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Ice cream machine hackers sue McDonald's
- iamed2 5y agoI'm interested in the shift in terminology. Previous coverage has referred to them as a software company or device manufacturer, but this round is referring to them as "hackers", which seems like a framing McDonald's would benefit from in lawsuit proceedings.
- maerF0x0 5y agoI cant think of anything more definitionally anti-competitive than keeping mcflurry machines available so you can crush any DQ that pops up in your vicinity by fixing it ("oh whoops... it was unplugged!"), and then also crushing a business that aims to solve your problem to help serve customers better. Let's get the FTC on this, afaik it's illegal to advertise a product you have no intention of actually serving. eg: used car dealers used to do this with an "amazing deal car", which often never existed. People would come down and get enticed to a diff model at a high price. edit: The "whoops it's unplugged" was a joke about absurd root causes, but also intended to imply equivalently poor attempts to keep the machine working. That is I do not think they literally did not plug it in, but I do think they are not trying very hard to keep the machine up and running. Other threads point out that the real root may actually be that the original creator of the machines made a complex/crap machine and the cost of technicians makes it unprofitable to bother
- jaywalk 5y agoAnd now that car dealer ads have to specify the exact car they're referring to (by VIN or stock number), that one car will often be the only one the amazing deal applies to and once it's gone, so is the deal. At least somebody can actually get that deal now, so it's better I guess.
- mandelbrotwurst 5y agoIt's additionally better because you now have the option to call and ask "Is the car from the ad still available and will you hold it for me until I arrive?"
- dragonwriter 5y ago> And now that car dealer ads have to specify the exact car they're referring to (by VIN or stock number), that one car will often be the only one the amazing deal applies to and once it's gone, so is the deal. Sure, if its just one they have to identify it and say something like “1 at this price” but that also tells you up front what the deal is.
- raldi 5y agoI don’t understand your opening sentence. Why would they keep it unplugged?
- bena 5y agoThe gist I'm getting is that McDonald's doesn't want to be in the ice cream/soft serve business. But it also doesn't want more competition than it already has. So every McDonald's has an ice cream machine as a more sort of "break glass in case of emergency" situation. Or in this case "in case of DQ". But if there is no DQ in the area, why operate the machine? Just have it be "broken". It's not like people have an option they didn't have before.
- jacobr1 5y agoI think it is less a matter of intent and more a matter of incentives. McDonald's is probably perfectly happy to be selling more ice-cream and make money that way. But they just don't care about maintenance (franchise reasonability) and it isn't impacting the bottom line significantly, so nobody really wants to fix the contracts and/or vendor performance issues. If there was a better competitor out there, McDonalds might use them, but they just don't care enough (meaning aren't incentivized enough) at the corporate level.
- cactus2093 5y ago> But if there is no DQ in the area, why operate the machine? Why operate the grill or fryer? To sell food and make money. Instead of selling someone a meal for $7 McDonalds can sell them a meal + a mcflurry for $10. Why wouldn't they want to do this? It doesn't make any sense that a bunch of franchise owners are all in together on some kind of ice cream conspiracy. Surely the truth is less interesting, it's most likely just a boring cost/benefit analysis. There seems to be some flaw with the machines they use that make them particularly prone to breaking down and difficult to maintain. So some stores that don't sell a lot of ice cream anyway decide it's not worth the cost of keeping them running, while other stores that sell more do keep them running. And surely it's no coincidence that the markets where people buy more ice cream are also where Dairy Queen stores are more likely to open up.
- hammock 5y agoI read the article and DQ wasn't mentioned. What are you getting at?
- penjelly 5y agoparents point is that operating the machines regularly is of no interest to mcdonalds (likely bad margins) and its only interested in ensuring other niche fast food restos dont start to take up market share instead. ie: if i want icecream i can get it at macdonalds, instead if DQ, unless the machines are broken. if DQ gains significant market share they "fix" the machines and DQ loses its market share. not saying this is fact. just fleshing out parents
- hammock 5y agoWhere is the evidence of such a strategy though, besides the fact that machines are always broken? Even the franchisees would rather have a working machine.
- bena 5y agoThere is none, but "broken McDonald's ice cream machine" is a whole category of meme. So people start wondering my McDonald's is so plagued by machines that seem to only work on the third Thursday following the fifth month after the Lunar eclipse. But it's likely a combination of disinterested staff and machines that require more involved maintenance. Not to mention, there's several points of failure. Not only can various parts of the machine break; the drum that spins the mix, the compressor to keep the mix cold, leaks in various hoses and lines, but you can simply run out of mix.
