad tool for acquiring luxury resources. We’re not talking about necessary food and shelter, we’re talking about a high end restaurant.
Is there something wrong with saving money for things I want? Why should I have to enter a lottery for everything? Maybe I end up with a trip to Disney World, which I don’t want, instead of a nice date night with my wife, which I do want. Is there some reason you think that’s a more desirable situation or more fair?
It feels like a weird way to try to be equitable for things that will never, ever be equitable, and a strange, unsupportable justification for it.
You may have misunderstood me — I didn't say luck or family is the only source of wealth. But in a just world, luck or family should have as little influence on your allocation of resources as possible.
Wealth amassed through working and saving your wage is a just and fair system in my opinion. It's still biased as not all wages are fairly negotiated, but it's the most fair solution today.
My vision for the world is a socially democratic one — everyone is guaranteed a basic level of survival, similar in terms of housing, medical care and food access to what you'd get from a university dorm and cafeteria.
Beyond that, people can gain wealth from their own work and save it up. If you'd rather eat at a cheap restaurant every week, or a michelin star restaurant every few years, should be up to you.
But your wealth and your access to resources should come from your own work and not the luck of being born into the right family, the right ethnicity, the right country, or the right caste.
>It follows that using wealth as a measure [for deserving] is definitely a bad choice.
It's not a choice. Would you rather it be wealth or violence? As civilizations mature, the power that happens to be encapsulated in a tribal (read gang) leader's threat of physical violence and banishment transmogrifies into debt obligations once a strong civil law foundation is in place.
>By what measure do you or I deserve more than poor people?
Who decides who deserves what? Let me know and we'll start lobbying next Monday ;)
“Don't you understand that it's a question of power, and money means power. It's as simple as that.”
Democracy is a system of governance, attempting to use votes to provide equal representation to people. The mechanism for allocating resources is a different topic, as is determining what is and is not “fair”.
>Why should a rich person be able to experience luxury more often than a poor person?
Because that is the benefit of being rich. Perhaps this question is better phrased as “Why should there be a wealth/income gap greater than <$x>?”
>Why would you work harder to get rich if you don't get anything for it?
this comment wouldn't be nonsense if we lived in a political economy where money came exclusively from working hard / hazardous / difficult jobs, but in case you forgot, plenty of rich people have never worked a day in their lives and either lucked into an inheritance or sit on their ass and cash rent / dividend checks
The only reason I acquire wealth is to improve the lives of my children and grandchildren relative to their peers. If that option was taken away, I would have no reason to do anything but the bare minimum.
This is such an utterly insane position that I find myself doubting that you are being honest here. It suggests you don't actually care at all about the wellbeing of your children, and only about your family's status.
Imagine a scenario where you could banish your children to a hellish, poverty-stricken existence -- but their peers would be even worse off than that. Alternatively, you could give your children a happy, comfortable life, but all of their peers would be equal to them.
Are you seriously suggesting that you would choose the first option, not the second one?
Your question implies a central planning of allocation of resources which we know from history results in exactly the hellish abject poverty you were so concerned about. Market economies full of rationally self interested people create the best life outcomes for everyone around. We are ALL better off if we are all in friendly competition to live the best lives possible.
I agree that friendly competition is important. It's the "relative to their peers" part that I find shocking.
Obviously I want my own children to live the best possible life I can give them, but I want their peers to do well, too. It is crazy to me to care only about your children's status in their community, rather than their absolute wellbeing and the wellbeing of the community they are a part of.
Maybe the market bifurcates into this willing to pay in money for tables like this vs those willing to pay in time (waitlist, walk in and convoluted reservation systems with small windows).
> It also sparked the idea of adding the admission charge to the food bill, so customers would not be asked for money at the door. (In his early years, Dimitriou had encountered profound resistance to a cover charge and he often operated Jazz Alley without one, feeling it set the wrong tone for the kind of fine dining establishment he was trying to create.) It worked, and music lovers in general began to view the club as an upscale destination for special occasions. By 2015, the Alley was taking in more than $3 million in admissions.
So, there are a lot of comments saying that reservations should charge an up-front fee and apply that to the food, but I don't think that will work. First off, plenty of restaurants in New York do that and the problem persists. The underlying problem is that with scalpers buying reservations, they are proving that the market will bear a higher price. People that buy scalped reservations are paying the scalper a fee which WILL NOT be applied to their bill. That means the restaurant is undercharging.
