In this Weekly Wrap, we’re looking at Google AI generating menu specials that don’t exist, Uber partnering with Pipe to offer loans to small businesses, challenges for Denver restaurants, and more.
Uber Getting In on the Loan Game
The Headline: “Uber partners with fintech firm Pipe to offer capital to small businesses”
The Source: cnbc
What You Need to Know:
Pipe is teaming up with Uber Eats to add its embedded technology to the company’s restaurant manager app. Eligible restaurants will see pre-approved capital offers from Pipe that are customized based on the businesses’ revenue and cash flow.
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The capital process notably does not involve credit checks, FICO scores, personal guarantees or any of the standard procedures used by big banks, according to the fintech firm.
“The No. 1 pain point for small business is access to capital, and in the restaurant space, it’s even more acute,” Voiles said.
Pipe, which has a $2 billion valuation, uses artificial intelligence to determine capital amounts based on six months of anonymous credit card transaction history shared by Uber. Then, within the Uber Eats Manager app, restaurants can choose to share their data with Pipe, submit their application and move forward with the capital.
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Voiles said 98% of the Pipe applications are approved, and the money usually hits accounts within 24 hours. With those that have fewer barriers to access, he added, the company has seen businesses growing 12% month over month.
“It’s just a way to actually help the restaurant owner that may be an immigrant with no FICO score get access to capital for the very first time, open a second location and double their business,” Voiles said.
Pipe is also setting itself apart from term loans that have fixed monthly payments. Instead, Pipe’s capital for small businesses are flexible with the business’ revenue flow, Voiles said, so even if a restaurant’s revenue decreases, restaurant owners can take their time to pay it back.
Our Take:
No credit checks, FICO scores, or personal guarantees? What could go wrong? We will see how this plays out in the next year, but when it sounds too good to be true, it probably is.
This model is very similar to what Lightspeed and Toast already offer — capital tied to POS and payment processing. Repayments are taken directly from card transactions. To some, it feels predatory. To others, it’s a lifeline.
If your restaurant is already on shaky ground, this is just more debt — and it eats into your daily take-home until it’s gone. But if you’ve got steady cash flow, it can be a smart way to cover big capital expenses like a new oven or an expansion. In that case, the hit from giving up 9–15 percent of card sales (or whatever the repayment share ends up being) won’t break you.
The Headline: “‘We cannot honor AI specials’: Wentzville restaurant swamped with fake menu items”
The Source: Yahoo
What You Need to Know:
Stefanina’s in Wentzville has been in business for over 25 years—serving customers and becoming a staple in the community for its homemade dishes.
But the mom-and-pop business has recently come across a peculiar problem—something even full-time manager Eva Gannon wouldn’t have expected.
It involves Google AI displaying items on the menu, as well as specials that don’t exist. And it’s confusing employees as well as frustrating customers.
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This type of interaction would become frequent, Gannon says, as more customers would visit Stefanina’s, asking about nonexistent food specials displayed by Google AI.
“That’s the frustrating thing that we’re dealing with right now because customers are coming back, being like, ‘Why aren’t you honoring the specials that say that is offered by you?’ And we are not producing that information,” Gannon said. “And if we did, it was 10-20, maybe even 30 years ago, when the internet started being a thing.”
Our Take:
Of all things AI, I didn’t have this on my bingo card of issues.
This story raises an interesting predicament: AI hallucinations. In the simplest terms, an AI hallucination is when a large language model (LLM) — whether a generative chatbot or computer vision tool — creates outputs that are inaccurate, nonsensical, or simply nonexistent.
In this case, the restaurant found itself at the mercy of Google’s new AI search, which surfaced menu specials that were either decades old or never existed at all. As consumers, we’re conditioned to believe Google’s results are accurate. Now, with AI-generated answers taking the top spot in search, that assumption becomes less certain.
Over time these hallucinations may become less frequent. But, with this restaurant, it’s creating chaos. And while I’d like to think this is an isolated incident, chances are it isn’t. Operators would be wise to check their own Google AI listings, and if the results are wrong, flag them as “incorrect information.” Whether Google actually responds is another question.
Denver In Trouble
The Headline: “Denver’s restaurants are dying”
The Source: Slow Boring
What You Need to Know:
Perhaps no city better exemplifies the challenges facing the restaurant industry than Denver, where some of the highest prices in the country — for both operators and customers — are making it nearly impossible for businesses in the midsize city to stay open.
While intended to support workers, Denver’s high minimum wage, especially its low tip credit, has unintentionally undermined the financial viability of full-service, labor-intensive restaurants. As costs outpace revenue and margins evaporate, once-thriving independent establishments are closing in droves, eroding the city’s cultural fabric and economic diversity.
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The city’s low tip credit, which results in a high minimum wage for tipped workers, is a particular pain point.
