\n
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/04\/GettyImages-2050137014-e1712857056495.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
Trying hard to stay afloat in a restaurant industry spending 36%<\/a> of its cash on labor and with minimum wage creeping to $16, a cadre of local New York City chains have found a shrewd way to save: enlisting the help of cashiers video calling in from the Philippines and paying them way less.<\/p>\n At Sansan Chicken<\/a>, a fried-chicken joint in the East Village and Long Island City, cashiers on a large screen greet customers and answer questions they may have about the menu or their self-service kiosk. They take UberEats orders over the phone to take the pressure off each location\u2019s handful of in-person employees. And for their efforts, they get paid about just a handful of dollars every hour.<\/p>\n 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 \u201cempower small businesses by providing exceptional virtual cashier services, as well as operational assistance,\u201d Zhang told Fortune<\/em>.<\/p>\n Zhang\u2019s company draws most of its labor from a massive well of 1.3 million Filipino workers<\/a> employed through the country\u2019s business process outsourcing (BPO) industry, which is the largest in the world and generated $35.4 billion<\/a> in revenue in 2023.\u00a0<\/p>\n The business, which has been operating in Sansan Chicken since last October, is also in its pilot stages at Sansan Ramen and a couple Yaso Kitchen locations, as well as in another local chain that Zhang did not disclose the name of. Zhang, who actually used to own a Yaso Kitchen operation, identified worker productivity as a part of business that could use a tune-up.<\/p>\n The impetus for the business came from Zhang\u2019s own retail experience. After opening a restaurant in downtown Brooklyn in 2015, he ended up closing the location during the pandemic in part because of how difficult it was to hire workers. Indeed, Zhang\u2019s story is a common one for restaurateurs: COVID-era fast-food labor shortages are what pushed chains like Chipotle<\/a> and Sweetgreen to turn toward implementing automation<\/a> in stores. But the use of technology can be more than just a saving grace for struggling businesses, Zhang argued.<\/p>\n Happy Cashiers speak \u201cperfect English\u201d and have helped take the pressure off in-person workers\u2014whose jobs have not been eliminated since the introduction of the video-calling service\u2014by picking up UberEats calls and answering customers\u2019 questions while employees physically in the store prepare orders. The help from Happy Cashier has successfully \u201cincreased operational efficiencies,\u201d Zhang said.<\/p>\n Of course, this service means very little unless it helps the bottom line. Zhang was transparent about using outsourced labor to cut down on costs: <\/em>\u201cI simply cannot avoid discussing this topic,\u201d he said. \u201cThe cost is admittedly cheaper than the U.S.\u201d<\/p>\n Though he didn\u2019t disclose Happy Cashier\u2019s wages, Zhang said, \u201cWe pay 150% more than the average cashier job in the Philippines,\u201d which, according to Indeed<\/a>, is 56.69 Philippine pesos, or about $1, per hour as base pay. Using Zhang\u2019s approximation, Fortune<\/em> calculated that Happy Cashier employees would make $2.50 hourly\u2014150% more than the $1 converted average. Happy Cashier did not respond to Fortune<\/em>\u2019s request to clarify the salary situation, but these wages are on top of tips that are split between in-person and virtual employees. Each restaurant owner determines the exact tipping system.<\/p>\n \u201cWe discuss with the owners, \u2018How do you want it distributed?\u2019 and make sure there\u2019s a very fair amount evenly distributed to the people working based on time and energy put into the operations,\u201d Zhang said.<\/p>\n In some cases, this means that tips are split 60\/40, with most of the cash going to in-person workers. Zhang said workers seem fine with the arrangement.<\/p>\n \u201cWe didn\u2019t have any objections since that process was enacted,\u201d he said.<\/p>\n The company\u2019s practice of outsourcing labor may be part of a growing practice of leveraging technology<\/a> in the workplace, though not one without controversy. Canadian fast-casual chain Freshii used a video-calling system called Percy in 2022, paying its remote workers based in Nicaragua $3.75 per hour, even though Ontario\u2019s minimum wage is $16.55. Though an investigation by the Toronto Star<\/a> on the company\u2019s wages drew criticism and Freshii discontinued Percy<\/a> in August 2023, it didn\u2019t do so for legal reasons. It attributed the change to a change in ownership.\u00a0<\/p>\n \u201cIt\u2019s just like any other kind of outsourcing,\u201d employment lawyer Jonathan Pinkus told the Star.<\/em> \u201cIf you\u2019re sending jobs to people in a different country, you\u2019re only obligated to comply with the labor standards of that country. Being virtually present in Ontario doesn\u2019t change that.\u201d<\/p>\n Happy Cashier, a business that has no website and isn\u2019t even officially on the market, is already seeing success. Zhang said the company has a couple dozen prospective customers who heard of him through word of mouth. He plans to introduce the service to the market by the end of June.<\/p>\n \u201cLike the name Happy Cashier, [my goal] is to bring my customer happiness, confidence, and sustainable growth,\u201d he said.<\/p>\n<\/div>\n\nSubscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up<\/a> for free.<\/div>\n