The solution to this problem is to handle restaurant reservations like airline reservations. They check your ID before you can board the plane. No reason that restaurants can't do the same. People would be mad, of course, but that's the only way you can prevent a secondary market from setting the price. (They should do this for concert tickets and things like that as well. Artists intentionally sell tickets below market price so that their fans don't get mad at them, but economics simply doesn't all this to exist; someone will always step in to take the profit that you left on the table. By requiring ID, you can prevent the market from stepping in, because the pool of buyers goes down; only people that can get a government ID with your name on it can buy your ticket on the secondary market. John Smith is probably out of luck, but everyone else is fin.)
Overall, I don't think the restaurants have a particularly strong incentive to solve this problem. At the end of the day, they are made or broken based on filling up their tables. They do fill all their tables with the current system. So the next remaining hurdle is increasing "fairness". There isn't a way to do this without annoying someone. If they check IDs, someone will be mad that they had their ID checked. If they charge an entrance fee (i.e. a cost for the reservation that isn't applied to your meal), then someone is going to be mad. (The staff will also probably be mad; if you pay $100 for your seat, that's $100 less to tip with.) At the end of the day, I think charging market price on everything is the most fair. If people will pay $100 just to get in the door, they should take the $100. I would definitely pay it for special occasions; you can do it 6 times a year and still pay less than the annual fee on your Amex Plat card!
Overall, I don't think the restaurants have a particularly strong incentive to solve this problem.
This is the identical to early perspective on the secondary market in event ticketing: a sale is a sale, our work is done.
That means the restaurant is undercharging.
Then you realize how much money you are losing to arbitrage and the work begins.
A couple of decades later, you have variable pricing, dynamic pricing, distribution to expedia, official secondary market partnerships, conferences, niche-y saas products, competing enterprise products, revenue managers, specialized masters' degrees, papers at INFORMs, revenue directors, VPs of sales and revenue,
and a bunch of people who just want to cook and eat
The complexity is added to achieve a complex goal. In the case of airlines, it's so that you can walk up to the ticket counter 45 minutes before a flight, slap down a wad of cash, and get on that flight... while still ensuring that every plane goes out completely full even when that rare event doesn't happen.
For restaurants, the complexity they're adding is fairness. They don't want to only cook for rich people, they want to cook for everyone. But their food is so good that if you sorted the net worth of every customer every night descending and invited customers in in that order, there would never be a person in the restaurant with less than 100 million dollars. So, to ensure that net worth isn't a factor on who gets admitted, they have to add operational complexity, basically distributing tickets by random lottery and ensuring that people can't sell those tickets.
The current system is basically a competitive auction with extra steps. The competitive auction ensures that only the people with the most money can eat at your restaurant. If you are a restaurant and you don't like that, then there is no choice but to move to a different system. If you're fine with it, keep doing what you're doing. Many restaurants already do that and they are full every single night.
Less effort needed than that - charge $1 for a reservation. Just enough to be a valid purchase.
Ask them to check out with the same credit card at the end of their meal.
Blacklist any card used for a reservation consistently not matched. Cancel all their RSVPs.
We don't care about the odd reservation where someone books and someone else pays - that's rare and individual people don't book that many reservations. Worst case they call support and you set a note to not apply the rule to them.
This means scalpers now need to rotate cards. That sucks and is going to hit other limitations.
That's why canceling the RSVPs is important. You just screwed over the scammer and their current "orders".
Even if the scammer rotates a new virtual number each time, the high number of cancelations on them is enough to trigger inspection and a personal ban (since they still need their name/address on all the virtual numbers).
This might technically work, but everyone would hate it. And that’s why it won’t happen, because people would hate it so much that it would have to be enacted en masse, and there’s no way to coordinate that.
Seems to me the real fix is to take reservations over the phone, not rely on apps and intermediaries to handle stuff that can easily be handled by humans, and move on.
I'm not sure that makes sense. You now have to pay someone to maintain a reservations book and be available at any time to receive the phone call. Meanwhile, the reservation companies can just have ChatGPT make the phone call for you; do you think that restaurant employees can administer a Turing test or that ordinary customers could pass a Turing test?
