Raj Suri, Presto Founder & CEO, joins Yahoo Finance to discuss the future of contactless dining, what chain restaurants are using the company's technology, how small restaurants can receive a Presto dining kit for free and more.
BRIAN SOZZI: Restaurants in the US are beginning to reopen. But the customer experience may look a whole lot different to some customers. Presto founder and CEO Rajat Shuri is here with the details. Rajat, good to see you this morning. Walk us through, how does your technology work?
RAJAT SURI: So Brian, and our technology powers self order and self pay for thousands of restaurants around the country already. And we have a couple of different solutions for restaurants trying to reopen their dining rooms in the pandemic. One is a fully-contactless, use-your-own--mobile-phone order-and-pay mechanism where a guest can go into a restaurant, scan a QR code with a camera on their phone. And they can place an order and pay right there on their phone without having to touch anything else or get too close to their staff member, who is probably going to be wearing a mask.
And we also have another solution which, is a tablet on the table which guests, can use to look through the menu, order items, modify as they want, and pay right there, as well. So we have two different solutions helping restaurants reopen their dining rooms in this pandemic.
- Yeah, Rajat, I've used some of them at Chili's. I know that you're at Applebee's, Denny's, a number of different large chains. I'm curious if those are deals you make with the corporate company? Or is it on a franchisee basis when you're putting in your technology in these restaurants?
RAJAT SURI: Yeah, good question. It varies depending on the restaurant chain. Some restaurants are heavily franchised. Applebee's is heavily franchised. And in that case, we would work with the franchisees much more closely. Chili's is not heavily franchised. They're owned by the parent company, Brinker. And we would be working very closely with Brinker, the parent company.
- I have a quick follow-up for
BRIAN SOZZI: You. Who is--
- Ooh, sorry, Brian. I have a quick follow up. You had mentioned-- I saw the animation of those screens that people can touch when they're in the restaurant to order. You talked about a mobile, device as well. But what about people who say, look, this is sort of a one off for me. I don't want to download the app. I'm going to use this tablet on the table. Are you concerned about engagement with the tablet in this COVID-19 world we're living in now?
RAJAT SURI: Yeah, so the tablet actually is disinfected before every visit and before every party sits down in front of the guest. And so the guest feels very comfortable that it's actually clean for them. You could think of the analogy, if you go to a Whole Foods or a grocery store, they actually disinfect the shopping cart right in front of you. So that's what they do with a tablet, as well.
And it's much easier to disinfect one tablet than to disinfect 10 pages of a menu or 20 pages of a menu. And it also reduces the need for transferring credit cards to your staff member. So the tablet is actually way safer than any other way of ordering and paying. And we have the mobile phone option, too, which you don't need to transfer anything. You can just use your phone to order and pay?
BRIAN SOZZI: Out of the ones you deal with, what chains, right now, are moving the most aggressive to your technology?
RAJAT SURI: I think there's a lot of change right now. We're working with the majority of the top-10 restaurant chains. You mentioned a lot of them, Applebee's, Chili's. We announced a deal with Denny's last year. And so we also have Red Lobster, Outback Steakhouse, and a few others in the pipe. But we have a full list of logos on our website.
- I'm curious what your technology means for waitstaff. Because waiters and waitresses have to engage much less with the customer when your technology is in play. And what is it also due to the amount of a tip that somebody might leave the waitstaff?
RAJAT SURI: Yeah, good question. Look, I mean, there's the pandemic world. And there's going to be the post-pandemic world, right? In the pandemic world, the staff members have to wear masks. And guests are not too eager to get too close to the staff members. Oftentimes, guests go out to eat in today's world, in the pandemic, to just socialize with their own family and friends, people who they're close to, and they know, probably, are safe, right?
So we're not seeing guests getting too eager to get close to a staff member right now. And so they would like to just order and pay by themselves without having to interact too much. Now, post pandemic, that will change as staff don't have to wear masks anymore. And still, in that case, the staff member actually appreciates the fact the kind of the routine work, the boring work of serving people, is taking off their hands. And guests can order and pay themselves. The staff members can provide hospitality.
How was your day today? How are your kids? Can I help you get another refill? That type of thing. And so the hospitality quotient actually goes up with these tools. And overall, staff members actually make more money in tips. So we've actually proven that overall tip percentage goes up by about 20% using our systems.
BRIAN SOZZI: Rajat, what are you doing to get your technology in the hands of the small independent restaurant companies? That company, that one person may only own one restaurant, has been hit hard by this. But I suspect it's technology like this that is now table stakes, or mission critical, to operating a restaurant post pandemic.
