McDonald's, restaurants, SoundHound menu tech, ordering system

McDonald’s is ending – at least temporarily – its experiment using AI technology to take and fulfill drive-thru orders.

The fast-food king alerted franchisees that it’s shutting down the AI experiment being run with IBM in more than 100 restaurants by July 26, trade publication Restaurant Business reported.

The decision on the program comes after a series of embarrassing and widely documented gaffes by the AI systems involving confused orders, from hundreds of dollars of chicken nuggets being added to an order and butter being confused with caramel ice cream, to one order in which bacon was added to a customer’s ice cream.

Mason Smoot, chief restaurant officer for McDonald’s USA, said in an email to franchisees obtained by Restaurant Business that “while there have been successes to date, we feel there is an opportunity to explore voice ordering solutions more broadly.”

Smoot appears to be implying that the company – which had more than 41,800 restaurants around the world last year, with plans to grow that to 50,000 by 2027 – may be prepared to look for other vendors to partner with.

IBM Will Go On

In a statement to news organizations, McDonald’s said the test program, launched in 2021, was to determine if an automated voice-ordering technology could both improve the user experience and simplify operations for workers.

“Through our partnership with IBM, we have captured many learnings and feel there is an opportunity to explore voice ordering solutions more broadly,” the company said. “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 offers companies like McDonald’s its watsonx Orders AI-based voice tool designed to take orders from drive-thru customers. Big Blue reportedly is working with other fast-food chains, including Wendy’s, Hardee’s and Dunkin’, in implementing generative AI technology for drive-thru orders. When announcing the agreement with McDonald’s, IBM said it was also buying McD Tech Labs, which itself was created by the restaurant chain after it acquired voice-based tech company Apprente in 2019.

The IT vendor in a statement to Restaurant Business said the “technology is proven to have some of the most comprehensive capabilities in the industry, fast and accurate in some of the most demanding conditions.”

IBM added that “while McDonald’s is reevaluating and refining its plans for AOT [automated order taking], we look forward to continuing to work with them on a variety of other projects.”

Fast Food and AI

Fast- and casual-food companies continue to look to AI tools to help them improve the customer experience, ease labor shortages or – conversely – reduce labor costs, or upsell offerings, and that includes automating the drive-thru and food ordering experience. Vendors in this space include Presto Automation, Kea, ConverseNow and SoundHound.

SoundHound in October 2023 bought SYNQ3 Restaurant Solutions that provided voice AI and other technologies to the restaurant industry and in January announced that Jersey Mike’s Subs would use its voice AI products in the systems that customers use to place orders. In a survey released last fall, SoundHound said that 77% of respondents said they expect that most food ordering in the next few years will be handled by AI voice assistants.

Presto, which is shifting its business from table-top tablets for ordering to AI systems, has battled financial problems over the past year – company executives last week said they are asking shareholders to approve a stock split in hopes of avoiding being delisted from the Nasdaq stock exchange – but earlier this month was still able to sign Taco John’s, which has almost 400 franchises in 23 states.

Taco John’s will test Presto’s Voice AI technology for ordering at some of its 400 restaurant sites for drive-thru ordering.