Meanwhile, anyone that cares about this can still delegate it to a human. Call the Amex concierge, "can you get me into FooBar at around 7PM any night next week" and they take care of it. The phone adds no fairness; it opens up a way for middlemen to offer a service that you pay for but that the restaurant never sees.
While maybe a rare situation, software to handle reservations is a great idea. You instantly save one employee's worth of work for a tiny amount of money.
The other option is to only take walk-ins, but then you risk having empty tables when people are tired of waiting in line. I am sure many places have tried walk-in only, only to be disappointed about not making enough money. Restaurants like reservations.
Online reservations are so much better than phone reservations, both for the restaurant and customer.
As a customer, I see exactly what all my options are, immediately, and can easily switch days to see what else is available. Needing to manually tell a human what I'm looking for (which I might not even know yet, without seeing all the options), and have them read something off a screen or book to me, is a waste of time.
And for the restaurants, they don't have to pay someone to answer the reservations phone number when they're not open. And they don't have to distract staff from their hospitality duties when the restaurant is open. Also I'm sure all of us have called a restaurant while they're busy, and have had to repeat what we've said to busy, overworked restaurant staff member who can barely hear us on the phone over the din of the restaurant behind them.
Checking ID on entry lol, Maybe they can pat us down and shout at us like an airport too then. Many restaurants services levels are already heading that way.
The ID check is revenue management, the magnetometers are to make you feel safe against terrorism. They happen at the same place in the airport, but they are totally different things instituted for totally different reasons.
Since restaurant patrons aren't avoiding restaurants due to terrorism concerns, there would be no need for a security check. Revenue management is, however, broken. (You can't eat at your neighborhood restaurant anymore because tourists are buying all the seats from a bot.) So that's why the ID check is necessary.
I'm not saying that restaurants should do this, I'm just proposing a system that would actually work. Most likely, nobody really wants to solve this problem; huge banks like Amex can extract an extra $700 a year from people that care.
The clientele at a high end restaurant is very different from teenagers standing in line outside a concert or bar. I have experience in this area and I can tell you that the majority of patrons would laugh in your face or get angry and storm off if asked for ID at the door of a restaurant. I wouldn't be surprised if most don't even carry it around with them.
> I have experience in this area and I can tell you that the majority of patrons would laugh in your face or get angry and storm off if asked for ID at the door of a restaurant.
Nobody is going to go through all the effort of getting a reservation, traveling to a restaurant, getting to the front desk, and then storm out and ruin their entire dinner plans on principle just because they were asked for ID.
> I wouldn't be surprised if most don't even carry it around with them.
I highly doubt that people are bringing their credit card but not their driver's license when going to a restaurant. Why you think anyone would arrive with a means of payment but not a 10 gram ID card is beyond me.
These clients never fly commercial? I am not inventing a new system here; I'm stealing revenue management from the airlines. Same exact problem; you lose money if all your seats aren't filled, and you can charge some people more money than others. Airlines are the masters of this, and the reason the system works is because they deleted the secondary market.
Remember, the goal of this process is to add artificial fairness. The people with the most money are the ones least likely to like this system; they LOSE benefits under this system, as the current system meets all of their needs. They can eat anywhere they want, whenever they want. That is why they would get angry and storm out. Some would argue the whole idea is to make them angry and storm out, so that people that live in the neighborhood can eat there once in a while. Or, so that the restaurant can take the revenue that scalpers currently take.
I don't dine at places expensive enough to have encountered this issue. But I do like to dine frequently at high-demand restaurants. The issue I've noticed in NY is that the online reservation platforms have made it trivial for restaurants to require a credit card and charge massive cancellation fees. I've seen mid-range places with $50 fees per person if the reservation is cancelled with less than 24 hours notice.
The solution to the above shitshow is the same as the solution to these scalpers. The telephone. Few places will collect your credit card information over the phone for a reservation. And places dealing with scalpers can take names and inform guests that they will need to present ID on arrival. Not an entirely frictionless solution, but I think most people won't mind showing their ID if they are given advanced notice.
How is telephone calls a solution? Scalpers can easily outsource it to some call center abroad (which they already do for all other types of scams), while legitimate customers now have it much harder.
The person you replied to is just suggesting that restaurants often don't take your card over the phone, bypassing the opportunity for them to charge you a cancel fee.
