OpenTable, Dash, others get fast company in mobile check-pay industry

Just who will win the "check please" moment in the battle of restaurant-payment apps remains an open question, though dining industry experts agree:

When it comes to paying the tab, the days of the faux leather folder on a plastic tip tray are numbered.


Startups such as Dash, Reserve, Cover and TabbedOut, plus pioneer Open Table, let people pay their restaurant tabs on their phones through mobile apps — a growing phenomenon that some say will lead to the day when most people make restaurant payments on mobile devices.

"We're talking four or five years," Chicago restaurateur R.J. Melman said. "It'll move pretty quickly."

Customers and restaurants stand to gain in a variety of ways, from convenience to operational efficiency to collection and analysis of customer data, said Melman, whose Lettuce Entertain You Enterprises eateries include Hub 51, Paris Club Bistro and Bar, RPM Steak and R.J. Grunts. Melman is also an investor and member of the Tock board of directors.

Dining apps offer various services. New York-based Reserve, which recently rolled out at several locations in Chicago, offers booking and payment services, charging diners a $5 fee each time they use the service.

Chicago-based Tock, which grew out of local restaurant's Next and Alinea using a pre-paid "ticketing" model, charges restaurants a monthly subscription fee for reservation services, and it likely will soon add a check-pay option, said founder and CEO Nick Kokonas.

He's betting that systems like his — a mobile–optimized online platform built into restaurant systems — will do better than apps that charge customers.

"That seems like an awful lot of friction to me," he said of apps that contact restaurants to make reservations, then send messages back to users to confirm or reject the request.

Tock charges its 17 pilot restaurants a monthly subscription fee of $695. Any money customers pay, in the form of deposits to hold a reservation, are deducted from the cost of the meal, he said.

Tock and other companies seek a piece of an industry that, according to the Restaurant Marketing & Delivery Association, takes in more than $700 billion in sales each year.

"Restaurant companies are desperate to adopt this technology," said Aaron Allen, a Florida-based restaurant-industry consultant. "It (mobile apps for restaurants) is a multi-billion dollar opportunity that's up for grabs."

Big chains are ahead of the game, with many having their own custom apps or mobile platforms or both. Allen said half of all pizza orders are already made online. Change is coming more slowly to smaller chains and independent restaurants. But Allen said it's coming.

"It's kind of like back in the '70s, when credit cards started taking over," he said. "What these apps are giving you now is speed, convenience and basically frictionless transactions."

They also give restaurant owners data.

"These apps give you check-level analytics," Allen said, referring to data collected and stored from each customer's order. He likened using that data to a skilled concierge or waiter recognizing a regular customer and greeting them with a favorite drink or recommending a wine they might like based on past orders.


Yet Melman said an app can only go so far. A cool tablet or mobile app might sell a diner a pricier wine, for example, but that doesn't mean they will like it.

"Our business is about making people happy," he said. "Technology helps to a certain extent, but I don't think it will completely replace the ability to sell on the floor."

Jeremy Adkins, co-founder of 1871-based Dyner, an ordering/payment app that will start testing locally later this year, said the real change will come when mobile apps fully integrate with restaurant point-of-sale systems — the modern versions of the classic cash register. He said Dyner will do that.

Today's apps and online platforms communicate with the restaurant, where a server loads the order into the point-of-sale system. Adkins said Dyner will avoid the additional step.

"I love GrubHub, and restaurants love GrubHub," said Adkins, referring to the Chicago-based digital ordering and delivery platform. "But restaurants have to have someone specifically handling the GrubHub orders."

Allen said the industry will be watching for what Apple Pay and Google Wallet decide do in the space. Apple Pay is already partnering with OpenTable on a payment option.

Melman said no single platform is likely to disrupt the restaurant sector the way Uber did the taxi business. He said the restaurant industry is too big and diverse.

"Every restaurant is built a little bit differently," he said.

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