Shake Shack Launches Order Kiosks To Eliminate Minimum Wage Workers

Fast food workers who enthusiastically joined the "fight for $15" are about to get the latest lesson in life's numerous ironies: Shake Shack has become the latest fast food purveyor to launch with order kiosks, which the company said will help it minimize its "largest P&L headwind": People.

In an investor presentation released Wednesday, Shake Shack touted its first "cashless shack" - located at the company's Astor Place location - which opened in New York back in October. As we pointed out last year, self-order kiosks have already become a staple at thousands of McDonald's restaurants, and Shake Shack is rapidly catching up. As a result, the company says it has been testing the sleek-looking kiosks at six restaurants.

Shack


And here things got confusing: people are Shake Shack's "most valuable asset" - the crucial component to the company's theory of "enlightened hospitality," it said in its presentation. And yet, by "valuable" it turns out the company actually meant "expensive" thanks to to rising rising cost of unskilled labor - thanks to movements like the fight for $15, which has pushed several large US cities to raise the municipal minimum wage, in some cases all the way to $15.

"People are our most valuable asset...and our largest P&L headwind for the foreseeable future."

What's worse for workers, the kiosks aren't the company's only experiment with integrating more high-tech solutions to make minimum wage employees redundant: Shake Shack launched an iOS mobile app last year, which has been incredibly successful, according to the company. Orders placed on the app typically generate 15% more revenue. Because of this, the company is planning to expand its ability to "connect directly with guests" by adopting more desktop and mobile-based ordering options.

Translation: making human workers even more obsolete.

Fight

Of course, kiosks won't entirely eliminate restaurant staff: Shake Shack will still employ "hospitality" workers who will hang out in the dining area and make sure everything is okay with customers' food. At least until it finds the right robots to replace them too...

Kiosk

The good news: for now Shake Shack will continue paying its employees in New York City $15 an hour - $4 more than NYC's minimum wage. Just don't plan on being employed there too long.

And what assures that the company will continue its robotization is the market's reaction to its efforts: the company's stock price has persistently moved higher, beating most of its rivals.

Insiders

Here is the kiosk in operation.


And while Shake Shack values its commitment to providing employees with a "livable" wage...

Shake

...we imagine it will be more difficult to "live" when you've just lost your job to a robot.

Read the full investor presentation below:

 

Comments

TeethVillage88s tbone654 Wed, 06/13/2018 - 17:03 Permalink

- In Spanish Civil War there were many Nationalities who were put in French Concentration Camps, American, German, whatever

- In Germany prior to WWII there were horrific actions by both Nazi and Communists, many were killed by Stalin, many interned by French or Germans, 1/4 of population of France was Refugees before WWII and ended up hated by French, interned by French, the greatest ideas of the 20th Century:Communism; Fascism led to many imprisoned, many deaths, much disease, much misery.... could be like today?

- Robots, Drones, don't change the Inhumanity to Man By Man

In reply to by tbone654

techpriest DisorderlyConduct Wed, 06/13/2018 - 17:54 Permalink

IIRC 95% of people have a job that is above minimum wage. Median (50%) household, IIRC, is $45k, which nowadays means you get a trailer or "tiny house," for sub-100k, pay it off fast, and then start saving aggressively and finding whatever means you can to keep upping your income.

I've known of exactly one person who was consistently unable to get above a $10 per hour job, and that really was no one's fault but his own. What I see much more of are guys in their 20s (sometimes early 30s) who haven't figured it all out, are mad because they aren't sure how to get ahead, but when they figure it out they drop the socialism. I'd hate to say it, but I was in that category for a few years.

In reply to by DisorderlyConduct

OneSilverDollar peopledontwanttruth Wed, 06/13/2018 - 17:10 Permalink

Well, corporations will have to fix this. For now, the level of automation is still very low compared to expectations.

Big companies are not going bankrupt in large scale because a large part of population cannot afford goods.

On one side, demography, birth rate is low, and it is not anymore limited to developed countries. The population is becoming older (deflation, and money velocity down)

On the other side, rising automation, and work less dependent on people.

In the QE experiment, money was supposed to flow top-down (nobody believed it). Of course, it didn´t go down, big companies are interested in productivity (produce more with less workers) and financial investments. And rich people, with serious money, don´t exactly need or want to spend more.

There will be another experiment to avoid social unrest, companies without customers, and to increase money velocity:

it will be helicopter money (a bottom-up flow).

I don´t think it´s possible to give work to everybody anymore, or to give people increasingly complex tasks to do.

What can we expect from helicopter money?  People will probably vote for socialists, to increase their income.

Hedge accordingly.

Anybody here seeing another outcome?

 

 

In reply to by peopledontwanttruth

Never One Roach TheSilentMajority Wed, 06/13/2018 - 15:35 Permalink

Starbutts will teach their robots to clean the blood splatter off the bathroom walls and clean the sh*t off the toilet seats and that Baby Ruth looking lugie off the floor.

I hope the robot washes its hands before whipping up my $8.86 skim milk mochachino frappe with non-fat cream whip and zero calorie sprinkles on top.

I hate tasting that "brown stuff" that looks like Baby Ruth on the lid.

In reply to by TheSilentMajority

Deep Snorkeler Wed, 06/13/2018 - 15:19 Permalink

Robotization of America

  • the corporate tax cut will speed up the robotization of jobs
  • soft robots are squishing and bendable and can contort into tiny spaces
  • robot abuse is the new crime
  • the wealthy owners will receive government payouts for idle robots
  • many will be kidnapped by sex robots
  • never trust robots
Endgame Napoleon yrat Wed, 06/13/2018 - 16:00 Permalink

Minimum wage jobs at part-time hours have a symbiotic relationship with the welfare-boosted workers who hold many of those jobs. If they work part time for minimum wage, staying below the income limits, they get free EBT food, free rent, monthly cash assistance, nearly free daycare to accommodate part-time work and up to $6,431 in child tax credits, assuming they are womb productive. Many of them are legal / illegal immigrants in single-earner households with US-born kids. The robots have taken over, so we should see a significant reduction in the welfare rolls.  

In reply to by yrat