Vs. using their online booking platform to do it
On the subject of scalping, I've never understood why tickets can't be bound to a particular identity. I.e. if you buy tickets as "John Smith", only someone who can prove they are "John Smith" is let through the door.
In my head, this completely decapitates scalping as a business. Why can't this also be applied in other sectors (i.e. restaurant reservations)
The issue with scalping is it generally doesn't harm the business. To them, a ticket is a ticket and "Oh shucks, sorry you didn't get the one you wanted". Similar to how hoarding goods during a crisis works.
So, to answer your question, companies could solve this problem by binding a reservation to an ID. However, there's very little incentive to do that. There's also a slight downside when people show up and say "Oh, forgot my ID". Now you have a fight at the entrance you don't want to deal with.
Presumably that hypothetical customer would have a credit card with their name on it or a significant amount of cash the get themselves through the door.
They literally do that. In Germany, expensive concert tickets will usually have your name on them. People still try to sell them at the venue to their marks but even when the ticket you buy from a scalper isn't fake, you might still be unable to use it because of the name mismatch.
In quite a few countries (most notably and possibly surprisingly including the US), government identity is not that easy to come by and/or controversial in some way.
In places/contexts that do have functioning identity ecosystems, that does indeed solve the issue, yes. For example,this is why airline ticket scalpers are not a thing in the US: TSA will validate every passenger's ID matching their boarding pass before being allowed into the airport.
The US is quite an odd beast when it comes to ID, but as far as I understand, not having a government ID at all is mostly a problem with the lower socioeconomic classes. I don't think the people who put down $100 for a reservation will have quite the same problem.
Even if government ID is out of the question, asking for a credit card with the same name should also work as an alternative for those without a drivers' license or any other form of ID. I don't have any numbers of course, but I suspect there's not a lot of overlap between the groups of people who don't have credit cards or ID and the people who go to these expensive restaurants.
Many other countries (and private airlines) will match your ID with your boarding pass; however, airlines often allow you to change the details on the boarding pass up to the very end, sometimes for a small fee. When the scalpers' customers go through security, their boarding passes match their government ID. If airlines wouldn't allow you to change the name on your ticket the day before your flight, scalpers would probably lose a lot of business, at the cost of minor inconvenience to customers.
Charge a reservation fee that is can be refunded as a credit that can only be used at the restaurant. It will be deducted from your bill or can be used at a later date. Real customers won't object to that.
This is more of a barrier for legitimate customers than bots. I'm not paying a non-refundable deposit unless I'm absolutely sure my plans will not change (which is...never). A scalper doesn't care because they are anyways going to find a buyer and just pass the costs on to them.
You could require the customer to present the same card before being seated, but I agree that that's making things pretty inconvenient for legitimate customers.
This is now fairly common where I live (Amsterdam) and since COVID I notice it a lot more. Many restaurants have a reservation fee of €10 or €20, sometimes even more. It's flexible enough that you can reschedule till 8 or 12 hours before the reservation and it's deducted as part of the bill. If you are a no show, you forfeit the deposit. Definitely creates a barrier for scalpers because they would have to buy seats and swallow the loss if they can't sell it but if the restaurant is popular enough, then it can still work in the scalper's favour.
Tock and Resy do this as either fully-prepaid, deposit, or card-on-file. The latter two only kick in for reservations canceling less than x hours in advance; policies vary the other.
Lots of places do this. At Birdsong you pay for your table and then if you’ve ordered the pairing with the tasting menu and nothing optional it’s a very “sit down, eat, visit the place, leave” experience. Honestly, makes the place feel luxury. Well, it is luxury and the food is great but it makes you feel royal.
> Yes, but it makes it all the more complicated because the scalper has to figure out how to process the rebate, which opens up all sorts of issues.
Not really. Restaurant charges 50 dollars for reservation, which gets added as credit at bill. Scalper pays the 50 dollars and charges customer 60 dollars for the reservation. Customer gets the 50 dollars from the restaurant. Scalper keeps the 10 dollars of profit. No rebate is needed for the scalper, they already took the customer money with the deposit included.
Now, for unsold reservations, yes, it helps by adding some risk to the scalper.