- cinntaile 5y agoDQ is Dairy Queen. For anyone else that is confused.
- deleted 5y ago[deleted]
- adolph 5y agoI'm thinking how awesome the snicker blizzard is. I'm also thinking about how McDonald's anticompetitive behavior may have an unintended anti-obesity effect. Again, I'm thinking how awesome the snicker blizzard is.
- skeeter2020 5y agoTHis "theory" doesn't make any sense. It's the Franchisee who doesn't get the sales AND pays the huge cost for an official repair rep to come out and basically restart the cleaning cycle. This doesn't jive with crushing an upstart DQ; they're only really competitors in that they both sell "fast food". Ice cream @ a McD is a loss-leader (soft serve) or minor line item (McFlurrys) while it is the core product of DQ, despite their hot food offerrings.
- notreallyserio 5y ago> Ice cream @ a McD is a loss-leader (soft serve) or minor line item (McFlurrys) while it is the core product of DQ, despite their hot food offerrings. IMO this is actually the point being made. There's no need to run a loss leader if the competition doesn't exist.
- gruez 5y ago1. if it's a loss leader that they don't want to continue, why not just... stop offering it? After all, you see "participating restaurant" disclaimers everywhere. Why can't a particular franchise just choose not to participate if it's not in DQ territory? 2. Regardless of whether it's a loss leader, I doubt the marginal cost of the ice cream is more than the $1 or whatever the discounted price is. They paid for the expensive ice cream machine and the counter space. They might as well use it.
- notreallyserio 5y agoAs the theory goes, they want to stop DQ from moving in more than they want to recover the counter space used by the offline ice cream machine.
- hackernewds 5y agobecause customers drive in to purchase the loss leader, and even when unavailable will purchase alternate items
- hackernewds 5y ago
- rkagerer 5y agoI hope this case compels evidence into public light around any shady business practices that were taking place.
- 0des 5y agoDon't light your grill in someone else's lawn and expect your party keep on forever.
- billbrown 5y agoIf you are a two-person startup, the last thing you should be doing in the face of a market disruption is protracted litigation. Pivot, just pivot.
- jmull 5y agoI think this is the pivot.
- adolph 5y agoIf patent troll doesn't work do legal concern trolling as a public interest research group serving suits.
- dahart 5y agoPivot to what? Their product is focused on a specific niche market with a specific niche problem, and the entire market is being closed. Why not take a moon-shot stab at fighting for it, when the sentiment for people stuck with these machines seems to be wildly in their favor? From my armchair it seems plausible there could be a legal outcome in Kytch’s favor because the sale and lack of adequate maintenance of these machines may be bordering on illegal.
- Kwastie 5y agoThis great (mini) YouTube documentary gives some background what lead up to the lawsuit. (https://www.youtube.com/watch?v=SrDEtSlqJC4 https://www.youtube.com/watch?v=SrDEtSlqJC4)
- atlantas 5y agoSeconded. That is excellent piece of work; some of the best journalism I've seen in years.
- w-m 5y agoThe video makes some good points, but overall it’s very repetitive. Just count how many times the shot of the manual with “call a service technician” is used, always with similar narration, or the one of the finances of the company who make 25% of their revenue with parts and service. This could have easily been a 5 minute video. Also, it does not offer any explanation why McDonalds is the only customer of the Taylor brand machines with this issue. Burger King is also “an old company”, why doesn’t it apply to them?
- ziml77 5y agoMcDonald's machines are custom manufactured for them by Taylor. It's not surprising that other places don't have the same issues.
- daenz 5y agoThat gives a huge amount of context, thanks! Here's where Kytch is mentioned specifically https://youtu.be/SrDEtSlqJC4?t=1379 https://youtu.be/SrDEtSlqJC4?t=1379
- JohnWhigham 5y agoDespite how fucking shitty YouTube has gotten, it's content like this that could never be available anywhere else on the Internet today for free.
