Restaurant reservation start-up changes model

ReservationHop

, a

San Francisco

start-up, which has faced increasing criticism over its concept of bidding for restaurant reservations has been defended by its founder,

Brian Mayer

, who claims the company has “decided to change our model” in response to online outcry.

Mayer’s company makes reservations at restaurants in San Francisco, then lists these reservations on its site, asking users to bid on the available seats. Reservations that go unclaimed are cancelled four hours in advance.

Since it was launched last week, criticism has come from media outlets with senior Wired writer Matt Honan describing the company as being "exactly what people hate about startups sucking the life out of San Francisco", as well as others calling ReservationHop "horrifying" and "messed up".

Mayer told The Irish Times the stinging comments about his idea have "absolutely" affected the businesses already. However, far from being negative, Mayer said, "thanks to the honest feedback we have received from the restaurant industry and the tech community, we have decided to change our model to share revenue with the restaurants".

Partnership deal

Hoping to convince restaurants to partner with the site, he explains ReservationHop will now start “paying [restaurants] to fill their tables, not charging them a commission on reservations”. The company’s site is now claiming “Customers who have put money down ahead of time are far less likely to miss a reservation, costing the restaurant unnecessary losses.”

Chief executive of the Restaurants Association of Ireland Adrian Cummins sees some merit in Mayer's idea, noting that it would be "ideal for Christmas bookings as this is the peak time that no-shows happen".

Cummins added that, “Unfortunately about 20 per cent [of] bookings without deposits are no shows in Ireland”, leading to a “loss of revenue for restaurants”.

Ciaran Gilsenan, chief executive of Dublin and San Francisco-based start-up BuildingEye, compared the idea to "contentious" parking apps such as MoneyParking which allow users to charge for spaces they vacate, and which have recently caused plenty of ire in San Francisco as well.

Gilsenan said of ReservationHop’s business model, “My gut feeling myself is that this isn’t right.”

Evolving mode

l

Stewart Curry

(co-founder of Woopie – an Irish digital publication with offices in San Francisco) is a friend of Mayer’s and said that upon launch of ReservationHop last week “people seemed to assume this was their business model forever, and not an experiment to iterate on and test in the real world”. Curry said, “What I do like about it is that it’s really hard to get a table in somewhere like [local restaurant] Foreign Cinema, so if I can pay $10 and be sure to get one, I probably would.”

In a blog post this week (entitled: How I became the most hated person in San Francisco, for a day), Mayer noted there are other sites operating a similar model in New York such as Killerrezzy. com where – should you be in the Hamptons this Saturday – you can snap up a $25 "deal" for a four-person table at The Palm restaurant among others.

Asked if ReservationHop plans on expanding to other cities despite the criticism, Mayer said, “Yes, shortly. Stay tuned.”