This doesn't seem like an unsolvable problem, they'd just have to bite one of a number of bullets to verify that the person who made the reservation is the person who showed up to the restaurant: restaurants insisting on strict identity verification for the reservation systems they use, or a rule that says the name on your credit card or driver's license must match the name of the person who made the reservation in order to be seated. People would naturally complain, but if the reservations are going for up to $300, I assume the restaurants have some leverage.
Or just go back to telephone reservations. If you hear the same voice calling over and over, you tell them there aren't any more reservations available. Imperfect, yes, but cheap.
they'd just have to bite one of a number of bullets to verify that the person who made the reservation is the person who showed up to the restaurant
Once someone shows up for a reservation, it's too late to really do anything about it. No restaurant is going to turn away money like that. Popular enough spots may have a line at the door, but you also don't want to risk a commotion turning away hungry people with money and some evidence of a reservation.
Plus, fine dining places like some of these are as much about the atmosphere and service as the meal. Being treated with such suspicion would put a bad taste in my mouth before my first bite of food...
I can see that argument. If it wrecks these reservation scammers, it'd be better in the long run. But maybe restaurants aren't in the position (or of the mindset) to play a game of chicken like that (chicken is no game at a restaurant...)
But in general, the restaurants which are most affected by this scheme are the ones who are likely in the best position to do something about it. They may lose some customers who bought fraudulent reservations, which seems like not much of a loss. They may also lose some people who get mad about being questioned. But, in the long run, I think they'd win more fans among people who couldn't go to the restaurant at all when all the reservations were scooped up by bots.
Exactly. It almost feels like a non problem. You only have this problem when your restaurant is in such high demand that it’s worthwhile to be targeted by bots. If your restaurant is in such high demand, you have several tools at your disposal and the wherewithal to police reservations much more than some other less in demand restaurant. But those less in demand restaurants will never have this problem in the first place. And like you said, if you’re that in demand, you can afford to lose a few customers
> . You only have this problem when your restaurant is in such high demand that it’s worthwhile to be targeted by bots.
Why wouldn't bots buy up every table in every restaurant everywhere no matter how busy they normally are? It costs basically nothing. That way you'll be forced to pay money to some app just to get a table anywhere. Restaurants that don't want to be exploited this way will have to either stop accepting reservations or spend a bunch of time and money fighting bots.
No incentive to do so? I can’t speak to the motivations or lack thereof, I can only say (as someone who eats out fairly frequently) that this is a non issue for all but the most in demand restaurants. In my metro area of 1.2 million I can count the restaurants that have had issues with this on one hand.
I worked at OpenTable and this was a problem we also encountered, and it was one of my own projects that was an attempt to combat this. This is one of those posts where I feel like I might actually be an expert but I also feel I can't really talk about specifics of projects for fomer employers :(
Instead of relying on these services like Resy, these places can go back to having to call for a reservation. I'm not a restaurant owner, so I'm sure what this tradeoff entails. You can also charge for a reservation, but not every place will be able to get away with that, as it will turn off legitimate diners, too.
Or just literally charge a deposit for the reservation. Restaurant owners are loathe to do this due to fear that it will drive away customers but if you are a restaurant where bots are a problem in the first place like the subject matter then you certainly have enough demand to justify doing so. The most in demand (eg Michelin star) restaurants already mostly do this
Not sure what that changes? Scalpers can very easily outsource making phone calls to some call center for pennies, while legitimate customers will now find it harder.
High end restaurants in my city and a few European cities I've been to recently required reservations with payment up front. At worst, the restaurant still gets the money if someone (like a bot account) no shows. This would be a pretty high risk endeavor to use a bot to reserve at these restaurants.
Maybe restaurants should go back to requiring reservations over the phone or in person. Or require an ID to match the name on the reservation.
I did a two week trip in the UK recently, and over the ~8 restaurants we ate at, 7 required credit card to reserve, with a specific fee that would be applied if no-show
Are there others like me, who never reserve a table at a restaurant?
I find it much more fun to meet friends at a restaurant without a reservation. Less obligation to follow through. If one of us has a last minute idea to do something else, we go with the flow. If none of the available tables are to our liking, we go with the flow and go elsewhere. If there is no available table, we go with the flow and go elsewhere. So much more serendipity and freedom.