RAJAT SURI: Absolutely, absolutely, Brian. You hit the nail on the head. I mean, states now are mandating that independent operators are using this type of technology. And they need technology to show their menu. Digital menus are becoming a must now. And they need technology to process payments. Because transferring credit cards is just not feasible anymore. They need to be able to take contactless payment.
So we're providing our contactless dining kit absolutely free. It's on our website. A restaurant operator can go there right now, sign up, and be shipped our technology for free, which basically allows them to take orders and payments via QR codes on their tables. So as a service in the pandemic, Presto is offering our technology absolutely free to all restaurants around the country.
- Rajat, you're very well connected there in Silicon Valley. Also, outside of what you're doing now, you were a co-founder of Lyft. Just what are your thoughts as you see the civil unrest continue to unfold in our country, the cry for more diversity in Fortune 500 companies? And among those we see Silicon Valley companies. Do you feel that more needs to be done? And what are you doing, in particular there at Presto?
RAJAT SURI: Absolutely, a lot more needs to be done. I mean, I think this has been a problem, a challenge in our country for many, many years. We have marginalized communities, Latinos, African-Americans. And the unrest that we've seen over the last couple of weeks, I think, has been a long time coming. And there's a number of different things that, at Presto, we're considering right now in terms of donations we want to make, as well as changes in hiring practices.
But overall, we know we need to be doing better. Everybody in Silicon Valley needs to be doing better. Still, if you look at the boardrooms and the executive suites of companies around this area and around the country, they're still not as diverse as the country itself. And that needs to change. And I think that needs to begin at the grassroots level from Silicon Valley companies helping with schooling, and schooling practices, and making sure everyone has equal opportunities to get a proper education, all the way through hiring practices and making sure that their executive teams and boardrooms represent the diversity of the country.
BRIAN SOZZI: And Rajat, doesn't part of it also have to start with the VC community? You're no stranger to raising money. Why are these VC companies continuing to overlook or just not give the funds to companies that would qualify as diverse?
RAJAT SURI: It's a great question, Brian. I think part of the problem is the VC community doing something that-- or investing in founders that they're comfortable with, who maybe look and feel a certain way. And there's a also a big problem with founders being funded or highly over-represented as men. So I think that's a huge problem in the community, as well as race.
So I think those are both two big problems. But I think there's also a supply problem, where there are not enough people of color, of marginalized communities, escaping they're their own communities to get the opportunity to even pitch a VC and to be in the position to start a company. So there are systematic problems all across the board. And I am committed to doing whatever I can to help with the problem.
So I've been doing a lot of research in, recently, how can we help? But the problem starts at the very grassroots level. And it goes all the way up to hiring practices and funding practices, as you mentioned.
- Sorry, I want to get this question in. It goes back to the food industry, for a moment. I'm sure you saw the news this morning, it looks like Uber is not going to merge with Grubhub after all. Looks like Grubhub has entered an agreement with a European company called Just Eat. What does that do to your business or your business model at all Presto?
RAJAT SURI: I think that the Grubhub and Uber Eats, those guys are really focused on off-premise delivery. At Presto, we're more focused on on-premise, the order and payment experience on premise. I think that the delivery model has been highly challenged, as you probably can see from some of Grubhub's own announcements over the past year or so. And there's definitely consolidation that needs to happen in that space. Because the business model just doesn't work.
And it doesn't work for the delivery companies. And actually, it doesn't work for restaurants, as well. And so restaurants now, I think, the pandemic has really shifted their sentiment when it comes to these third-party delivery companies. Restaurants are realizing that these delivery companies are not there to help them. They need to collect their 30%, 40%. And if they're too reliant on third-party delivery, they're not going to survive.
So restaurants, now, are actively encouraging people to come on premise, either to do takeout or dine-in. And that's where Presto helps. So we've kind of seen the shakeout coming for a while. I mean, these companies are all powered through venture dollars, which basically, they've lit billions of dollars on fire to try to make hundreds of millions. And that's just not going to be sustainable long term.
And so we've seen this coming. And that's what we're really focused on dine-in and helping restaurants themselves versus trying to focus on these delivery products, which sound attractive, but really, are not profitable and never will be profitable.
BRIAN SOZZI: Yeah, I think it also goes to show that you and the team at Lyft got it right in the early days. Just focus on ride sharing and doing that really well. Presto founder and CEO Rajat Suri, always good to speak with you. And we'll speak to you soon.
RAJAT SURI: Absolutely. Thanks for your time.