AI Drive-Thru Fails Big Time at McDonald’s After Order Errors: Is the Fast Food Industry Ready for AI?

The introduction of artificial intelligence (AI) in the fast-food industry symbolises a broader struggle between labour and machines.

This battle extends to the competition between the personalised touch of human service and the efficiency of machine service.

As AI systems take on more roles, we must ask: is this the dawn of machine dominance, or will humanity push back, emphasizing the irreplaceable value of human interaction?

McDonald's Abandons AI Drive-Thru Trial After Embarrassing Mishaps

In a recent development, McDonald's, the international fast-food titan, has decided to conclude its two-year pilot programme that integrated AI into its drive-thru ordering process.

IBM said in the statement:

“IBM developed automated order taker technologies with McDonald's to support the emerging use of voice-activated AI in restaurant drive-thrus. This technology is proven to have some of the most comprehensive capabilities in the industry, fast and accurate in some of the most demanding conditions.”

This initiative, powered by IBM's technology, was set to be gradually phased out by the end of the upcoming month.

Mason Smoot, chief restaurant officer for McDonald's USA, said:

“While there have been successes to date, we feel there is an opportunity to explore voice ordering solutions more broadly. After a thoughtful review, McDonald's has decided to end our current partnership with IBM on AOT and the technology will be shut off in all restaurants currently testing it no later than July 26, 2024."

McDonald's expressed in a statement:

"Through our partnership with IBM, we have captured many learnings and feel there is an opportunity to explore voice-ordering solutions more broadly. After thoughtful review, McDonald's has decided to end our current global partnership with IBM on AOT beyond this year. "

The trial, which commenced in October 2021, was designed to evaluate the potential of AI-driven automation in enhancing the efficiency of customer service.

The collaborative effort between McDonald's and IBM aimed to streamline operations and expedite the ordering process through voice-activated technology.

McDonald's added:

"The goal of the test was to determine if an automated voice ordering solution could simplify operations for crew and create a faster, improved experience for our fans."

The AI pilot, which was rolled out across over 100 locations, was touted as a significant advancement that could benefit both customers and restaurant staff.

However, the journey was not without its challenges.

Reports emerged of customers receiving incorrect orders like bacon on ice cream, with some instances becoming viral on social media platforms like TikTok.

These included orders with unexpected items or quantities far exceeding what was requested.

In February, a TikTok user named "Ren" shared a video testimonial recounting her experience with McDonald's AI drive-thru system.

Due to cross-talk from a neighbouring drive-thru station, the AI mistakenly added nine orders of sweet tea to her bill instead of the hash brown, sweet tea, and Coke she had requested.

Another TikTok user, Madilynn Cameron, shared a video in which she described her frustrating encounter with McDonald's AI drive-thru system.

As she attempted to order a vanilla ice cream without caramel, the machine erroneously added cream packets to her order.

In the clip from November 2022, Cameron expressed her confusion and exasperation:

"I just want a large water and a cup of ice cream. Where'd the butter come from?"

In January, Cailyn Sykora posted a TikTok video demonstrating the AI-powered drive-thru mistakenly adding over 20 McNuggets Meals to her order, totaling approximately $222.

The caption on her video read:

"The McDonald's robot is wild."

The technology faced difficulties in accurately interpreting various accents and dialects, which impacted the precision of the orders.

Despite McDonald's earlier optimism, the test phase will be discontinued without further expansion, as communicated in an email to franchisees.

BTIG analyst Peter Saleh noted that franchisees expressed dissatisfaction with the infrequent updates and the underwhelming demonstration at the company's global convention, where all observed orders were reportedly incorrect.

The accuracy of the AI system was said to hover in the low-to-mid 80% range, with high operating costs, and a broader test of the technology was not implemented.

Saleh noted of the IBM technology:

“Accuracy is the most important thing right now. It will have to be at least 95% accurate and will have to save [franchisees] money over having a person in the drive through, and the way it is designed now, does neither."

McDonalds to Ditch IBM for Google Potentially, While IBM Willing to Find Other Vendors

McDonald's, in its recent reflections on the trajectory of voice-activated AI, has hinted at a cautious optimism that suggests a continued interest in the technology, albeit with a potential shift in partnership.

Smoot has indicated that the company is poised to assess various options to make a well-informed decision on a future voice ordering solution by the end of the year.

He iterated:

“IBM has given us confidence that a voice ordering solution for drive-thru will be part of our restaurant’s future, and we want to sincerely thank IBM and the restaurant teams that have been part of this crucial test.”

Despite the cessation of the IBM pilot, McDonald's has underscored that IBM remains a valued partner, with plans to continue utilising their products across its global operations.

McDonald's expressed:

"IBM remains a trusted partner and we will still utilise many of their products across our global system."