One time, we arrived at a restaurant and were told that there is no available table. Since I just read in a book that you usually can bribe the waiter, I jumped over my shadow, said "Maybe we can wait a few minutes and see if something becomes available?" and put a €20 note into the hand of the waiter. Pointed at the best table at the window and said "That one would be perfect of course". 5 minutes later, we were sitting at the table at the window. I was a nerve wreck and felt like a king :)
There are types of restaurants where reservations are essentially, if not literally—mandatory. And maybe this doesn't appeal to you, but I can't imagine you'll have many chances to dine at a three Michelin star restaurant with this kind of approach.
When the first startup I founded took off, I tried some of the more expensive restaurants in my town. I kinda liked the experience. But after a short while, it tapered off and I do not get any more out of it than from visiting a €10/meal restaurant now. So I almost never go to fancy restaurants these days. There is nothing that draws me there.
Really curious to hear what those restaurants give you that a cheap restaurant does not.
I did it once. Went to Alinea in Chicago. $400/person before wine pairing to give you a gist of the scale. At that level the experience transcends the food. It's all-encompassing. You don't worry about the valet, the restaurant has that covered. You don't worry about your coats; they take them for you. You don't get a jacket ticket.
It almost feels like the servers have ESP. They get you a new napkin, or fork before you even raise your finger (but not after you thought about asking). The food is timed perfectly. Once everyone finishes the course, the next course comes. If there's a conversation about the previous course, the next one miraculously waits until that conversation dies down.
The food is ordered in a way to activate taste buds. It's not just from "lighter fare" to "heavier fare." Salty/sweet, temperature play, texture play; it's all on the table and masterfully executed. There's introspective dishes served in one course, and fun dishes (like candied balloons) in the next.
The food itself is nutrient-complete, so while the portions are ostensibly small, you leave satisfied, and each course builds the hype. There's never a dish that ends up making the last feel "smaller."
You can sit for as long as you want, then when the group decides it's time to leave, the restaurant already has your jackets ready, the car is ready, and everything is in it's right spot. There's no mix ups.
The crispness of the experience made me realize food can be more than just a meal, but ultimately it's hard to define without trying it.
Michelin stars mean that a restaurant has been vetted by presumed skilled experts.
This means that you're going to have on average a better experience, but that you'll pay more for the experience you get (since they're in more demand). Finding a restaurant of similar quality without the stars will take more digging, but will likely give you better value.
99% of people going to restaurants do not care about the ambience or over-the-top service.
I have absolutely had the experience of an inexpensive local seafood restaurant on Long Island making much better food than an upscale place in Manhattan, for example.
Just because it's upscale doesn't mean it's good, and just because it's cheap doesn't mean it's bad, but there is typically a very strong correlation.
In upscale places that are bad go out of business, unless their primary means of gathering business isn't food, but instead is location/proximity to a source of near captive audiences.
Especially with things like seafood and steak. Honestly, I can make a better steak than any restaurant at home. I can shuck oysters and have fun. And as you said, with seafood in particular, little places in good locations often have better food!
But the experience of the fancy restaurant has it's value as well.
>99% of people going to restaurants do not care about the ambience or over-the-top service.
99% of people might not think think the difference is worth it; but I just don't accept the idea that 99% of people wouldn't think that the service and ambiance at Per Se is better than Olive Garden.
Sure, McDonalds has sold like, a trillion hamburgers and a local started restaurant does like 100 covers a night. That doesn’t mean that they aren’t packed and that the reservations don’t go instantly, as soon as they’re available.
Just to adding on, when you get into Michelin star quality, the ingredients out of this world.
I'm not big into the show of it all, and I really enjoy cooking myself, but I can't even come close to the quality on a single dish they produced, much less the 5 - 10 small dishes you are typically presented. If you love food like I do, you'll generally love the food experience on presentation and taste alone. The head chefs are typically artists when it comes to this stuff, they spend a lot of time and effort coming up with both unique and enjoyable dishes. It is not catered in any way to mass production and speed of service like you see in the typical restaurant.
This said, if you don't enjoy food, or you don't enjoy special experiences you're not going to get much out of it.
I completely understand where you're coming from, and I agree that the appeal of fancy restaurants can wane over time. I've definitely been burned by the odd over-hyped spot or two. However, for me, a lot of these restaurants are like theater. They combine unique ingredients, creative preparations, exceptional service, and the chance to witness culinary professionals at the height of their profession. It's the immersive experience and the creativity behind the meal that keeps me drawn to them, even though I would probably prefer a cheaper, more familiar meal most nights.
