Online Restaurant and Ride Booking: What’s It Worth?

June 18, 2014

in tra, Travel Opinion, Travel Tech

  • SumoMe

Usually stories about technology run on Tales Told From The Road on Fridays, such as how to use an app, how to use a Website, how to use a piece of gear, or how to use technology for travel.

Technology

(Kate Ter Haar Flickr Photo)

But today’s piece offers something different: Commentary and what restaurant booking service, Open Table, and car service, Uber, are worth both to consumers and those who buy and own those services.

So it’s “Opinion,” not a “Tech Review,” and our “Editorial Calendar” says it should appear today, a Wednesday.

I can tell you what OpenTable and Uber are worth to me. And from that, you can extrapolate what they are worth to you and others.

Table Snagging

It’s okay with me if restaurants don’t take reservations. And it’s not unusual for popular, hole-in-the-wall or slightly larger eateries not to do so.

Being able to walk into a restaurant without a reservation and have breakfast or lunch, as long as the time  spent waiting for a table isn’t too long, is a plus in my mind.

Restaurant Table

(Rota de Estrelas Flickr Photo)

But the odds that I will eat dinner in one of those restaurants are low, especially if I’m planning an evening out with friends in a few days or a couple of weeks, and want to reserve a table in advance to be assured that the restaurant will be ready to seat us when we arrive.

OpenTable

I like using OpenTable to make restaurant reservations. Its interface is fairly intuitive, and it costs me nothing (although the restaurant has to pay the service). Unlike when I’ve reserved a restaurant by phoning a restaurant, when I’ve showed up at a restaurant where I’ve made a reservation using OpenTable, I’ve never been told I wasn’t on the list of those with reservations.

If I use OpenTable on my Mac desktop to make a reservation, I’ll be able to pull up the confirmation using the OpenTable app on my iPhone and show it to the restaurant’s host. If I’m running late, the app can dial the restaurant’s phone number so I can let it know that I’m on my way.

image

And from within the OpenTable Website or app it’s easy to share the reservation information via e-mail with others in my party, and to download it to my computer and mobile device’s cloud-based calendar.

So if a restaurant doesn’t use the OpenTable service, it’s far less likely that I’ll dine there, even if the place has its own on-line reservation system.

So what’s OpenTable worth to me? Lots.

Priceline thought OpenTable was worth a whole lot. Last week it agreed to buy it for $2.6 billion.

But there may be forces (and apps) at work that could devalue that purchase price, or perhaps have the opposite effect and inflate it, ones that permit reservations to be bought and sold like stocks and commodities.

But what’s OpenTable worth to restaurants?

I suppose that depends on whether the restaurant can fill every table every night of the week without the help of OpenTable. Here’s one restaurant’s detailed analysis of restaurant finances, whether table reservations are a good or bad thing for a restaurant, Priceline’s acquisition of OpenTable, and how Yelp fits into the picture.

Taking Me for a Ride

I live in a suburban area just north across the Golden Gate Bridge from San Francisco. Except for commute runs into and out of San Francisco, bus service is fairly limited, and (as yet) there is no light (or “heavy”) rail transportation.

Bus

(Oran Viriyincy Flickr Photo)

So most of us who live there own one or more cars which we frequently use to get from place to place.

Sure, there are taxis, but we experience the same uncertainty and anxiety as those living (or staying as tourists) in other parts of the San Francisco Bay Area, including San Francisco itself: Call a cab, then twiddle your thumbs waiting for it to arrive (if it ever does).

If you are bunking in a big city hotel, you will probably find cabs lined up and waiting in front of it. But flagging down a cab on the street can be problematic, even in a city like San Francisco, and difficult, if not impossible, where I live.

“Mother Nature abhors a vacuum,” as the saying goes. Another adage is “Find a need and fill it.”

The lack of readily available taxis was the “vacuum” that car service, Uber, found and filled in a number of cities in the U.S. and around the world.

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How does it work? You use an app on your smartphone to “hail” a ride from a nearby “Uberized” vehicle.

You get a text notification that the car is on the way to pick you up, and again when it arrives at your location. In between you can see the car moving toward you on a map built into the app. (Click here to read my review of the Uber iPhone app.)

To whom will Uber appeal? Anyone in a hurry who can’t wait to be picked up by a conventional taxi or shuttle service, or take a bus. For example, business people headed to meetings are likely to find Uber worth the sometimes (but not always) premium price they’ll have to pay for a ride.

But what is Uber worth to the casual tourist?

I’ve only used Uber once. About a year ago, my wife and I walked from our downtown San Diego hotel to the city’s “Little Italy” district to have dinner. One of my hiking buddies had recently used Uber in San Francisco to ride from a restaurant back to his hotel, so I decided to do the same in order to check out Uber’s car service.

But during the rest of my stay in San Diego, I walked, or took cabs if I was foot-sore and one was parked at a nearby taxi rank.

I thought that I’d use Uber in Denver, where I stayed for three nights after dropping off the rental car that I’d used to reach other areas of Colorado. But once again, my own two feet or free buses were all I needed to get around downtown.

Uber recently expanded its car service into the county where I live. Its Website says “No Results” if I type in the name of my town. But if I enter “San Francisco,” then zoom in on the service area map, I find that Uber’s cars will come as close as a half mile from my house. Close, but not close enough for me to get a ride from Uber from home.

As The New York Times reported last week, increased use of car services such as Uber could reduce the number of cars on the road, particularly those being driven in cities.

So while Uber is likely to be highly valued by urban dwellers and big-city business travelers, and at least some leisure travelers, so far I haven’t had much use for it.

But what would you pay to own Uber as a business?

In another Uber-related story, The New York Times noted that Uber was recently valued at over $18 billion dollars. But as that article suggests, the real question is not what its selling price might be, but whether “the network effect” will allow it to fend off competitors, keep its customer base, and retain a high stock value.

Uber has faced competition from ride share services Lyft and Sidecar. Now a new app called “Hitch” could eat into Uber’s profits, at least in San Francisco.

And taxi companies and their drivers have been vociferous opponents of Uber and its ilk, especially as they demonstrated recently in Europe.

The Bottom Line

OpenTable will continue have significant value to me and to others if Priceline doesn’t make major changes to the service that degrades its utility, or shut it down if it discovers that OpenTable wasn’t worth the high premium paid to acquire it.

Uber is riding a tidal wave of support by those dissatisfied with the availability of traditional taxi services. But will that tide soon begin to ebb, washing Uber into a vortex that will suck its financial footing dry?

The only constant, especially in a world based heavily on technological innovation, is change.

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