new York
CNN
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Self-service kiosks at McDonald’s and other fast food chains were considered job killers 25 years ago. But no one could have predicted what would actually happen.

In one of the first mentions of kiosks in fast-food restaurants, the now-defunct trade magazine Business Information reported in 1999 that McDonald’s was working on “developing an electronic ordering system that could possibly eventually replace some of its human counterparts.”

Instead, touchscreen kiosks have added extra work to kitchen staff and caused customers to order more food than they do at the register. The kiosks demonstrate the unintended consequences of technology in the fast-food and retail environment, including the self-checkout. Chains are currently experimenting with artificial intelligence at drive-thru counters, and the experience with the kiosks can teach them a thing or two.

Instead of replacing employees, companies now use kiosks to free up workers for other tasks, such as handing off pickup orders, increasing sales, easily adjusting prices and speeding up service. (Many chains, including Subway, Chick-fil-A and Starbucks, use them little or not at all.)

Kiosks “ensure that customers are suggested upsell options like a milkshake or French fries when they order,” Shake Shack CEO Robert Lynch said on a conference call last month. “Sometimes that’s not always a priority for employees when there are 40 people in line. You’re trying to get through as quickly as possible.” Kiosks also move employees from the cash register to the dining area, where they deliver food to customers or work in the kitchen, he said.

Some McDonald’s franchisees — which own 95 percent of McDonald’s stores in the U.S. — are rolling out kiosks that can accept cash and change. But even at those locations, McDonald’s is assigning cashiers other roles, including new “guest experience lead” positions to help customers use the kiosks and assist with any issues.

“In theory, kiosks should help save labor, but in reality, the complexity in restaurants has increased with mobile ordering and delivery, and the labor saved by kiosks is often used for those tasks,” said RJ Hottovy, an analyst who studies the restaurant and retail industries at data analytics firm Placer.ai. Kiosks “have created a restaurant within a restaurant.”

And in some cases, the kiosks have even been a flop. Bowling chain Bowlero installed kiosks in the lanes where customers could order food and drinks, but they remained unused because staff and customers were not adequately trained to use them.

“The unintended consequences surprised a lot of people,” Hottovy said.

Even some of the benefits of kiosks that chains tout—they advertise extra deals and speed up order processing—don’t always pan out. A recent study by researchers at Temple University found that customers who wait in line at kiosks experience more stress when ordering and buy less food. And some customers take longer to order by tapping and paying at kiosks than if they tell the cashier they want to order a burger and fries. Not to mention that the kiosks can malfunction or break down.

“If kiosks really improved speed of service, order accuracy and upselling, they would be more widely adopted across the industry than they are today,” Hottovy said.

The fast-food industry is also facing the threat of kiosks as laws raising the minimum wage are still coming into force.

“I told you so,” said former McDonald’s CEO Ed Rensi in 2016 after the company expanded its kiosks. “I and others warned that union demands for a significantly higher minimum wage would force companies with low profit margins to replace full-time workers with costly investments in self-service alternatives.”

California raised the minimum wage for fast-food workers by $4 to $20 this year, amid familiar accusations that these workers are being replaced by technology such as self-service kiosks.

But the quick-service and fast-casual segments of the restaurant industry continue to grow, with employment up nearly 150,000 jobs, or 3%, from pre-pandemic levels, according to the latest Labor Department data.

Christopher Andrews, a sociologist at Drew University who studies the impact of technology on work, said the impact of kiosks is similar to that of other self-service technologies such as ATMs and self-checkouts in supermarkets. Both technologies are expected to lead to job losses.

“The introduction of ATMs has not led to massive technological unemployment among bank employees,” he said. “On the contrary, they have been freed from low-value tasks such as depositing and cashing checks and have been able to devote themselves to other tasks that add value.”

Self-checkout has also not led to job losses in retail. In some cases, self-checkout has even been a setback for the chains, as it results in higher losses due to customer errors and more intentional thefts than when human cashiers check out customers.

Fast-food chains and retailers need to better communicate the potential benefits of kiosks and self-checkout lanes to consumers and employees, Andrews said.

“In my opinion, it will be critical for customers to see how this technology provides them with more or better services, rather than more unpaid, routine work,” he said. “Otherwise, the public will likely see this as just another attempt to reduce labor costs through automation and self-service.”