Toast kills the controversial diner charge
Why and how we got here in the first place
Early Wednesday morning — at 5am PDT, approximately one hour before I walked out the door for vacation1 — a Toast representative emailed me a statement from chief executive Chris Comparato rolling back a controversial 99-cent consumer charge on online orders. Had the fee stuck, it would’ve represented a big change in the relationship between in-restaurant software and the true end user, a diner.
When Toast confirmed the fee, its stock popped as investors welcomed the increase in revenue that would come from adding nearly a full dollar to every restaurant transaction. After the rollback, the stock dropped; a manifestation of a business reality: The business has to make money to survive.
I feel like I’ve already spent too many words discussing this fee and similar ones that might’ve emerged. It was a fee, now it’s not, end of story. But there was some not-so-subtle subtext in Toast’s statement, which acknowledged the importance of a restaurant-guest relationship, with a transparent layer of tech working in between:
“In that same spirit of transparency we also must acknowledge that innovation requires investment. Like any business, as we add new capabilities to our existing product suite we will adjust pricing thoughtfully to help fund product investments and unlock innovation that delivers value to help you thrive,” Comparato said.
Why did Toast think this fee would fly? I don’t know the official answer, but I have a few guesses, backed by Expedite’s continued industry coverage2. Here’s how we got here: