I'm James Wallman — author, entrepreneur, futurist. Welcome to The Future Is Here. We provide sensible, robust, useful strategic advice to people like you.

Why are people paying for restaurant reservations?

The economist Tim Harford has written an articled called Paying to Get Inside the Restaurant, about Silicon Valley start-ups which are monetizing the till-now underexploited market for reservations.

  • Table8 works with restaurants in Miami, Washington, D.C., Los Angeles, Chicago, and San Francisco
    • They set aside tables specifically for Table8 to sell through its app
    • Table8 charges up to $25 for a table, splits the fee 50/50 with the restaurant
  • Resy is similar.
  • Killer Rezzy, which operates in New York, does this with and without restaurants' knowledge
  • Shout is a peer-to-peer version of these: it's for people to sell New York City restaurant reservations to one another.

Tim Harford says this sort of pay for reservations is a good idea, "because the status quo is wasteful".

Reservation apps and peak pricing will make us better off because richer customers get convenience, thriftier customers pay less.

There's a problem: the idea of fairness, especially around "surge pricing". See Uber's issues here.

Our forecast: people like apps, and people like convenience and systems that work smarter. In a world that likes "smart" this will catch on. Our suggestion (to restaurant owners and anyone who can charge for entry/access): 

  • do it
  • explain why it's better for all
  • don't let your excitement at the profit potential of surge pricing kill people's love for your brand. 

In other words, go gentle and play nicely out there. Forgo a little short-term gain for a lot of long term love.

Wood you want a tree that grows faster?

Happy people make better sandwiches—and profits