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- daenz 5y agoKytch built a device that gave the ice cream machines remote debugging. They sold them to franchises. McDonalds got weird about this and told franchises that they weren't safe, and that they've got a new ice cream machines that already has that feature. Then McDonalds reached out to other companies and said not to use the startup's device. The startup wants $900M because "that's what we would've been worth" if McDonalds hadn't scared everybody off. It sounds like Kytch wants to be a legal thorn in McDonald's side until they are paid off. How can a startup afford this? Do they work out some agreement with lawyers to only pay when they win?
- gorkish 5y ago> How can a startup afford this? Do they work out some agreement with lawyers to only pay when they win? On a case like this it's probably even more sophisticated than that; they probably ran a process where many law firms pitched to represent them and competed on their contingency fees.
- bombcar 5y agoYep, lawyers can take cases on either for a small fee + percentage of any settlement, or even just entirely on the chance of a win. The hope is to threaten McDonalds for a billion dollars (pinky) and get a settlement for a few million out of court and wrap things up quietly. Happens more often than you'd like.
- malka 5y ago> Then McDonalds reached out to other companies and said not to use the startup's device. Seems justified to me though. Maybe not legally, but I would too be motivated to annoy McDonalds in their situation.
- daenz 5y ago>Kytch has argued that Taylor was incentivized to keep its machines broken; repair and maintenance contracts across its business lines accounted for a quarter of the company's revenue stream in 2018, according to a document Taylor published at the time. But Kytch cofounders Nelson and O'Sullivan admit that doesn't explain why McDonald's would similarly seek to prevent a fix for its embarrassing—and expensive—ice cream machine failure rates. This is strange. Another comment mentioned how the existence of these broken ice-cream machines is anti-competitive towards businesses like Dairy Queen. Does this explain why the machines are always broken? Taylor gets repair contracts that are worth less than the business McDonalds would lose to Dairy Queen?
- danaris 5y agoI thought—and this is just a vague offhand recollection—that I had heard that Taylor provided some form of kickback to McDonald's for the lucrative contract.
- sircastor 5y agoI think the critical relationship here to understand is that it's 3 parties: McDonald's corporation, A McDonald's Franchisee, and Taylor. MCD Corp dictates franchisees must use this machine, which is very unforgiving in it's offline modes the machine may only be fixed by Taylor. McDonald's isn't losing the business, the franchisee is, and they are supposedly getting a kickback of some sort from Taylor. The party that gets the short end of the stick is the Franchisee.
- daenz 5y agoIf a kickback exists, that makes sense. But wouldn't the kickback have to be quite high to be worth the risk that McDonalds is opening themselves up to? I haven't looked at the Taylor financials, but the service contracts are supposedly 25% of their business, so a kickback is some % of that... but I'm having trouble seeing how it is worth the risk to McDonalds. Which is why I think it has more to do with competition, and that there is no kickback. In that scenario, the incentive to McDonalds is that they can have more franchises that are successful, which means more money flowing back into the corporation. I imagine this gain would be higher than any kickback they could receive from Taylor. EDIT>> I just realized that the competition scenario might not make any sense. Taylor wants service contracts. McDonalds wants the ability to make ice cream, and ideally have the machines work. The only way McDonalds is incentivized to not have the machines work is if there is either some leverage that Taylor has over McDonalds or if there is a kickback.
- helsinkiandrew 5y agoThis video exploring the issue came up a few months ago: https://news.ycombinator.com/item?id=26936774 https://news.ycombinator.com/item?id=26936774 And of course the McBroken website: https://mcbroken.com/ https://mcbroken.com/ https://news.ycombinator.com/item?id=24861623 https://news.ycombinator.com/item?id=24861623
- tfvlrue 5y agoI've been following this story for a while. When people say the soft serve machine is "broken", they really mean "unavailable to serve ice cream to customers". That could mean something as innocuous as performing a pasteurization cycle during the day (because it failed to run at night for some reason, perhaps the machine's clock is set wrong). It could also mean there is a physical problem with some part of the machine. The word "broken" implies the latter, but I'm pretty sure the former situation is far more common. In other words, the machine has determined it's unsafe to serve the contents (because soft serve needs to be pasteurized at certain intervals), not that it's physically incapable of doing so. Therefore it's "broken". (Disclaimer: I've never used one of these soft serve machines, just read through manuals and stories about them.)