Expensive restaurants, fancy restaurants, and 3-star Michelin restaurants are not the same things.
I've eaten at a few 3-star Michelin restaurants and the experience at each was worth living imho. 3-star means not only is the food world class, but the service is as well. I still remember fondly each thing I ate, and just as importantly, the interactions I had with the chefs throughout the evening.
It happens to be the case the excellent food and service does come at a price, so Michelin 3-star places tend to be expensive. Likewise people tend to dress up when they spend a lot so they tend to be "fancy", but those are things that happen as an artifact of the quality of experience they provide.
I've been to plenty of places that are expensive and very "meh", and I absolutely loathe "fancy" restaurants that pretend they are offering you some privileged experience (which is usually a laughable facsimile of the experience of real high-end dining).
I'll add that there are also diminishing returns: The experience of sitting at the counter of at Masa, with only two other couples why your personal chef hands you some of the best sushi in the world is incredible, but there are other omakase places in NYC that offer a nearly equally amazing experience (especially if you go on a quiet Tuesday night) for 1/3 the price, but I'm very glad I had that counter experience at Masa.
I always make a reservation, because it really sucks to show up and not be able to be seated in time to eat while still doing something else that evening.
There are a few restaurants in my city that don't take reservations at all. I've given up on going to them because the wait for a table is always at least an hour long, and you can't plan any other activities around it.
That doesn't fly as much as it used to. Our favorite places where I live mostly require a reservation; they literally stay pretty well booked. We know the owners (two joints, same ownership), and ONCE or TWICE we called him for help on a special occasion. Sometimes he can help. But that's not a card you want to play often (not in the least b/c, if you get a table because you're friends with the owner, my personal ethics dictate a fairly significant spend).
On the other hand, I feel like others are missing out on those moments where one of my friends calls and says "Hey I'm in this and that part of the city and I'm hungry. What do you do?". And I'm like "I'm sitting in a cafe in that other part, drinking coffee, tinkering on my laptop. How about we meet in 30 minutes in this and that restaurant?". And they are like "Deal. I also have my laptop with me. Have you seen the new OpenAI API? I just cobbled something together with it that I would like to show you.".
Most people seem too entangled in job and family for this.
Restaurants are great places of adventure where very different types of people come together. Please don't harm these oasis of diversity by telling people what to do :) It would make the world such a boring place.
I think visiting restaurants to meet with interesting people is one of the great joys in life. And when interesting people meet, there almost always comes up something to try out or look up online.
It feels we are so near to the singularity, that every moment is like a wild ride.
I meet people in restaurants a couple of days per week. Only once did a waiter complain about the laptop on the table. I just never went to that restaurant again.
I don’t think your experience is invalid, you are just missing out on other experiences that accomplish the same things you like about your disruptive laptop dependent approach for the sake of AI and machines when the humans have so much infrastructure catering exclusively to us… behind reservations
Nah, New York is a place where you generally don't need a reservation. If you want to go to a specific place, especially one you just read about, sure. If you just want dinner, it's hard to walk a few blocks in any direction without finding a restaurant with an open table though.
You're also discounting the many fine places, particularly downtown, that explicitly don't take reservations.
> Are there others like me, who never reserve a table at a restaurant?
Yeah, I don't really like needing a reservation or appointment for everything; for specific events like birthdays or graduations it's probably good to make one, though.
Most people are like you and me who would never even dream of going anywhere where a reservation is required. Those folks that do either have a hobby or too much time and money, which is equally rare and equally annoying
Personally, like the vast majority of us, I think anyone who calls in ahead to a restaurant is totally lame and most likely an NPC, but it does depend on where you are and the current culture around you
Most of the time I am meeting friends to hang-out and we will spontaneously find somewhere to eat. I really enjoy that.
Occasionally I am hanging out with friends from out-of-town, or friends with kids who don't get out as often. Then it's convenient to have somewhere booked so we don't end up having to eat at a not-so-great place and 'spoil' their visit, or their one evening seeing friends that month.
Sometimes I want to hang out with a big group. Try finding a place which can spontaneously accommodate twelve people.