The company added:

“As we move forward, our work with IBM has given us the confidence that a voice-ordering solution for drive-thru will be part of our restaurants' future. We see tremendous opportunity in advancing our restaurant technology and will continue to evaluate long-term, scalable solutions that will help us make an informed decision on a future voice ordering solution by the end of the year.”

IBM, for its part, has expressed openness to collaborating with other fast-food chains to implement similar technologies, signalling a proactive approach to the industry's evolving needs.

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The company said in a statement:

"While McDonald's is re-evaluating and refining its plans for AOT, we look forward to continuing to work with them on a variety of other projects.”

The companyy also added:

"IBM also is now in discussions and pilots with several Quick-Serve Restaurant clients who are interested in the AOT technology."

As McDonald's navigates the next steps in its AI journey, the spotlight has turned to Alphabet's Google.

Following the announcement of a new partnership with Google Cloud at McDonald's investor day in December, there has been a buzz of anticipation regarding the nature of this collaboration, although specifics have yet to be disclosed.

Alphabet CEO Sundar Pichai said in a statement at the time:

“We're excited to see how McDonald's will use our generative AI, cloud, and edge computing tools to improve their iconic dining experience for their employees and their customers all over the world."

Analysts, such as Peter Saleh from BTIG, have speculated about Google's significant presence at the McDonald's Worldwide Convention in Barcelona last April, fuelling rumours that Google might step in to fill the void left by IBM as the company's AI vendor of choice.

Major Fast Food Chains Go AI, But Need for Conversational & Not Scripted AI Highlighted

In an era where the global landscape is rapidly embracing an AI-centric paradigm, the food and beverage sector is at the forefront of adopting transformative technologies such as Conversational AI (CAI) and Generative AI (GAI) to redefine the future of culinary services.

A study by QSR indicates that consumers are primed for digital evolution, with over 20% of Gen Z and millennials expressing readiness to engage with AI for decision support during the ordering process.

Additionally, 30% favour a system that recognises their preferences for a personalised experience, and 36% anticipate the advent of automated technology that detects car arrivals and facilitates pre-ordering.

Fast-food chains are particularly keen on integrating generative AI into their operations.

Besides McDonald's, Checkers and Rally's, Hardee's, Carl's Jr., Krystal, Wendy's, Dunkin', and Taco John's are among those either testing or deploying this technology in their drive-thrus.

Wendy’s Chief Information Officer Matt Spessard had pointed out at that time:

“Automating the drive-thru so restaurant employees can focus on creating great customer experiences is a challenge [our] industry has tried to solve for years but has not done so successfully at-scale. With 75 to 80 percent of Wendy's fans choosing the drive-thru, delivering a seamless ordering experience using artificial intelligence (AI) in restaurants can be difficult due to complexities of menu options, special requests, and ambient noise.”

Del Taco and Checkers & Rally's have partnered with Presto to automate order-taking using Presto Voice, a generative AI solution.

Yum Brands, the parent company of Taco Bell and KFC, has announced an "AI-first mentality" in its fast-food establishments.

Domino's leverages AI for voice recognition in order-taking and employs machine learning to optimise delivery logistics.

Starbucks personalises customer recommendations through its app using AI, while KFC utilises facial recognition AI in select Chinese locations to predict orders.

The burgeoning interest in AI within the fast-food industry is driven by the potential to mitigate labour costs and address staffing shortages, with 58% of restaurant operators viewing AI as a solution to labour challenges, according to the 2023 State of the Restaurant Industry Report.

The passage of a new minimum wage law for fast-food workers in California has further accelerated the adoption of AI technologies for tasks such as order-taking.

However, the industry's enthusiasm for AI is tempered by concerns over order accuracy and the potential displacement of human workers.

Instances of automated drive-thru misunderstandings have raised questions about the technology's readiness.

A Pew Research study revealed that 32% of Americans are wary of AI in hiring and evaluation processes.

A Pew Research study conducted year prior found that approximately six in ten Americans believe AI will significantly impact the workforce.

When asked about the potential benefits and drawbacks of AI in workplaces over the next 20 years, a majority expressed concern that AI will harm workers more than it will help.

IBM researchers suggest that around 40% of the workforce may require retraining due to AI integration.

While some automated systems have been criticised for inaccuracies, others have been scrutinised for relying on outsourced human labor; Presto Automation Inc. disclosed that it employs workers in countries like the Philippines to intervene in customer interactions 70% of the time.

Machine Dominance vs. the Human Touch: AI in Fast Food

While AI for fast food drive-thrus holds promise for efficiency and cost reduction, recent challenges indicate it may not be the panacea initially envisioned.

The evident struggles between labour and machines underscore the complexities of integrating AI into service industries traditionally reliant on human interaction.

Moreover, the competition between the personalised service of human workers and the automated precision of AI highlights ongoing debates about the future balance of technological advancement and human touch in customer experiences.

This ongoing dynamic prompts us to question whether AI represents the dawn of machine dominance or a catalyst for human adaptation and innovation in the fast food industry.