- runnerup 5y agoAlso it can mean that the first half of the lunch rush used up all the frozen ice cream and it can’t freeze new ice cream instantly. So the later part of a rush period will often have unacceptable soft ice cream. When I ran frozen daiquiri machines it took a lot of finesse to make it through a busy night. Have to constantly manage the temperatures and levels to a nearly absurd precision while doing the rest of your job as well. But the only parameters you can manipulate are material input and material output, there’s no “freeze it faster” button or “store it colder” dial.
- BenjiWiebe 5y agoAre you sure that's ever an issue with McDonald's? I've been under the impression that McDonald's Taylor ice cream machines are freeze-on-demand.
- runnerup 5y agoIf that were the case I would never get soggy/wet/melted McFlurries, but I do sometimes.
- mod 5y agoHonestly, in my area they usually say the machine is "down." It's always down.
- m0llusk 5y agoMacdonald's wants to own the machines and owning maintenance is part of that. They do roughly the same thing with McCafe machines that arguably compete with Starbucks and others. The most likely explanation is that these ice cream machines have turned out to have serious reliability problems that have so far not been addressed.
- cletus 5y agoI really don't understand how McDonald's board and leadership has let this situation happen and continue. These ice cream machines are the printer cartridges of McDonald's. Pointless DRM and obfuscation designed to maximize authorized call outs (with associated costs). Now you can argue taht McDonalds gets a cut of that (which may or may not be true; I just don't know) but all of this comes at the cost of customer experience and brand perception, which are two things McDonald's very much does care about. That's why I'm surprised they've let this go on for so long. I really have trouble believing the board is unaware of this issue and have chosen not to resolve it.
- throwawayboise 5y agoYeah I don't get it either, for the same reasons. All I can think of is... I worked for McDonalds back in the 1980s. They had soft serve and milkshake machines then, but they were simpler. They almost never broke down. I do not recall any breakdowns in fact. The machines did not have an automatic pasturization/sanitize cycle. They had to be taken apart, cleaned and sanitized every night after closing, and then put back together the next morning. That took an extra person on the closing staff just to clean the machines, and another person the next morning to set them back up. Roughly two hours of labor a day, every day, to do those tasks. An experienced person could do it faster, but that's a ballpark. So McDonald's was betting on the labor savings offsetting the costs of the newer, more complicated and less reliable machines. Overall that may be working out on paper, but the perception of soft-serve being "always broken" is something I am surprised that McDonald's tolerates.
- Topgamer7 5y agoThe pessimist in me says someone who sits on the board has a stake in the ice cream machine company, and they make bank on the crazy service fees for each tech they send out to "fix" the machines.
- tomrod 5y agoOdd that Dairy Queen never seems to have the same issues that McDonalds has.
- throwawayboise 5y agoThe machines at Dairy Queen are (mostly) not Taylor machines. They also don't have the pasturization function, they must be cleaned and sanitized manually.
- paulmd 5y agofrom the sounds of the rest of the discussion - ice cream is a core enough part of DQ's business that they just have a normal machine that does it, where McDonald's uses a whiz-bang machine that can freeze the ice cream on-demand. So the McDonald's machine never has waste if they don't sell ice cream all night, but it also is a maintenance nightmare.
- RcouF1uZ4gsC 5y agoI am actually on McDonalds’ side in this. Many of the startups have made a lot of their money by arbitraging regulation and safety (see Uber , AirBnB, Tesla self driving). McDonalds is a company that literally serves billions of people. If there is any food borne illness, it can literally kill people and it will be front page news all over. As such, McDonalds keeps a very tight lid on what franchisees are allowed to do. Installing an unauthorized addition to a very safety critical equipment (soft serve can easily harbor very nasty bacteria) which potentially enables people to do unauthorized diagnosis and work on machines they may or may not understand is a recipe for disaster at McDonalds’ scale. Is this a cool device? Yes. Should you install a hack on something that can make thousands of people very sick? Probably not.
- StillBored 5y agoI think the core of the problem was less food safety failures and more "user error" reasons. Then instead of saying "there is to much milk in the hopper remove some, and restart", or providing an error code lookup they just flash "error call your technician". This device just told the user what was actually wrong with the machine so they could choose to correct it, or call the technician to actually repair it. I don't think there was any indication that the franchises were tearing the machines apart to replace broken parts. Simply providing a please manually discard product, clean and restart machine due to pasteurization failure code and procedure would have probably avoided the whole fiasco. Which from the sounds of it, is basically what the "improved" machines do, they aren't improved in any way except to report the failures to the user, and provide appropriate user level remedies.
