AI Drive-Thru Ordering on the Rise Despite Challenges

Restaurants are increasingly looking to artificial intelligence (AI) to manage drive-thru orders and cut labor costs, but widespread adoption of the technology may still be years away. A survey by the National Restaurant Association reveals that 16% of restaurant operators plan to invest in AI, including voice recognition, this year. Major chains, with their larger budgets and capacity for scale, are leading the charge.

Generative AI, fueled by innovations like ChatGPT, is generating buzz in the restaurant industry, which historically has been slow to adopt new technologies. However, a recent setback occurred when McDonald’s ended its trial of Automated Order Taker technology, developed in partnership with IBM, signaling potential challenges ahead. Despite this, experts predict an increase in AI adoption in the coming months and years.

The Future of Voice Ordering

According to T.D. Cowen analyst Andrew Charles, the tipping point for voice ordering technology could be 12 to 18 months away. He anticipates that at least two of the top 25 restaurant chains will expand their trials significantly during this period. He likens this potential shift to the rapid adoption of third-party delivery services following McDonald’s partnership with Uber.

Pros and Cons of AI Ordering

Voice-ordering technology companies claim their AI systems do not replace jobs but rather reallocate workers to other tasks, enhancing operational efficiency. SoundHound, a leader in the field, asserts that its AI can handle over 90% of orders without human intervention, compared to an 80-85% accuracy rate for humans. Additionally, AI can accelerate drive-thru service by approximately 10% and consistently upsell to customers, increasing the average check size.

AI ordering systems could also cater to non-English speakers, offering significant growth opportunities domestically and internationally.

However, there are notable drawbacks. Inaccurate AI orders can cause delays and customer frustration, potentially harming restaurant reputations, as noted by Bank of America Securities analyst Sara Senatore. Furthermore, while younger customers may appreciate the efficiency and reduced human interaction, older generations, particularly baby boomers, often prefer fewer technological options in dining.

Technological Challenges

The technology is not without flaws. Restaurants with poor Wi-Fi need to upgrade their connections, and those near noisy highways may face additional challenges as voice-ordering technology struggles to understand customers. Complex menus can also exacerbate AI difficulties.

Given these issues, some experts, like former Panera Bread CEO Ron Shaich, suggest that restaurants should focus on enhancing the overall customer experience and wait for AI technology to mature.

In summary, while AI drive-thru ordering presents exciting possibilities for the restaurant industry, significant hurdles remain. It may take several years to fully address these challenges and realize the technology’s potential benefits.