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Pending San Francisco Minimum Wage Law May Force Technological Upgrades To City’s Restaurants

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Touchscreen restaurant ordering system

The view a restaurant customer would see ordering food from a touchscreen display. (KPIX)

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SAN FRANCISCO (KPIX 5) — Technology has often been credited with–or blamed for–allowing companies to use fewer workers in order to save money, and those changes may soon be coming again to more San Francisco restaurants.

The San Francisco Restaurant Association says diners in the city can expect to see fewer staffers in favor of more touch-screen devices to order and pay for food, should voters in November approve a measure to raise the minimum wage to $15 per hour.

The city’s current minimum wage is $10.74. Should the November ballot measure pass, the minimum wage would gradually increase to $15 by 2018.

With San Francisco’s mandatory health care and sick leave laws already biting into restaurant profit margins, restaurateurs say technology such as touch screens and other auto-order systems is one way to help offset the increased cost of business.

“Increasingly technology has allowed more innovation in that space where you can forgo some of the increased labor costs … by basically outsourcing,” said Gwyneth Borden , executive director of the Golden Gate Restaurant Association.

“You save on labor. Right now, we have rising labor costs. The minimum wage obviously will add to that,” said Borden. “In San Francisco, labor costs are north of 40% of overall costs. That’s much higher than the national average which is closer to around 30%.”

Some business owners say they can’t wait any longer to implement technology if they are to stay in business.

Steve Sarver, owner of San Francisco Soup Company, says his business has reached “the tipping point” where trying to cut expenses around the edges just doesn’t work any longer.

Sarver said he must take the more radical step of investing in technology to reduce labor costs. Where many of his stores now have two cashiers, in a couple of years they’ll only have one, with the other employee replaced by an auto-order/auto-checkout computer system.

However, while some restaurants claim the city’s regulations are forcing them to lose business, the booming economy is making it hard for some restaurants to fill their job openings because of the increased competition.

 

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