Trying to stay afloat in a restaurant industry that spends 36% of its money on labor and with a minimum wage hovering around $16, a group of local chains in New York City have found a savvy way to save money: ask the help of cashiers who video call from the Philippines and paying them much less.
At Sansan Chicken, a fried chicken restaurant in the East Village and Long Island City, cashiers on a large screen greet customers and answer questions they might have about the menu or their self-service kiosk. They take UberEats orders by phone to relieve pressure on each location’s few in-person employees. And they get paid just a handful of dollars every hour for their efforts.
The staffing firm behind this technology is Happy Cashier, a New York-based company that is testing its product on a handful of local businesses. The company, led by founder and partner Chi Zhang, wants to “empower small businesses by providing exceptional virtual cash services, as well as operational assistance,” Zhang said Fortune.
Zhang’s company draws most of its labor from a huge well of 1.3 million Filipino workers employed through the country’s Business Process Outsourcing (BPO) sector, which is the largest in the world and has generated 35 million in revenue. .4 billion dollars in 2023.
The business, which has operated at Sansan Chicken since last October, is also in the pilot stages at Sansan Ramen and a couple of Yaso Kitchen locations, as well as another local chain whose name Zhang did not reveal. Zhang, who actually owned a Yaso Kitchen business, identified worker productivity as one part of the business that could use a tune-up.
The impetus for the business came from Zhang’s retail experience. After opening a restaurant in downtown Brooklyn in 2015, she ended up closing the place during the pandemic, in part due to difficulty hiring workers. Indeed, Zhang’s story is a common one for restaurateurs: COVID-era fast food labor shortages are what pushed chains like Chipotle and Sweetgreen to turn to implementing automation in stores. But the use of technology can be more than just a saving grace for struggling businesses, Zhang argued.
The happy cashiers speak “perfect English” and have helped reduce pressure on in-person workers, whose jobs have not been eliminated by the introduction of the video calling service, by answering UberEats calls and answering customer questions while employees were physically in the store preparing orders. Happy Cashier’s help managed to “increase operational efficiency,” Zhang said.
Of course, this service means little unless it helps the bottom line. Zhang was transparent about using outsourced labor to reduce costs: “I simply cannot avoid discussing this topic,” he said. “The cost is certainly cheaper than in the United States”
Although he did not disclose Happy Cashier’s salary, Zhang said, “We pay 150% more than the average cashier job in the Philippines,” which, according to Indeed, is 56.69 Philippine pesos, or about $1.000. ‘now as basic pay. Using Zhang’s approximation, Fortune calculated that Happy Cashier employees would earn $2.50 an hour, or 150% more than the converted average of $1. Happy Cashier didn’t respond FortuneRequest to clarify salary situation, but these salaries are in addition to tips which are split between in-person and virtual employees. Each restaurant owner determines the exact tipping system.
“We discuss with the owners: ‘How do you want it distributed?’ and make sure there is a fair amount distributed equally among the people working based on the time and energy invested in operations,” Zhang said.
In some cases, that means tips are split 60/40, with most of the money going to the in-person workers. Zhang said the workers appear to agree with the agreement.
“We haven’t had any objections since the process was put in place,” he said.
The company’s practice of outsourcing labor may be part of a growing practice of leveraging technology in the workplace, although not without controversy. Canadian fast-casual chain Freshii used a video calling system called Percy in 2022, paying its Nicaragua-based remote workers $3.75 an hour, even though Ontario’s minimum wage is $16.55. While a Toronto Star investigation into the company’s salaries drew criticism and Freshii terminated Percy in August 2023, it did not do so for legal reasons. He attributed the change to a change in ownership.
“It’s just like any other type of outsourcing,” said employment lawyer Jonathan Pinkus Star. “If you send jobs to people from a different country, you are only obliged to comply with the labor regulations of that country. Being virtually present in Ontario doesn’t change the situation.”
Happy Cashier, a company that doesn’t have a website and isn’t even officially on the market, is already finding success. Zhang said the company has a couple dozen potential customers who heard about him through word of mouth. He plans to introduce the service to the market by the end of June.
“Like the name Happy Cashier, [my goal] is to bring happiness, confidence and sustainable growth to my clients,” he said.