Amidst a push from lawmakers and protestors alike to raise the federal minimum wage to $15, McDonald's executives are in the testing phase of new ways to cut costs in restaurants through automation.
At an investor conference Wednesday, McDonald’s CEO Chris Kempczinski announced a small group of the restaurant chain’s location in Chicago will be rolling out tests on automated voice drive-thrus.
"There is a big leap between going from 10 restaurants in Chicago to 14,000 restaurants across the U.S. with an infinite number of promo permutations, menu permutations, dialect permutations, weather — I mean, on and on and on and on," said Kempczinski.
When asked whether we’d see a nationwide rollout of the automation in five years, Kempczinski said "I do, but I don't think that this is going to be something that happens in the next year or so."
According to Kempczinski, the automated system is about 85 percent accurate at this time.
The automated system runs on McDonal’d 2019 acquisition of Apprente, a company specializing in voice-based conversational technology.
"There's still a lot of work, but I do feel confident that the acquisition that we did with Apprente, the work that we've done since then, we feel good about the technical feasibility of it and the business case," said Kempczinski.
The push for automation comes as lawmakers push for a $15 federal minimum wage.
Earlier this year, a proposition, sponsored by Senator Bernie Sanders, to add the minimum wage hike to the $1.9 trillion COVID relief bill was blocked when eight Democratic senators voted against the proposal.
Last month, McDonald’s employees across the country walked out of their restaurants in protest to voice their support of the raised minimum wage, in coordination with Fight for 15.
Former McDonald's CEO Ed Rensi told Fox Business that attempts to raise the minimum wage were only quickening the restaurant’s push towards automation.
"When you raise prices 1%, you lose about 1% of your transaction costs," Rensi said. "And you have to work really hard to recover that through promotion, marketing, you know, all kinds of local events and it’s not an easy thing to do, particularly when you're living on a very high number of transactions.
"You got a choice, you go broke by raising prices or you go broke by losing money because you can't raise prices," Rensi continued. "So I understand the need to perhaps make a public statement that you're going to $15 and I don't quarrel with that aspect of it. But when the rubber meets the road, you've got to look at what are the franchisees going to do because they're 80% to 90% of the system and a lot of them are already there."
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