* Real names on restaurant, just verify their ID. Then ban them from opentable/resy (might be harsh, but will disincentivize behavior)
* No transferring reservations, if rez is cancelled, hold the rez and release at a random time later
I know for ticketmaster, they have no incentive to put these guards up because they take a % cut for every resale, but for these apps; I think you can put some reasonable defenses, especially since most of the restaurants that face these issues have bills of a few hundred dollars anyway.
As other commenters have shared, there are big disincentives for restaurants to turn people away at the door - they don't get paid, and it is negative experience for both sides (with commensurate brand effects).
Bulk-generating accounts -- email addresses, phone numbers and even credit card numbers -- is a solved problem for resellers.
In New York State, it is illegal to restrict transfer of tickets. Expect the same for reservations as this battle advances.
It sucks being able to not resell a ticket when plans change, but I'd assume that these days, the convenience of being able to do that is more than offset by the amount lost to scalpers.
Yes. Either through simply carrying many cards (see the binders of credit cards in documentaries on ticket resellers) or getting many numbers issued against a single account by a friendly bank. These were popular in the 00's and 10's. I expect both techniques are no longer state-of-the-art.
From your friends in event ticketing: welcome to the struggle, and we're sorry.
I hope Resy figures this out, and I hope we're able to learn from (or license) their solution.
I expect their approach will look similar to our path: fight the secondary market with every legal tool, work with them when you can't, improve pricing algorithms to reduce arbitrage opportunity.
Customers on both sides of their market will probably be frustrated with each effort. They want to cook and eat, not "be in a marketplace". They will probably blame Resy.
The secondary market will probably engage legislative resources, attempting to tailor the law to protect their practices. They will probably do this "in the interest of diners". It will probably become illegal to restrict transfer of reservations, among other things.
Good luck y'all. Reach out if you need support. Love, Broadway
The ticketing industry could completely stop reselling if they wanted to. Require the person who purchases the tickets to be the person who uses the ticket. No transferring, no reselling. But companies would lose out on all that sweet scalper cash, plus they would have to have a virtually unlimited refund policy to deal with legitimately unneeded tickets. I always figured that one-two punch of revenue loss is what prevents ticketing companies from saving us from this hell they've created.
But then again, e.g. in New York, it's apparently also illegal to resell a ticket for more than 10% above its face value, yet ticket scalping does not seem to be a solved problem...
The first-sale doctrine says the ticket industry could not, in fact, stop reselling.
That said, your plan is one ticket per identified person, that you can't buy 4 tickets at a time for you and your friends? Not sure that'll fly, even with people who hate Ticketmaster.
I remember a popular restaurant in NYC in the late 2000's had a "in person request for reservation only" policy.
The thought was that if you lived in the neighborhood, you would walk down to the restaurant around 4pm, make your reservation, go home and then come back for dinner.
In practice, this meant that if you wanted a spontaneous "let's go eat there" type of evening and you didn't live in the neighborhood, you wouldn't be eating dinner till after midnight.
Before the escalation of the Russian-Ukranian war in 2022, the Moscow and St.Petersburg restaurant scene was quite vibrant. Some places were challenging to book, etc. These were their ideas for making reservations still accessible:
+ Accept reservations by phone or in person only and ask for the patron's phone number. Then call back 1 hour before to confirm the reservation.
+ Make the most popular times non-bookable. You have to come in person and check how many guests are in a queue and how long you should wait for the table. Some people are okay to wait at the bar, others will head to less busy places.
+++ Open a spin-off of a popular place, and redirect the clients' stream there.
Wait, is this even legal? I made a bot one time for a group of people I know to go to Noma. They invited me to come with them out of gratitude. They told me I could resell that. Other than personally finding it unethical, I also thought it'd be illegal to do so.
In any case, writing such a bot for a one time use-case (and just one reservation of which I was a part of) was fun!
I want to say that you can easily solve the problem by requiring a phone call, but with audio deepfakes, that might actually be really easy to circumvent with automated chatbots.
I predict the enshittification of restaurant dining.
My hunch is that turning restaurant reservations into a speculative bidding market will not make it better for restaurants on average, but will just extract value while making the business more volatile, and also less pleasant for the average customer.
I tried to google the title in firefox focus as I sometimes do to get around the paywall and found a weird youtube video of someone sleepily reading the article:
