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."
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.)