When California passed AB 1228 earlier this year, mandating a $20 minimum wage for fast-food workers, the industry braced for the impact. There were fears of mass layoffs, reduced hours and significant price increases to offset labor costs. Four months after this significant shift for the industry, a different picture is emerging. Restaurants have refocused, adapted and remain focused on delivering what they can control: a rewarding experience for guests and team members alike, and one that increasingly relies on technology to drive better business results.

In many ways, the legislation has accelerated what innovative restaurant brands already knew was coming. The fast-food industry has long been primed for a digital transformation, and the new wage requirements only accelerate that technological shift. Change, while scary, is necessary to grow.

There have been many dire headlines claiming that robots will take jobs away. Despite these concerns, that is not the case for the hospitality industry. The industry continues to thrive on people serving people. At Bite, an innovative kiosk provider for the industry, our guiding light is and will always be to improve hospitality everywhere, and technology will not jeopardize that, no matter what app or burger-frying machine comes out next. But what digitization can do, and do well, is improve hospitality.

Contrary to initial fears, many restaurants are finding that by adopting self-service technologies such as smart kiosk solutions, they can retain their workforce rather than cut it. This is partly due to the strategic reallocation of labor. The role of cashiers is not limited to taking orders. Typically, their job involves taking orders, bagging food, cleaning, answering questions, and other miscellaneous tasks at the counter.

By implementing self-service technology, kiosks can take over routine order taking, allowing staff to better focus their time on manual, hands-on tasks that improve food quality and cleanliness and, ultimately, the guest experience. Additionally, the efficiency gains from kiosks are significant. With 99% order accuracy, they reduce wait times and improve guest satisfaction, allowing restaurants with razor-thin margins to serve more customers faster.

The other important aspect that technology can provide is value creation. The most important labor metric for restaurants is not total labor time, but their revenue per labor hour, and smart kiosk solutions are proven revenue boosters. On average, bill amounts through kiosks are 20% higher than traditional cashier transactions. This increase is not due to price increases, but rather to customers feeling more comfortable exploring menu options, customizing orders, and responding to tailored upselling suggestions powered by artificial intelligence. As revenue per labor hour increases, increasing minimum wages have less of a material impact on the bottom line.

These results—improved efficiency for guests and team members, revenue growth, and improved hospitality—aren’t the result of fewer workers or price increases. They’re the result of leveraging smart technology to adapt to inevitable industry changes. And the industry has plenty of experience with this approach, from the success of online ordering for QSRs to tablets in casual restaurants that allow guests to pay their bill and leave when they want. These self-service solutions create a more efficient, customer-centric restaurant ecosystem that’s well prepared to adapt to changing times.

While other states are considering similar legislation, California is an important use case for the future. The key takeaway is that with the right technology investments, wage increases don’t necessarily have to lead to job losses or significant price increases. Instead, they can spark change that benefits employees, customers, and companies alike. This change is not only changing California’s fast food landscape, but could also create a blueprint for the industry across the country.

AUTHOR BIO

Brandon Barton is the CEO of Bite, a leading provider of smart kiosk solutions for the hospitality industry. Brandon is a hospitality technology entrepreneur who has leveraged his operational experience at leading hospitality groups such as Union Square Hospitality Group and Patina to develop and scale early-stage technology products such as Resy and Avero that help restaurateurs increase their profits. At Bite, Brandon leads the company’s incredible growth, serving leading QSR brands such as Bluestone Lane, FAT Brands, California Fish Grill, and Chopt.