In restaurants, a budding war over customer data

The war over electronic restaurant reservations is about to begin as upstart CityEats takes on San Francisco's OpenTable.
Written by Andrew Nusca, Contributor

Restaurants are a lot smarter than they used to be.

Made a reservation at a restaurant lately? If you did it over the Internet, there's a good chance you used OpenTable, the pioneering service developed in San Francisco 14 years ago.

But now a rival, CityEats, threatens to break the near-monopoly, sparking a war over which system will manage online reservations the best.

It's an information technology story with a decidedly delicious premise.

Today, OpenTable dominates with more than 25,000 restaurants in six countries. But it's expensive, and if you speak to any owners, they're not exactly happy about the added cost to their otherwise low-margin business.

But, like credit cards, customer convenience dominates, and so OpenTable thrives. CityEats hopes to shift the balance of power a bit by leveraging its corporate ties -- it's "Powered by the Food Network" -- and offering the same type of customer feedback -- reviews, photos, and so forth -- found on Zagat, Yelp and other food-centric websites.

But the key attribute is a seamless experience.

The Philadelphia Inquirer's Jeff Gelles explains how it works:

OpenTable built its primary business by offering restaurants a deal: In return for a setup charge, a $199 monthly subscription fee, and a per-diner fee of $1 or 25 cents, depending on where the customer books, OpenTable provides software customized to a business. It maps its seating chart, factors in table-turn time, and helps a restaurant keep its house filled and customers happy. It even allows it to track customers’ birthdays, wine tastes, or food allergies.

Will CityEats succeed? It's hard to say. With lower prices, cloud-based mobile device access and a footing in Washington, D.C. and Philadelphia, the company is certainly making the right moves to break OpenTable's grip on restaurant customer data.

This post was originally published on Smartplanet.com

Editorial standards