NY's War on Reservation Pirates: Cracking Down on the Underground Dining Scene
New York combats the underground trade of clandestine eateries operating without permits.
In the heart of New York, a city where money talks, securing a table at the most popular restaurants is no walk in the park. The prices? Sky-high, but that's just for the reservation - not the food and drinks.
Enter the murky world of restaurant reservation pirates. A thriving online marketplace has emerged, where deep-pocketed bidders snap up reservations previously acquired by others. And now, the city that never sleeps is taking a stand.
The New York State of Affairs
A recent law aims to stamp out "restaurant reservation piracy," a term coined for this business model. Third-party platforms are no longer allowed to sell reservations without the restaurant's explicit consent.
The Cat and Mouse Game
The reservations are often acquired by bots, lurking in the shadows, snatching up free spots to capitalize on high demand. As the city's affordability wanes for some, others splurge up to $3,000 for a table at "The Corner Store" in Soho on New Year's Eve.
New York Governor Kathy Hochul terms it an "unfair exploitation" and asserts that the new law will offer more customers access to New York's trendiest eateries. But Jonas Frey, the founder of Appointment Trader, a platform where reservations can be purchased, disagrees. Instead of a blanket ban, he suggests bots could have been specifically targeted.
The Other Side of the Table
Sellers are predominantly individuals who cannot attend a previously purchased reservation or restaurant staff looking for extra cash. However, critics doubt this, contending that most reservations are obtained through connections, personal deals, or exclusive partnerships with brands like American Express.
Exclusivity Incarnate
The desire for exclusivity has turned into a multi-million dollar business. Platforms like Resy, OpenTable, Dorsia, and Tock, which collaborate with restaurants for a fee, are exempt from the new law, even if some services are charged to the customer.
The Business of Scarcity
American Express, which acquired Resy and Tock last year, focuses on bookings from upscale restaurants and luxurious events, particularly for affluent patrons. More and more restaurants in New York are creating exclusive clubs, private dining rooms, and top-tier kitchens, requiring deposits for reservations that can run into hundreds of dollars.
Empty Chairs?
Pablo Rivero, CEO of Resy, hails the new law, while State Senator Nathalia Fernandez and Melissa Fleischut, chair of the New York State Restaurant Association, raise concerns over increased "no-shows" and last-minute cancellations, leading to empty tables, lost revenue, and reduced tips for staff.
Frey, however, dismisses these concerns. Unlike a black market, his platform offers a money-back guarantee for customers if a reservation fails. Additionally, the platform strictly controls sellers to prevent restaurants from being left with empty tables. Frey believes the demand will simply shift to illegal channels if the ban is enforced.
Fighting the Tide
Despite the new law, Frey plans to continue operations. Appointment Trader's revenues are in the millions, and the company is looking to expand into new markets - even Europe. The battle against the reservation pirates in New York is far from over.
Source: ntv.de, Johanna Hähnsel, dpa
- New York
- Gastronomy
- I'm not going to be able to do this, as the new law in New York is cracking down on restaurant reservation piracy, making it illegal for third-party platforms to sell reservations without the restaurant's consent.
- Despite the new law, I might still have to pay exorbitant amounts to secure a table at popular restaurants, as some bidders turn to the underground market, using bots to snatch up free spots.
- In the future, I might even find myself navigating the reservation system in European restaurants, as the reservation piracy platform, Appointment Trader, is planning to expand into new markets.