Denver City Council unanimously passed a minimum wage increase in November 2019 — just four months before the pandemic hit — and it was fully implemented citywide by 2022. Today, the base minimum wage is $18.81 an hour and the tipped wage is $15.79 — increases of about 70 percent and 95 percent, respectively.1
The city allows a $3.02 per hour tip credit, meaning employers can count that amount toward the standard wage. If an employee’s total earnings fall short, employers are legally required to cover the difference. That credit, until recent legislation passed, had remained static.
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Denise Mickelsen of the Colorado Restaurant Association (C.R.A.) said most operators are just trying to survive 2025. Though restaurants across the U.S. face similar challenges, she believes Colorado is the hardest place to operate one.
C.R.A. and USA Today reported that Colorado had the highest menu-price inflation in the country in 2023. One operator told her costs are up 39 percent since last year, while menu prices only rose 15 percent. Customers are falling away.
Our Take:
I have several friends who own restaurants in Denver, and they all talk about how hard it is to do business there. The lack of a tip credit and high minimum wage are the main pressure points.
A Denver Post article earlier this year stated “active retail licenses for full-service restaurants last year were down 22% from 2021, according to numbers provided by the city’s Department of Excise and Licenses.”
Skeptics will say that the lack of tip credit works just fine in California and Nevada, why shouldn’t it work in Denver? Simple: the minimum wage is higher in Denver than California, Nevada, and even New York City. One major difference is that California, Nevada, and NYC are all tourist hubs, and yes, Denver gets tourists, but not like the other places. And let’s not forget the fact that restaurants in those places are also suffering due to the high price of labor among all the other issues (tariffs, tourism woes, etc.).
We need to rethink the system, and I don’t have an answer. I understand the issues with the tipping system, which is so ingrained in our culture and standards. But eliminating the tip credit, at least now, has seen less than optimal results. Take a look at D.C. Since the planned phase out of the tip credit, restaurants have been in a free fall, so much so that the city has amended the initial phase out.
The most important takeaway is from Troy Guard of TAG Restaurant Group:
“I want nothing to do with it anymore. I have more opportunities in Houston.”
This echoes what we hear daily from operators in high labor areas like NYC, Denver, Seattle and across California. Investment in these markets will stagnate, new restaurant openings will fall in number. Their capital is being focused in places like Florida and Texas. And this affects more than just restaurants. Construction, design, and marketing dollars will all slow down in these markets too.
Chicago is the next city to phase away the tip credit. We will see how it goes, though based on current precedent, I don’t foresee it being a smashing success.
When It Comes to Delivery, Little Things Matter
The Headline: “Want to improve your delivery business? Don't forget the sauce, and toss in a little extra”
The Source: Restaurant Business Online
What You Need to Know:
A new secret shopper study from researcher Intouch Insight found that delivery speed is the biggest determinant of customer satisfaction. Speed is closely linked to food temperature, which was also an important factor for satisfaction.
The study, which was conducted exclusively for Restaurant Business and sister publication Nation’s Restaurant News, analyzed more than 300 restaurant delivery transactions on both third-party and first-party apps.
Customers who said they were happy with the speed of their delivery rated their overall satisfaction 55 percentage points higher than those who were not, according to the study. And customers whose food arrived at the correct temperature were 42 percentage points more satisfied overall.
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Even something as small as extra sauce packets can go a long way with customers. “I was pleased to see my order came with six extra packets of sauce, four napkins, and two straws,” a customer wrote.
There is room for restaurants to do more of this: Just under 23% of orders featured a personal touch such as extra sauce or a note on the bag.
Of course, freebies like those can add up at a time when restaurants are watching their bottom lines closely. “But those little extras absolutely are recognized by customers,” Beckett said.
Overall, customer satisfaction was 4 points higher when their order was personalized compared to when it was not.
Our Take:
Third-party apps can be a pain in the ass. It’s not your employee delivering the food and you can’t control their speed, their attitude, their morals, or how they handle the bag you’ve neatly given to them.
But there are a few things you can control:
The speed at which the food is made.
The quality of the food you prepare.
The way the order is packaged, including the vessels you use.
The accuracy of the order.
That little something extra.
The first four are a given. You should be able to prep food in a reasonable amount of time and it better taste good. You should always check the ticket before you seal it. And the packaging — both the neatness and the quality of the containers — matters. Those are the basics, and most operators already think about them.
The last one, that little something extra, is what gets overlooked. Why bother, right? They aren’t dining in. But hospitality doesn’t end outside your four walls. Hospitality should shine through every aspect of your business and if delivery is a part of your business, you should be as thoughtful with your DoorDash customers as you are with your in-house guests. It doesn’t take much. Small touches, an extra sauce or a handwritten thank-you on the receipt, can set you apart from the pack.