- secabeen 5y agoYeah, the other element is that successful operation is dependent on a complex process that happens overnight, takes multiple hours, and cannot be bypassed (for legitimate safety reasons). The hacker device deciphers the error messages and also provides notifications to the owner during these processes. Thus, if the system runs into a common issue at 11pm, early in the cleaning, the issue can be addressed immediately, and the cleaning re-started. Without the hacker device, the problem is often not discovered until much later, by which time it's too late to complete the cleaning process by lunch; or, even worse, the extended delay means that a technician needs to be called to reset/clean the machine, adding more delays.
- karaterobot 5y agoHuh. I guess I'd be surprised if McDonald's franchise license didn't allow them to just say "stop using Kytch, because we said so". So, why do anything more than that, as is alleged? Is it just that Kytch is mainly suing for discovery and/or settlement rather than because they think they'll win?
- dikaio 5y agoSo in other words, friends of the McDonald Corporations majority owners (Taylor) saw a chance to steal a companies IP and use it for themselves to better their own products and McDonalds helped them do it. Sounds like business as usually.
- seanw444 5y agoI can't remember the last time I went to a McDonald's and they didn't tell me "sorry, our ice cream machine isn't working right now."
- LatteLazy 5y agoI always assumed the margins on ice cream were very very thin and that was why the machines were so often broken: people come for the promise of ice cream, they buy a burger and fries anyway, so who cares if they actually get the ice cream... What a messy story...
- dang 5y agoRelated: New emails released in the McDonald’s ice cream machine lawsuit - https://news.ycombinator.com/item?id=29325507 https://news.ycombinator.com/item?id=29325507 - Nov 2021 (138 comments) McDonald’s unreliable ice cream machines reportedly under FTC investigation - https://news.ycombinator.com/item?id=28407525 https://news.ycombinator.com/item?id=28407525 - Sept 2021 (41 comments) The Feds Want to Know What the McFuck Is Going on with the McFlurry Machines - https://news.ycombinator.com/item?id=28386567 https://news.ycombinator.com/item?id=28386567 - Sept 2021 (151 comments) The McFlurry Machine Company Just Got Hit with a McRestraining Order - https://news.ycombinator.com/item?id=28119447 https://news.ycombinator.com/item?id=28119447 - Aug 2021 (3 comments) Why the McFlurry machine company just got hit with a restraining order - https://news.ycombinator.com/item?id=28117164 https://news.ycombinator.com/item?id=28117164 - Aug 2021 (67 comments) Investigating why McDonald's ice cream machines are often broken [video] - https://news.ycombinator.com/item?id=26936774 https://news.ycombinator.com/item?id=26936774 - April 2021 (234 comments) The Reason McDonalds Ice Cream Machines Are Always Broken - https://news.ycombinator.com/item?id=26932344 https://news.ycombinator.com/item?id=26932344 - April 2021 (3 comments) ArsTechnica has retracted the story about McDonald's Icecream - https://news.ycombinator.com/item?id=26918415 https://news.ycombinator.com/item?id=26918415 - April 2021 (8 comments) They Hacked McDonald’s Ice Cream Machines–and Started a Cold War - https://news.ycombinator.com/item?id=26874436 https://news.ycombinator.com/item?id=26874436 - April 2021 (4 comments) I reverse engineered McDonalds’ internal API - https://news.ycombinator.com/item?id=24861623 https://news.ycombinator.com/item?id=24861623 - Oct 2020 (420 comments)
- Topgamer7 5y agoI'm curious about how you keep track of these, you just filtering titles with wired and Mc that hits the front page? You're always on the ball dang!
- dang 5y agoBasically yes - I used HN Search to look for relevant titles, but the last link (which is by far the biggest thread) I ran into because someone posted it in one of the other threads. Eventually I want to build software to support these 'related' lists so people can add links to them collaboratively.
- pandama 5y agoThis is a right to repair case and I hope McDonald's looses big time.
- deleted 5y ago[deleted]
- ska 5y agoRegardless of the technical or business merits of the device, there is a lesson in this for anyone building a product that effectively depends on the co-operation of a much bigger player. Doing this with their enthusiastic co-operation has to be the best path. Doing it in the face of an antagonistic relationship is really risky.
- tempestn 5y agoHuh, it's the physical world version of building a single product company on top of an unsupported API.