SAN FRANCISCO – Souvla, a Greek restaurant with a devoted clientele, serves spit-roasted meat two ways: in a photogenic sandwich or on a photogenic salad, available with a glass of Greek wine. The toppings are well thought out: pea shoots, yoghurt enriched with harissa, mizithra cheese.
The small menu is so appealing and the venue itself so charming that you almost forget, as a diner, that you have to do much of the catering work yourself. You explore your own table. You fetch and fill your own glass of water. And if you want another glass of wine, you go back to the counter.
The runners will bring your order to the table, but there are no servers to wait for you here, or at the other two San Francisco locations that Souvla has added — or, increasingly, at other popular restaurants. which have opened in the last two years: RT Rotisserie, which roasts cauliflower a few blocks away; Barzotto, a bistro serving hand-rolled pasta in the Mission district; and Media Noche, a Cuban sandwich with eye-catching custom tiles.
Inside these restaurants, it’s obvious that the forces that make this one of America’s most expensive cities are subtly altering the economics of everything. Commercial rents have increased. Labor costs have skyrocketed. And catering workers, many of whom are priced by housing costs, have moved out.
Restaurant owners who say they can no longer find or afford servers are wondering how to do without them. Thus, in this city of staggering wealth, you can eat like a gourmet, with real stemmed glasses and ceramic plates. But first, you’ll need to fetch your own silverware.
“Souvla was the start of this new onslaught of things that in every way feel like a full-service restaurant – nice decor; good wine list; healthy and tasty food. It’s much more chef and ingredient driven,” said Gwyneth Borden, executive director of the Golden Gate Restaurant Association. “But it’s ‘take a number and go to a table.’ ”
She regularly hears restorers considering the model, who want to create the Mexican Souvla, the Italian Souvla. (Souvla is apparently to Bay Area restaurants what Uber is to gig economy start-ups.)
Here, restaurateurs have taken a familiar pattern from taquerias and fast-casual cafeteria-style spots like Sweetgreen and Chipotle Mexican Grill, and pushed it further up the fine dining chain. Call it fast-good, they suggest, or good-casual. Or counter service “in a full-service environment” that includes $11 cocktails and $22 pan-roasted salmon.
These hybrid restaurants are spreading to other high-cost cities, and they match what analysts say is a growing demand for more flexible dining options. But here, the extreme economy quickly trivialized the model.
San Francisco’s tech wealth has fueled demand for restaurants — and some wealthy tech workers have decided they’d like to be partners in a restaurant, too, opening up more investment. But because these high-paying workers also spurred demand for scarce housing, the city struggled to keep the lowest-paid workers afloat.
On July 1, the minimum wage in San Francisco will reach $15 an hour, following incremental increases of $10.74 in 2014. The city is also requiring employers of at least 20 workers to pay health care costs at- beyond the mandates of the Affordable Care Act, in addition to paid sick leave and parental leave.
Despite these benefits, many workers say they cannot afford to live here or stay in the industry. And partly because of those perks, restaurateurs say they can’t afford the remaining workers. A dishwasher can now bring in $18 or $19 an hour. And due to California labor laws, even tipped workers like servers earn at least full minimum wage, unlike their peers in most other states.
Enrico Moretti, an economist at the University of California at Berkeley, estimates that when housing prices increase by 10%, the price of local services, including Restaurants, increases by about 6%. (The median home price in San Francisco has doubled since 2012.)
Hamburgers therefore become more expensive than houses. But even wealthy tech workers won’t pay much to eat one. “If we were to pay what we need to pay people to make a living in San Francisco, a $10 burger would be a $20 burger, and that wouldn’t make sense anymore,” said Anjan Mitra, owner two upscale Indian restaurants. restaurants in town, both named Dosa. “Something must give.”
If customers aren’t buying $20 burgers or $25 dosas, and the kitchen staff can’t be cut, that something is service. “And that’s what we did – we got rid of our servers,” Mitra said.
In December, he opened an over-the-counter version of Dosa in Oakland. The new restaurant serves cocktails spiced with cardamom and fenugreek. But there’s also a self-serve water station and a bus station for diners inclined to clear their own tables. (If not, an employee will do the work.)
Charles Bililies had worked in fine dining restaurants for years before opening the first Souvla in 2014. By then, restaurateurs were already worried about mandates from city employers and housing costs.
“We can sit here, and we can complain and whine and moan,” Mr Bililies said. “We can be very negative about it. Or we can kind of turn it around and see an opportunity.
At Souvla, there is no oversized menu board above the counter, no service line where your dishes are assembled before your eyes. Behind the counter is a shelf of wine glasses for the all-Greek wine list, touches that make the place plausible for a dinner party.
At the original Souvla, the counter sits just inside the front door, so a line invariably spills onto the sidewalk, a neat marketing trick that also means the restaurant wastes little space. rented on waiting customers.
The template and small menu are conducive to takeout, which generates more than half of this place’s revenue. The restaurant has only 40 seats, but now serves an average of more than 900 meals a day, far more than a full-service restaurant could manage in the same space.
For restaurateurs, counter service makes fine dining – or something like that – profitable. For economists, this makes sense. David Neumark, a professor at the University of California, Irvine who has studied minimum wage, recalled a trip to Norway where nearly every restaurant he and his wife visited relied on counter service.
“I said, ‘Well, duh,'” Mr. Neumark said. “It was so clear there.” Norway has one of the highest median salaries in the world. Some parts of this story are therefore not new. “Economic history is full of ways we’ve figured out how to do things with fewer workers, and ultimately that’s what makes us richer,” he said.
Innovations in agricultural machinery or microwave meals, for example, have allowed people to be more productive and better paid. But that’s not quite what’s happening here. Restaurants haven’t developed a way to serve meals with less labor. They got clients to do the work they had paid employees to do.
There’s something innovative about reprogramming diners to decouple fine dining from full service. But the fact that restaurants Homework to do so speaks to deep-seated fears here of what the Bay Area will look like if certain categories of workers cannot afford to live here.
“It’s really sad,” said Jennifer Sullivan, who worked as a waiter in the area for years. Twenty years ago, she moved from Chicago to Oakland, where she rented a $750 studio apartment and served as a waitress throughout college. She fears that story is not possible in the Bay Area now.
“I even had dystopian future visions of buses full of labor coming from the outskirts of these really wealthy areas,” she said.
A few blocks from the original Souvla, at famed modern French restaurant Jardinière, chef Traci Des Jardins said her labor costs, including taxes and healthcare, now eat up 43% of her budget.
When she opened La Jardinière in 1997, they were 27%. (Mr. Bililies said Souvla’s percentage is now in the mid-20s, even with paid leave and retirement benefits.)
Ms Des Jardins experimented with raising her prices, but she said customers simply spent the same amount in different ways, skipping a second glass of wine or ordering two starters instead of a main course.
At one of her other restaurants in town, she now serves lunch at the counter.
“I love doing what I do and we support a community of people here,” said Ms. Des Jardins. “But the economy is pretty rotten.”
Souvla, on the other hand, plans to expand beyond the Bay Area, starting with New York. Mr Bililies said he wanted to occupy “iconic streets in iconic neighborhoods in iconic cities”.
The strategy, in other words, is to go precisely where the economy is rotten.