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AI woes are coming for the food service industry, and social media can\u2019t help but celebrate.<\/p>\n
This week, both Starbucks and Pizza Hut made headlines for negative news about their internal applications of artificial intelligence. At Starbucks, an inventory tool got the chop after making frequent counting mistakes, while at Pizza Hut, a delivery tool drove a franchisee to file a lawsuit.<\/p>\n
Social media users are saying the two stories may point to a larger trend\u2014that for the first time in the AI era, more companies will pull away from AI than embrace it.<\/p>\n
On Monday, Starbucks told employees it was retiring an inventory-counting tool powered by AI after the technology led to inaccurate counts and mislabeled products.<\/p>\n
\u201cStarting today, Automated Counting will be retired,\u201d said an internal company newsletter verified by Reuters<\/a>. \u201cBeverage components and milk will now be counted the same way you count other inventory categories in your coffeehouse.\u201d<\/p>\n In a statement to Fast Company<\/em>, a spokesperson for Starbucks explained that the company\u2019s choice to axe its Automated Counting tool is in line with its larger AI strategy, which is based on trial and error. \u201cWe test ideas in our coffeehouses, listen closely to partner feedback, and make changes to deliver a better, more consistent experience.”<\/p>\n Starbucks\u2019s move to ditch one AI tool doesn\u2019t mean the company is forgoing the technology entirely. The company is still investing in internal AI applications, including an AI assistant for baristas called Green Dot Assist<\/a> and an AI-powered order-sequencing system called Smart Queue<\/a>. The brand is also experimenting with an integrated Starbucks app within ChatGPT.<\/p>\n Where Starbucks\u2019s choice to nix its AI tool came from the top down, the anti-AI sentiment at Pizza Hut started with a disgruntled franchisee.<\/p>\n In a lawsuit filed on May 6, franchisee Chaac Pizza Northeast, which operates more than 100 Pizza Hut locations, alleged that the company forced it to adopt an AI tool called Dragontail, which inadvertently pushed average wait times from under 30 minutes to over 45 minutes in more than half of all orders.<\/p>\n The complaint explained that the issue wasn\u2019t with Dragontail itself, but with the information the tool provided to DoorDash drivers. Dragontail is meant to optimize food delivery by giving delivery drivers real-time updates on order preparations and timing. But according to the lawsuit, its implementation in 2024 caused “cascading operational breakdowns and customer dissatisfaction,\u201d resulting in more than an estimated $100 million in lost business and enterprise value.<\/p>\n Reportedly, once DoorDash drivers could see the real-time status of multiple orders through Dragontail, they would wait inside restaurants until multiple orders were ready, meaning some orders were being held for up to 15 minutes after they were ready for delivery.<\/p>\n Because Chaac Pizza Northeast relies on DoorDash for all of its deliveries, the franchisee alleged that the forced change to its delivery model had a major impact on its sales. At its New York City locations, Chaac said its sales swung from positive 10.19% to negative 9.78% after implementing Dragontail.<\/p>\n “With the intention to improve efficiency and service to the customer, Dragontail did the exact opposite,” the lawsuit stated. “It caused significant delays and pummeled consumer satisfaction.”<\/p>\n Pizza Hut has not responded to Fast Company<\/em>\u2019s request for comment.<\/p>\n With the stories from Starbucks and Pizza Hut breaking in quick succession, social media users are drawing connections between the two food service chains\u2019 AI troubles.<\/p>\n \u201cOver the next 1-2 years we\u2019re going to start hearing more reports about companies pulling back from AI than adopting AI, and markets aren\u2019t ready,\u201d one X user theorized<\/a>.<\/p>\n \u201cThe AI bubble might burst quicker than I thought,\u201d echoed another<\/a>.<\/p>\n \u201cYou\u2019re going to be hearing a lot more about forced AI integration and what a disaster it is for businesses and consumers,\u201d a third user agreed<\/a>.<\/p>\n Other users pointed out that all of these problems could have been avoided if tasks hadn\u2019t incorporated AI in the first place. \u201cTo err is human,\u201d one person quipped<\/a>, \u201cbut to really screw things up, you need a computer.\u201d<\/p>\nPizza Hut\u2019s delivery system backfires<\/h2>\n
Social media sees a trend<\/h2>\n