7 ms·

Is the restaurant industry in need of saving, from a restaurant owner's or diner's perspective? I'm fully on the "tipping is terrible for everyone involved" si

by ahoy 10y ago

Is the restaurant industry in need of saving, from a restaurant owner's or diner's perspective? I'm fully on the "tipping is terrible for everyone involved" side, but I wonder if the framing here is based on anything.

stingraycharles 10y ago
There's a great Freakonomics podcast about this subject: https://itunes.apple.com/nl/podcast/freakonomics-radio/id354668519?l=en&mt=2&i=1000378216941 https://itunes.apple.com/nl/podcast/freakonomics-radio/id354... The bottom line is that from the perspective of the diner, it will not really matter (quality remains equal), but from the perspective of the restaurant, things will get a lot better.
- smhg 10y ago
  2 actually. Also available outside iTunes: http://freakonomics.com/podcast/should-tipping-be-banned-a-new-freakonomics-radio-podcast/ http://freakonomics.com/podcast/should-tipping-be-banned-a-n... http://freakonomics.com/podcast/danny-meyer/ http://freakonomics.com/podcast/danny-meyer/
colechristensen 10y ago
It certainly seems like it should be more efficient for 100 people to eat dinner in a restaurant than for 40 people to cook 100 meals. (100 / average household size (~2.5) = ~40) And yet it's considerably more expensive. Because, it seems, a considerable amount of the cost of restaurant food goes to the overhead costs of the real-estate owners and the financial system. This is both directly and indirectly (the cost of the rent or financing of the restaurant space + the portion of employee wages that go to renting their homes + the cost of everything the employees purchase going towards rent etc.) In other words it seems a disproportional amount of our economy goes towards people that own instead of people that do. How do you solve that though? Increase rent-seeking taxes (interest, rentals, etc) and lower income taxes? (basically lowering significantly the benefits from buying things you don't use yourself)
- randomdata 10y ago
  > And yet it's considerably more expensive. Even after you've included all of your costs? It's easy to say the raw food ingredients are considerably less expensive, but that's only a small part of the story. There is a cost of having a kitchen (tools and space in the home), utility costs, not to mention your time. Maybe a high end specialty restaurant that is selling an experience, but I'd be surprised if you could actually compete with a place like McDonalds on cost.
  - ktRolster 10y ago
    Maybe a high end specialty restaurant that is selling an experience, but I'd be surprised if you could actually compete with a place like McDonalds on cost. Fries and a hamburger are about the easiest thing to make, requiring no special equipment. The ingredients are a lot cheaper than buying at McDonald's, too. If you have more than one person eating, then the cost savings can really add up.
    - randomdata 10y ago
      > Fries and a hamburger are about the easiest thing to make, requiring no special equipment. For all practical purposes of modern urban life, you at least need some kind of specialized heating apparatus. More importantly, somewhere to store that apparatus. Which is quite often a kitchen. In San Francisco, the median housing cost per square foot is almost $1,000. A small kitchen is defined as 70 square feet, or $70,000. If we assume a rate of 3%, the opportunity cost of that kitchen is almost $6 per day, or $2 per meal if we assume three meals per day. That brings the cost of an $8 McDonalds meal down to about $6 right there. Then there is your time. San Francisco has officially declared that your time is worth at least $13/hr. At that rate you have just 28 minutes before you've already used up that $6. That includes gathering the ingredients, prepping the food, cooking the food, and cleaning up afterwards. That does not leave a lot of room for error, even for something as simple as burgers and fries. It does indeed get better with scale, but I have also left off a number of other costs, including the cost of the food itself. For a single person (in SF) it is no contest without even getting into other costs. Of course, there is something to be said about the food you can create yourself, versus eating at Mcdonalds every meal. Cost isn't everything.

by ahoy 10y ago

stingraycharles 10y ago

There's a great Freakonomics podcast about this subject: https://itunes.apple.com/nl/podcast/freakonomics-radio/id354668519?l=en&mt=2&i=1000378216941 https://itunes.apple.com/nl/podcast/freakonomics-radio/id354... The bottom line is that from the perspective of the diner, it will not really matter (quality remains equal), but from the perspective of the restaurant, things will get a lot better.

smhg 10y ago
2 actually. Also available outside iTunes: http://freakonomics.com/podcast/should-tipping-be-banned-a-new-freakonomics-radio-podcast/ http://freakonomics.com/podcast/should-tipping-be-banned-a-n... http://freakonomics.com/podcast/danny-meyer/ http://freakonomics.com/podcast/danny-meyer/

colechristensen 10y ago

It certainly seems like it should be more efficient for 100 people to eat dinner in a restaurant than for 40 people to cook 100 meals. (100 / average household size (~2.5) = ~40) And yet it's considerably more expensive. Because, it seems, a considerable amount of the cost of restaurant food goes to the overhead costs of the real-estate owners and the financial system. This is both directly and indirectly (the cost of the rent or financing of the restaurant space + the portion of employee wages that go to renting their homes + the cost of everything the employees purchase going towards rent etc.) In other words it seems a disproportional amount of our economy goes towards people that own instead of people that do. How do you solve that though? Increase rent-seeking taxes (interest, rentals, etc) and lower income taxes? (basically lowering significantly the benefits from buying things you don't use yourself)

randomdata 10y ago
> And yet it's considerably more expensive. Even after you've included all of your costs? It's easy to say the raw food ingredients are considerably less expensive, but that's only a small part of the story. There is a cost of having a kitchen (tools and space in the home), utility costs, not to mention your time. Maybe a high end specialty restaurant that is selling an experience, but I'd be surprised if you could actually compete with a place like McDonalds on cost.
- ktRolster 10y ago
  Maybe a high end specialty restaurant that is selling an experience, but I'd be surprised if you could actually compete with a place like McDonalds on cost. Fries and a hamburger are about the easiest thing to make, requiring no special equipment. The ingredients are a lot cheaper than buying at McDonald's, too. If you have more than one person eating, then the cost savings can really add up.
  - randomdata 10y ago
    > Fries and a hamburger are about the easiest thing to make, requiring no special equipment. For all practical purposes of modern urban life, you at least need some kind of specialized heating apparatus. More importantly, somewhere to store that apparatus. Which is quite often a kitchen. In San Francisco, the median housing cost per square foot is almost $1,000. A small kitchen is defined as 70 square feet, or $70,000. If we assume a rate of 3%, the opportunity cost of that kitchen is almost $6 per day, or $2 per meal if we assume three meals per day. That brings the cost of an $8 McDonalds meal down to about $6 right there. Then there is your time. San Francisco has officially declared that your time is worth at least $13/hr. At that rate you have just 28 minutes before you've already used up that $6. That includes gathering the ingredients, prepping the food, cooking the food, and cleaning up afterwards. That does not leave a lot of room for error, even for something as simple as burgers and fries. It does indeed get better with scale, but I have also left off a number of other costs, including the cost of the food itself. For a single person (in SF) it is no contest without even getting into other costs. Of course, there is something to be said about the food you can create yourself, versus eating at Mcdonalds every meal. Cost isn't everything.