recent salary hike On McDonald’s Something could come with unintended consequences, former CEO Ed Rainsy warned in a recent interview. Fox Business. Rising labor costs are accelerating McDonald’s plans for an automated drive-thru, a technology that would put some employees out of work.
Rainsi’s remarks come just a week after current McDonald’s CEO Chris Kempczynski Spoke at an investor conference, confirming that the company was voice recognition technology At the drive-thru of ten Chicago locations. Kempczinski confirmed the strong initial performance from the new system, which is about 85% accurate in processing orders. Allowing for field calibration, he predicted the technology would be implemented series-wide within five years.
McDonald’s was unable to estimate how many of its employees would be affected by the technology, but Renci has no doubts about what the immediate impact will look like: “Quick-service restaurant workers …[are] going to lose jobs,” he said. “Technology is always cheaper than people.”
For Rainsy, the chain’s investment in automation is tied to recent developments in its pay scale. Saw the pressure of trade unions McDonald’s Committed to 10% pay increases for crew members and shift managers. Rainsi anticipates that the hike could benefit employees in the short term, but it will accelerate McDonald’s plans for automation.
As he sees it, wage increases will leave most of McDonald’s franchisees in a bind, scrambling to offset the increased cost of labor. traditional reforms such as menu price hike He believes this will not be possible for most franchises. Unwilling to sacrifice business for higher prices, franchisees will favor a cost reduction approach and are likely to opt for an automated drive-thru.
In his criticism of McDonald’s pay increases, Rainsy made an interesting appeal to small business owners. In his view, wide-scale implementation of automated drive-throughs would only further tilt the playing field in favor of “institutionalized bigwigs” over the interests of small businesses.
McDonald’s has had automation in the works since at least 2019, when it first acquired apprentice, the voice-recognition technology company behind its recent drive-thru upgrade. The rain may outweigh the impact McDonald’s has on its current push toward automation, but the underlying claim, that AI is ultimately cheaper than labor, seems right on the money.
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