In a restaurant industry that spends 36% of its money on labor and the minimum wage is rising to $16, she is trying to stay afloat and has found a clever way to save: helping cashiers via video calls to Filipinos and paying them big fewer.
At Sansan Chicken, a fried chicken joint in the East Village and Long Island City, cashiers greet customers on a large screen and answer questions about the menu or the self-service kiosk. They take UberEats orders over the phone to ease the burden on the handful of in-person employees at each location. And they only get paid about a handful of dollars an hour for their efforts.
The staffing company behind this technology is Happy Cashier, a New York-based company that is testing its product on a handful of local businesses. Led by founder and partner Chi Zhang, the company aims to “empower small businesses by providing exceptional virtual checkout services and operational support,” Zhang said Assets.
Zhang’s company draws most of its workforce from a massive pool of 1.3 million Filipino workers employed in the country’s business process outsourcing (BPO) industry, which is the largest in the world and has revenue of $35,000 in 2023. generated $4 billion.
The company, which has been operating in Sansan Chicken since last October, is also in the pilot phase at Sansan Ramen and some Yaso Kitchen locations, as well as another local chain whose name Zhang did not disclose. Zhang, who actually previously owned a Yaso Kitchen business, identified worker productivity as a part of the business that could use optimization.
The impetus for the business came from Zhang’s own experience in retail. After opening a restaurant in downtown Brooklyn in 2015, he closed the establishment during the pandemic, in part because it was difficult to hire workers. In fact, Zhang’s story is a common one among restaurateurs: COVID-era fast-food labor shortages have led chains like Chipotle and Sweetgreen to turn to adopting automation in stores. But the use of technology can be more than just a rescue for struggling companies, Zhang argued.
Happy Cashiers speak “perfect English” and have helped relieve pressure on frontline staff – whose jobs have not been axed since the video calling service was launched – by taking calls from UberEats and answering customers’ questions while staff physically were on site. Preload orders. Happy Cashier’s help successfully “increased operational efficiency,” Zhang said.
Of course, this service means very little unless it helps the bottom line. Zhang was transparent about using outsourced labor to cut costs: “I just can’t help discussing this issue,” he said. “The costs are admittedly cheaper than in the USA”
Although he did not reveal Happy Cashier’s salary, Zhang said, “We pay 150% more than the average cashier job in the Philippines,” which is 56.69 Philippine pesos, or about $1 per hour, as a base wage, according to Indeed. Using Zhang’s approximation, Assets calculated that Happy Cashier employees would earn $2.50 per hour – 150% more than the converted average of $1. Happy Cashier didn’t answer AssetsPlease clarify the salary situation, but these wages are in addition to tips split between in-person and virtual employees. Each restaurant owner determines the exact tipping system.
“We discuss with the owners: ‘How should it be distributed?’ and ensure that a very appropriate amount is distributed evenly among working people based on the time and energy invested in the operation,” Zhang said.
In some cases, this means tips are split 60/40, with the majority of the money going to on-site employees. Zhang said the workers seemed to agree with the agreement.
“We have had no objections since this procedure came into effect,” he said.
The company’s practice of outsourcing labor may be part of a growing practice of using technology in the workplace, although not without controversy. Canadian fast-casual chain Freshii used a video calling system called Percy in 2022, paying its remote workers in Nicaragua $3.75 an hour, even though the minimum wage in Ontario is $16.55. Although a Toronto Star investigation into the company’s wages drew criticism and Freshii hired Percy in August 2023, it was not for legal reasons. She attributed the change to a change in ownership.
“It’s like any other type of outsourcing,” said employment lawyer Jonathan Pinkus Star. “If you send jobs to people in another country, your only obligation is to comply with that country’s labor standards. The fact that we have a virtual presence in Ontario doesn’t change that.”
Happy Cashier, a company that doesn’t have a website and isn’t even officially on the market yet, is already successful. Zhang said the company has a few dozen potential customers who heard about it through word of mouth. He plans to launch the service by the end of June.
“Like the name Happy Cashier, [my goal] is to bring satisfaction, trust and sustainable growth to my customers,” he said.
This story was originally published on Fortune.com